Jun6: FanDuel extends NY lead

New York data, Macquarie on online, gaming’s recessionary exposaure, startup focus - Beyond Play +More

Earnings+More

Jun 06, 2022

Good morning. On today’s agenda:

FanDuel is gaining even more ground in New York.
Macquarie suggests US online operators will see lower losses in Q2.
The startup focus is Beyond Play.

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Datalines - New York

New York OSB GGR came in at $13.8m for the week to May 29, the third-lowest weekly total since launch. It brings GGR to date to $530.4m. Handle for the week came in 4.1% up at $271.9m.

The state has now collected $270.5m in tax revenue.

The leaders: FanDuel generated 44.7% of total handle, ahead of DraftKings (26%), Caesars (14.2%) and BetMGM (9.4%).

By GGR FanDuel led over the week with 59.8% followed by DraftKings (13.5%), Caesars (11.4%) and BetMGM (10.7%). Note: Resorts World managed a minus GGR of $39k.

Since launch on Jan 8, FanDuel has accumulated $2.88bn of handle or 38.8% market share, followed by DraftKings (24.3%), Caesars (21.9%) and BetMGM (9%).

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What we’re reading

DAZN-al marking: The sports streaming channel DAZN continues to lose huge amounts of money, according to the Sunday Times, and is suffering enough strategic missteps that the end game of a float or a buyout seem more distant than ever.

The article notes former Entain CEO Shay Segev’s recent efforts to “quietly (create) a broader service” to include news provision, betting, free-to-view offerings, ecommerce and ticketing.

Getting more than you bargain for: The debate around Las Vegas-style casinos in New York rumbles on.

Macquarie on online

Telling stories: The team at Macquarie note the 20% MoM fall in handle from March to April was in line with seasonal trends, adding that with hold at a reasonable 7.6% (and assuming May and June are in line with 2021), it should mean better NGR figures across operators and, crucially, lower monthly losses.

With a steady 7% hold on implied Q2 handle of $21.9bn, it should mean Q2 GGR of ~$1.5bn or c. 6% down sequentially.
The great moderation: The team also suggested there will likely be some “moderation” in the promotional environment.
“Encouragingly,” they added that igaming remains strong with $415m of GGR generated in April, a 2% sequential decline from a record March. Like-for-like growth accelerated to 31% YoY from 29% in Mar.

Pin the tail: Ahead of the official figures for Ontario, the team suggest “conservatively” the market could be worth ~$740m this year (noting some bulls have the market pegged at over $1bn), growing to over $2.5bn in 2025.

“While more fragmented given the ‘untethered’ approach and unlimited licenses, we believe Canada will be a key market to watch given a more ‘level’ playing field.”

Gaming’s recession exposure

Sin City’s cold and empty: Penn National, Boyd Gaming and Caesars Entertainment are the most exposed to any reduced spending among lower- and middle-income player cohorts, according to Wells Fargo.

Based on their analysis of average household income (HHI), the team suggest the regional gaming customers have an HHI of $74k vs. $93k for the Strip and $80k for Las Vegas locals.
Given Penn, Boyd and Caesars’ exposure to regional gaming, they are the most exposed should this cohort suffer an inflationary spqeeze.

Outer rocks: Wells Fargo point out that Red Rock Resorts’ shares have suffered along with the rest of the sector due to macro fears, despite having a HHI of ~$82k. “We do see a dislocation,” they add, saying there will be “likely minimal” impact from a slowing lower end of the database.

The shares week

GAN I kick it: Despite the public attack last week from shareholder and former Coolbet founder Jan Svendsen, GAN’s shares held up, down only 0.5% on the week. However, the YTD performance is far more worrying, down 63%.

Checking on the bellwether: DraftKings suffered another down week, off by over 12% on the week after suffering a 10%+ fall on Friday.

The week ahead

DraftKings CEO Jason Robins will be speaking at the Goldman Sachs Travel and Leisure Conference later today (Monday), Kambi will be taking part in the Berenberg Gaming Conference on Wednesday.

WE+M’s Scott Longley and Jake Pollard will be attending the Betting on Sports Europe conference at Twickenham Stadium, London, on Wednesday and Thursday and will return with the podcast next week as a result.

Startup Focus- BeyondPlay

Who, what, where and when: Founder and CEO Karolina Pelc launched BeyondPlay (initially known as SharedPlay) in March 2021 with the objective is to be the first B2B solution for online streaming in multiplayer mode and a commitment to empowering women in the igaming industry. Pelc was then joined by COO Jacqui Gatt and CTO Cristina Turbatu.

Funding backgrounder: Beyond Play raised $2m in April 2021 in a funding round led by LeoVentures, the VC arm of LeoVegas Group, which invested €1.1m for a 25% stake in the company. “We call it Day zero investment, as the company really only started to form, recruit and build the product post-investment. We also have one more private and very influential strategic industry investor,” says Pelc.

So what's new? Pelc says ‘community connection’ - enjoying entertainment together - significantly impacts time spent on devices and user retention, but “is largely missing within real-money gaming products”.

When it comes to marketing itself to the industry, Pelc says the group uses her and her employees' personal brands to acquire new LinkedIn followers and generate prospective leads.
“For a company established just over a year ago and at pre-go-live stage, we now have over 21000 LI followers and enjoy great visibility and engagement.”

The longer pitch: Pelc says industry reaction to the product has been “absolutely amazing”. Leading operators in Europe and the US “instantly get the product appeal and truly believe we bring something completely different and fresh to the industry”.

“All markets are interesting, but the US has huge potential given the focus on the value of entertainment, influencers’ appeal and growing hostility from the traditional streaming channels towards gambling-oriented streamers.”
BeyondPlay’s solution makes “solitary game-play more entertaining and engaging for streamers to promote brands and games in a safer and more socially responsible manner”.
“Furthermore, our Jackpot solution will also create an additional engagement layer for our multiplayer product and a proven revenue-generating mechanism which will see a lot of demand from North American operators.”

Newslines

Crown Resorts is set to receive a conditional license from the New South Wales cabinet that will enable it to open its US$1.6bn Crown Sydney resort, according to Australian media. The group was deemed unsuitable for a New South Wales gaming license last year due to money laundering failings. Since then it has committed to corporate responsibility measures such as ceasing all international junkets, cashless gaming and phasing out indoor smoking.

Quarter4 has partnered with FanDuel’s DFS-focused offering DraftDuel and will provide it with its AI-backed predictive sports data and analytics data. The group will power DraftFuel’s predictive data and stats content engine for the 2022 NFL Season.

FuboTV has appointed Ben Grad as its new senior vice president and head of strategic partnerships and operations, with responsibility for developing partnerships and internal initiatives covering both the streaming and online wagering segments.