Jul 12: LVS’s $1bn lifeline to Sands China
Sands China loan, Rank analyst update, Playtika buyout reports, Cipher funding round +More
Good morning. On today’s agenda:
Las Vegas Sands has agreed a $1bn loan to tide Sands China over the latest Macau Covid crisis.
Rank is being valued as if it will never see another overseas visitor, say analysts at Peel Hunt.
The owner of Dimers.com, Cipher Sports technology, gets a $5m Series A funding boost.
LVS Sands China loan
Show me the money: Las Vegas Sands has agreed to a $1bn loan to majority-owned subsidiary Sands China. The loan is repayable in 2028 and comes with 5% annual interest. LVS said the money would provide Sands China with working capital.
Boost: LVS and Sands China said the loan highlighted the pair’s confidence in the long-term growth potential of Macau while also bolstering Sands China’s balance sheet and liquidity.
Plunge: The loan comes at the start of a weeklong casino shutdown in Macau which hit the share prices of the major players. LVS itself was down 6.3% on Monday, rival Wynn Resorts was down 6.4% and Melco ended the day down 9.4% having been off by 13.5% during the day.
Down and out: The falls came as analysts predicted the weeklong shutdown might be extended. Bernstein noted that expectations for July GGR were now “very poor”. They also predict August will be ~90% lower than 2019 levels.
JP Morgan said July and August were now effectively write-offs.
Straw/clutch: The Jefferies team said one positive was that the internal visa scheme remains in place meaning that the recovery from the shutdown should be quicker than when the original shutdown occurred in Feb20.
There’s always a but: Limited visitation is likely until Covid is at zero (and has been there for some time) with visitors likely fearing either being quarantined in Macau or when returning home to China. Note: 500+ visitors and staff are currently holed up in SJM’s Casino Lisboa.
Inopportune: Jefferies believes the 7-day closure is an “opportunistic move” by the Macau authorities as they try to stem the latest covid wave ahead of important summer holidays, especially as visitation is already low.
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Playtika stake buying
In play: Joffre Capital, a tech-focused buyout group owned by Chinese deal-makers, is reported by Bloomberg to be seeking finance for a bid to take control of Playtika. The group is already a shareholder in the Isreal-based and Nasdaq-listed casual gaming operator.
Shi’s lost control: Joffre would gain control of Playtika via a purchase of Chinese online gaming tycoon Shi Yuzhu’s remaining holding in the firm. Joffre already owns ~25% of Playtika which it bought from Shi Yuzhu in June. Shi is thought to still own ~34% of the business.
Cipher Sports fundraise
On a dime: The Melbourne, Australia-based Cipher Sports Technology Group has announced a $5m Series A funding round led by Cygnet Capital. It hopes the money raised will accelerate its growth in the US sport-betting market.
The combined B2C and B2B company runs the consumer-facing Dimes.com, which launched in mid-2020, while in B2B terms it produces AI-powered betting advice.
The team: Cipher is led by CEO Adam Fiske with co-founders Katie Prowd, Darryl Woodford and Nick Slade and has recently opened an office in New York. Fiske said the funding round was an “incredible milestone”.
Swan song: Cygnet Capital is an Australian-based investment fund that says it has made several other (unnamed) investments in the global wagering industry.
Premium league: Cygnet Capital co-founder Johnathan Rosham said that in the current environment, sectors which “exhibit high growth and profit margins will be at a premium”.
Exposed: He added that the US opportunity, specifically, provided an opportunity to “leverage and expose our capital to above average growth in a challenging and volatile global investment environment”.
Datalines
Missouri: GGR for June came in at $151.2m, down 2.8% YoY and 5.6% above Jun19. On a quarterly basis, GGR was down 2.7% QoQ. While visitation was down 9.1%, the Deutsche Bank team have done an analysis of spend per visitor up 7.1%.
Newslines
Finito: Playtech has completed the sale of Finalto to Gopher Investments for $250m. The adjustment for trading between Jan 1 and the completion date has, however, been lowered to between $15m-$20m from the previous $25m.
Caesars will open a sportsbook and World Series of Poker Room at Harrah’s New Orleans this fall as part of an ongoing $325m renovation program.
Halt houden: The Dutch gaming regulator has issued a cease-and-desist order against Malta-based operator Gammix for illegally offering games to Dutch customers.
Verstopft: Lottoland has been blocked in Germany after the new state gambling regulator issued an order to all ISPs in the country.
Stupid punt: Michael Owen has been accused by the UK’s Advertising Standards Authority (ASA) of promoting an unlicensed (in the UK) crypto casino called Punt which is, however, licensed in Curacao.
What we’re reading
Bloomin’ marvelous: Tony Bloom backs the ban on gambling shirt sponsorship.
Buy now, blame later: Klarna blames value collapse on ‘worst market conditions since the fall of Mafeking’. Or something.
The next big rights deal: UEFA is shopping Champions League US TV rights for $2bn.
Calendar
Jul 21: Betsson Q2, Evolution Q2
Jul 22: Kindred Q2
Jul 26: Boyd Gaming Q2
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com