Apr 12: IGT bolsters igaming with iSoftbet buyout
IGT agrees to by iSoftBet, Sportradar acquires VAIX, ICE day 1, Acroud trading update, YOLO invests in Enteractive +More
Good morning. On today’s agenda:
IGT has enhanced its online proposition with the buyout of iSoftBet.
Gaming-related AI provider Vaix has been bought by Sportradar.
Acroud issues a positive Q1 trading update showing QoQ EBITDA up by 175%.
Out-bloody-Rageous. Click below.
IGT agrees iSoftBet deal
Definitive agreement reached for €160m in cash deal.
For FY21 iSoftBet generated revenue of €30m and EBITDA of €8m.
iSoftBet has ~260 igaming customers.
Deal to be completed in Q2.
Soft machine: Announcing the deal, IGT noted it was buying a catalog of 125 games, more than doubling its proprietary content library to 225 games, while Deutsche Bank analysts noted the aggregation platform came with a further 4,600+ games.
IGT added that iSoftBet came with scalable promotional tools, data analytics and creative talent.
Slightly all the time: The multiple of 20x FY21 EBITDA shows how much IGT was willing to pay to further its ambitions in digital gaming.
Vince Sadusky, CEO, IGT: “This will enhance PlayDigital’s competitive capabilities with a proven, complementary content portfolio across Europe and North America.”
Hope for happiness: Deutsche Bank suggested IGT has enhanced its offer with a “stronger suite of customer experience-orientated titles”, an area where they suggest IGT was “lacking”.
Deutsche Bank said the transaction “serves to address (IGT’s) digital experience weakness”.
But they noted that icasino’s growth in the US is “tethered” to further icasino legislation, “something we are less than optimistic regarding”.
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Sportradar acquires Vaix
A personal service: Gaming-related AI-based customer insights provider Vaix has been snapped up by Sportradar for an undisclosed sum.
Vaix’s technology allows operators to gain a “personalized view’ of their customers enabling amore targeted, player-friendly experience.
Sportradar has been incorporating the Vaix technology within its Managed Trading Services (MTS) offering for over two years.
The company said the addition of Vaix would not have a material impact on the forecasts for 2022.
Backgrounder: Founded by ex-PartyGaming/ex-Bwin-ers John O’Malia and Andreas Hartman, Vaix was founded in 2016 and has to date fed over 60m transactions into its system.
Social reaction: On LinkedIn, John O’Malia appeared to indicate he would be leaving the business while Harman remained.
John O’Malia: “The team has built hugely impactful AI technology and transformed the fortunes of our customers while changing the way the entire gaming industry unlocks value from data.”
ICE day 1
If you come back to California, you should just hit me up: Speaking yesterday, executives from California's Agua Caliente Casinos and Mohegan Entertainment were bullish on the prospects of both online sports-betting and gaming.
Bobby Soper, International President at Mohegan Gaming & Entertainment, said "online is the future” and the tribe’s priority was to have a comprehensive omnichannel offering.
On the same panel, Saverio Scheri, COO of Agua Caliente Casinos, said:
"We’re very keen to get online sports-betting, California could be one of the biggest sports-betting markets in the world and we've created great venues (for retail betting) and online concepts. We're not sure where or how it will happen, but we want to be ready."
The Cooler King: Betsson CEO Pontus Lindwall gave his take on the Netherlands market and the cooling-off period.
“The cooling-off period notice was unpleasant and unexpected. We have some well-known brands, but we’ll have to start pretty much from scratch. It will be tough because other operators will have a huge head start.”
Grey matter: For Per Jaldung, chairman of the European Casino Association, there are no grey markets.
“Illegal operators exploit players with so-called EU-licensed operations from within the European Union. There is no such thing as an EU license; gambling is nationally regulated, the illegal market is pretty much out of control and there are no effective tools to prevent this smash-and-grab. This issue should be at the top of the agenda for regulators.”
Lockdown: Pointing out how lockdowns had had a huge impact on online verticals, Caesars Entertainment board member Jan Jones Blackhurst said:
“Governor Chris Christie thought it would be a $1bn market and it was (worth around) $100m until COVID. Now it’s going for $2bn and is driven by younger demographics who are not playing for the food and beverages or other amenities.”
Acroud Q1 trading update
Revenue is expected to amount to €6.9m, up 6% QoR and 24% YoY.
EBITDA forecast to rise 175% QoQ €2.2m post-asset disposal.
FY22 EBITDA is now expected to hit between €8m-€10m.
Driving profits: The gaming affiliate and affiliate network platform provider said the “solid outcome” for the quarter was driven by successfully executed cost synergies and the divestment of its consumer finance-facing assets.
The $575k disposal represented an LTM 5.2x EBITDA multiple.
Behind the numbers: Igaming affiliation generated revenue of €3m while the platform business was worth €3.9m. For the affiliate business, Europe provided 69% of revenue with 16% coming from North America and the rest of the world accounting for the remaining 15%.
Pay it back: Acroud has also initiated a refinancing process during the quarter on its €16..7m debt and has appointed advisors to secure the refinancing of a bond maturing in Sep22.
Yolo funds Enteractive
The deal details: CRM provider Enteractive has announced it has received an undisclosed “several” million euro sum from Yolo Investments in return for a “non-controlling” equity stake.
The Malta-based Enteractive has been in business since 2008 and provides player retention and reactivation services to companies such as Kindred, Betsson, Casumo and Hero Gaming.
What they say: Mikael Hansson, founder and CEO of Enteractive, said the new investment would help the company accelerate its growth including bringing with it a strong network” of industry contacts.
Tim Heath, founder at Yolo, said the area in which Enteractive works is a challenge for many of the companies Yolo is invested in.
“We see significant opportunities to build synergies and help Enteractive develop into a global industry leader across many more markets.”
OneComply funding
Driving the news: The Vancouver-based automated compliance business OneComply has announced a Seed funding round led by Warner Investments with participation from Katie Lever, Benjie Cherniak and Quentin Singleton. Financing terms were not disclosed.
Bill Warner, Warner investments: “With the growth of gaming and sports betting in the US attracting new participants as well as driving new partnerships and alliances, licensing and compliance takes on a whole new level of complexity and importance.”
New York casinos
Budget success: Over the weekend, Gov. Hochul reached an agreement on the state budget meaning that the licensing of up to three downstate casinos would now be fast-tracked.
What this means: Analysts at CBRE said the move created “the largest land-based gaming opportunity in years”.
The legislation sets a minimum license fee of $500m but gives the New York State Gaming Commission the option to accept higher bids.
The slot and table tax minimums are set at 25% and 10% but will be determined by a competitive bidding process similar to the recent mobile legislation.
CBRE: “Demonstrating evidence of local support and zoning approval is required for all applicants. This could be the most challenging part of the process, which is one of the reasons we believe Empire City and Resorts World NYC are front-runners for two of the three licenses.”
Estimates: CBRE suggests the potential TAM for the NYC area would be a GGR of ~$4.8bn for three casinos.
The TAM would be impacted by the ultimate tax rates, locations, scale, and scope of the three casinos.
The NYC metro area is home to over 19m residents with an average income per capita of nearly $80,000, “making it one of the largest and most lucrative markets in the world”.
And the winner is… MGM: CBRE suggest MGM is best placed to win one of the licenses at its existing Empire City property.
CBRE estimate a full casino at Empire City could generate $1.28bn of gaming revenue and $1.45bn of total revenue.
That would translate to ~$500m of EBITDA. They noted that MGM said it would invest up to $1.3bn of spend on a New York casino.
Also likely to get a license: Resorts World NYC.
New York sports-betting: Online sportsbooks have generated just under $5b in handle since statewide mobile wagering launched Jan 8. Those numbers were bolstered by $312 million in betting handle for the week ending April 3, according to the NYS Gaming Commission. Mobile GGR came in at $15.2m putting 2022 GGR total at $329.7m.
FanDuel Sportsbook led both by handle ($1.83bn) and GGR ($113.8m) with DraftKings in second in both categories ($1.22bn and $84.5m respectively).
Jefferies digital traffic survey
As you were: The monthly survey from the analysts at Jefferies looking at traffic data and social media engagement shows the top three remaining static in March led by FanDuel, DraftKings and BetMGM. Barstool and Caesars swapped places in fourth and fourth respectively. The gap between 6th and 12th widened.
Partnerships
Maple Leaf Sports & Entertainment has announced its second official sports-betting partnership in a week, this time with PointsBet. MLSE previously announced a deal for the Toronto Maple Leafs, Raptors, Argonauts, Marlies, and FC with Flutter’s FanDuel and PokerStars.
Datalines
Indiana: GGR for Mar22 was up 9.9% YoY to $225.6m and a 5.8% increase on Mar19. Sports-betting handle was $476.8m, up 51% YoY and up 17% MoM while AGR was up 24% YoY to $32.6m.
By handle, FanDuel led with 30% followed by DraftKings (29%), Caesars (15%), BetMGM (12%) with Barstool/theScore on 7%.
For AGR, FanDuel led with 38% followed by DraftKings (21%), BetMGM (15%), Caesars (12%) and Barstool/theScore on 9%.
Macau: GGR remains at its lowest levels since October, the last time Macau had a local COVID case. Weekly figures show GGR at US$123m, down 87% on the same week in 2019 and 64% down YoY.
The poor figures were attributed to further Covid outbreaks in China. The number of daily visitors in and out of Macau was 35,000 for the week, up 3 percent week-over-week but still well below the 47,000 in February.
Newslines
The sign of four: Hard Rock Digital has officially launched its sportsbook app in Arizona, in partnership with the Navajo Nation Gaming Enterprise (NNGE). It brings Hard Rock Digital’s state tally to four alongside New Jersey, Iowa and Virginia.
Not interested mate: The expression of interest process for the sports-betting license in Victoria has been suspended due to… a lack of interest. It comes after several potential bidders pulled out of a process that started in Sep20. Tabcorp’s monopoly is set to expire in 2024.
Is this safe? Paysafe has expanded its partnership with Betsson to include the operator’s debut in Colorado under its Betsafe brand.
What we’re listening to
Carsten Koerl from Sportradar speaks to Bloomberg’s Business of Sports podcast.
What we’re reading
In the ring: NBA chairman Larry Tanenbaum has joined the consortium being put together by Stephen Pagliuca.
Welcome to the funhouse: Magic mushrooms help ease depression.
On social
Look who it isn’t: Bet365 tops online Ontario poll.
Calendar
Apr 12-14: ICE, London
Apr 13: Super Group Q4
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com