Weekend Edition #69
Caesars’ Times Square bid, Sightline’s JP Morgan investment, Entain’s new term loan, sector watch – affiliates +More
Good morning and welcome to the latest Weekend Edition. On today’s agenda:
Caesars Entertainment opens up on Times Square casino bid.
Sightline Payments receives an investment boost from JP Morgan.
Entain negotiates a new term loan to help pay for SuperSport deal.
Sector watch looks at affiliates and the news this week on Playmaker acquiring Wedge.
Pennsylvania, Michigan, Arizona, Maryland and Louisiana data.
First big suit on the moon and he starts to play golf.
Caesars’ Times Square push
The casino giant has teamed up with SL Green Realty in proposing a casino development at 1515 Broadway.
Be a part of it: Caesars Entertainment and its real-estate partner promise “significant investments in security, traffic and mass transit improvements” in Times Square as part of its bid to open a casino in the heart of midtown.
Caesars has promised “billions in tax revenues” as part of the deal. Marc Holliday, CEO of SL Green, said a casino in Times Square would be “in keeping with existing uses in the area”.
He added that a renovation of an existing site would mean the development would be able to open quicker than those building anew.
🚨Plugging the benefits in terms of security, former New York City Police Commissioner William Bratton said: "We know how to bring crime rates down in Times Square because we've done it before.”
Recall, New York is allowing three more casinos in the state, with the restrictions around proximity to New York City removed.
In September, it was reported that Wynn was proposing a new property to be built in Hudson Yards in Manhattan.
That report suggested Wynn would be teaming up with Related Companies to develop a property next to the Javits Center.
The same report suggested New York Mets owner Steven Cohen has also been in talks with Hard Rock to develop a casino near Citi Field, the team’s stadium.
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JP Morgan takes Sightline stake
The cashless payment provider has secured a strategic investment from the bank’s payments arm.
Cash boost: Sightline Payments has received an unspecified investment from JP Morgan Payments, with the two working on the provision of an “integrated omni-channel solution” for both land-based and online gaming companies.
The fundraise follows two investment rounds in 2021 led by William Foley’s Cannae Holdings and Searchlight Capital Partners. The later round valued Sightline at over $1bn, making it Nevada’s first unicorn.
Earlier this month, Sightline and Acres Manufacturing announced a $300m investment project to implement cashless gaming at 250,000 slot machines across the US.
Sanjay Saraf, head of eCommerce and marketplaces at JP Morgan Payments, said his company believes “industry-specific contextual software” is critical to the take-up of payments systems across sectors.
“This investment serves as one part of a multi-channel payments strategy JP Morgan Payments will be launching in the gaming and resort space in the coming months,” he added.
Entain’s new term
Entain has upsized the term loan needed to pay for the €600m SuperSport acquisition to £1bn after what it claims was “strong demand” from investors.
Plus, plus: The new term loan clearly shows the extent to which debt is now more expensive, with the price now the overnight funding rate plus 10 bps credit adjustment spread plus a further 350bps margin. With hedging, Entain said the debt would result in an overall fixed cash cost of financing of 6.2% until September 2024.
Alongside maximizing liquidity, the new term loan also means Entain won’t need to draw on its revolving credit facility to complete the €550m BetCity acquisition.
Entain Sustain
Anticipation: Shifting the emphasis “from intervention to anticipation” on player safety and a £100m investment in ESG projects over the next five years were the highlights of Entain’s corporate governance day. CEO Jette Nygaard-Andersen said there was “no conflict between growth and sustainability”.
Sector watch – affiliates
The big news this week was Playmaker’s acquisition of US-focused online casino affiliate Wedge Traffic for up to $31.2m in cash and shares, including the earnout.
Crosstown traffic: The deal for Wedge sees Playmaker pay $8.5m in cash and a further C$2.8m of shares with an earnout set at a maximum of $20.7m to be paid according to certain EBITDA thresholds being hit. In the year to December 2021, Wedge generated revenue of $2.9m and EBITDA of $1.17m.
Stream team: Wedge has established a position in live casino streaming with the Slot Squad in the regulated US space, particularly New Jersey where it has a deal with Resorts.
Wedge is active in 15 other states and has relationships with a total of 15 online operators.
Jordan Gnat, CEO at Playmaker, said acquiring Wedge would allow his company to better serve “critical” customer segments in sports-betting and iCasino.
Tekkorp Capital acted as an advisor to Playmaker and Robin Chhabra, president of Tekkorp, said Wedge’s data and affiliation expertise will help PMKR better monetise its current LatAm-dominant audience.
“We know the audience is valuable to igaming operators as leading gaming affiliates are already buying PMKR’s traffic,” he added.
Acting for Wedge Traffic was Ben Robinson at RB Capital, who said they were “bullish on the combined future of the North and South American market”.
Playmaker backgrounder: In Q2, Playmaker said pro forma revenue was up 10% to $7.4m, while pro forma adj. EBITDA was down 14% to $1.9m. The group agreed a $20m convertible loan with Beedie Capital in July. Playmaker’s recent acquisitions include deals to buy JuanFutbol and World Soccer Talk.
Analyst takes
CBRE on G2E: The team at CBRE suggested the “disconnect” between valuations and actual performance has “never been wider”, with concerns over the economy meaning investors are staying on the sidelines. The team added that despite the bleak financial outlook, M&A was “not dead”.
“There does appear to be some appetite for mid-sized, single assets,” they added, citing Century and VICI’s Rocky Gap buy and the Cherokee Nation's deal for Gold Strike in June.
Downloads: Data from week 6 of the NFL season (Tuesday to Monday) showed the number of downloads was up 85% YoY at 245k for the operators that control ~90% of the online market share, said JMP. This compared with a 50% rise in week 6 of 2021. For the season to date, download numbers were up 42%.
Datalines
Pennsylvania: Retail casinos GGR in September was down 1% YoY to $280.1m and down 7.6% on a same-store basis from 2019.
Sports-betting GGR of $75.3m was up 57% YoY, with mobile representing the bulk of that at $68.1m. Promos amounted to $25.1m of 33% of total GGR.
Leaders by GGR: FanDuel led with 44.4%, followed by DraftKings (22.6%), BetMGM (8.3%) and Barstool (7.2%).
iCasino rose 15% YoY to $112.7m and up 5% MoM, led by BetMGM (28%), followed by BetRivers (23.2%) and FanDuel (17.4%).
🎯MGM leads the way in iCasino
Michigan: Sports-betting GGR in September rose 85.8% YoY to $50.4m, of which net revenue came in at $27.2m with $20.6m of promotions. Mobile handle rose 2.9% YoY to $364.5m.
Leaders by GGR: FanDuel led with 39.3%, followed by BetMGM (21.4%), DraftKings (21%) and Caesars (4.7%).
iGaming: GGR came in at $128.7m, up 26% YoY, with BetMGM in the lead on 35.9%, followed by DraftKings/GNOG (22%) and FanDuel (17.4%).
Leaders overall: BetMGM led with 31.8%, followed by FanDuel (23.6%) and DraftKings/GNOG (21.4%).
🎯MGM leads overall in Michigan
Arizona: August GGR hit $36.3m on a combined online and retail handle of $361m. Free bets came to $8.5m.
Louisiana: Land-based GRR hit $189.2m, up 18.5% YoY and 3.1% above 2019 despite the impact of Hurricane Ida. Sports-betting GGR for September came in at $32.3m on $207.5m in handle.
Maryland: Sports-betting GGR in September increased 26.8% to $6.5m on handle that was down 8% to $31.3m.
This week on E+M
On Monday, Flutter’s New York court case victory led the news, along with our revelation of Acroud’s mystery buy.
Overnight on Monday, FuboTV announced it was shuttering its US sports-betting operations, while on Tuesday morning 888 issued a downbeat Q3 statement.
Also on Tuesday, E+M issued the latest edition of Deal Talk looking into the prospects for further US exits once the current NFL season comes to an end.
Yesterday, the latest E+M pod was released, while Las Vegas Sands and Monarch issued their Q3 earnings.
Newslines
Flutter announced Jonathan Hill is to become the new COO with Paul Edgecliffe-Johnson joining as CFO from IHG in H123.
Mass attack: Almost 30 brands are set to join the race in Massachusetts, according to LegalSportsReport.
Kambi has signed a deal for retail sports-betting provision with Great Canadian Entertainment.
OddsJam has announced that it has added industry leader Benjie Cherniak as a strategic advisor.
Gamification specialist Low6 has partnered with the Canadian online sportsbook and casino Bet99 to launch NFL and NHL-themed free-to-play sports-betting products.
LeoVegas’s new sports-betting brand BetUK has secured 600 advertising spots at UK racecourses following its deal with Arena Racing.
Genius Sports has become the official data partner for Australia’s Professional Soccer Leagues.
On social
Calendar
Oct 25: Boyd Gaming
Oct 26: Betsson, Kambi, Churchill Downs
Oct 27: Evolution, Kindred, Red Rock, VICI
Contact
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com