03 Dec: Weekend Edition no.25

Jason Park fireside chat, SBC Summit North America day 2, Startup Shoutout, Macau review +More

Dec 03, 2021

Good morning. We finish another busy week with DraftKings CFO Jason Park’s fireside chat during Jefferies’ betting and gaming conference. We also round up Day 2 of the SBC Summit North America with a focus on diversity and the best comments from the discussion panels we attended. Meanwhile, things are hotting up for Suncity in Macau and we have the latest Startup Shoutout.

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Jason Park fireside chat

Bear territory: The DraftKings CFO continued with the company’s schedule of fireside chats yesterday speaking to the team at Jefferies as part of their digital sports-betting and igaming conference. Speaking towards the end of a punishing week for the DraftKings share price - down over 10% at pixel time on Friday morning (asee chart below) - Park was keen to suggest that though he watched out for the share price, “I try not to pay too much attention to it”.

Off beam: Answering to the evident nervousness around DraftKings’ tech stack and whether the bid for Entain was at all related, Park was dismissive, suggesting such a read-across “couldn’t be further from the truth”.

OK boomer: The r/wallstreetbets crowd gets sight of a DraftKings short.

Call the doctor: As to interpretations around state-by-state revenue figures, Park suggested that “it takes a PHD” to understand the overall picture from the patchwork of state-by-state reporting.

“I empathise with those who only have state reports to go from,” he said. “People get these reports and scratch their heads trying to interpret them.”

A big bet very far away: At the SBC Summit North America event on Wednesday, Simplebet chairman Chris Bevilacqua - whose firm supplies microbetting to DraftKings - said the handle for that product was “on the up and up”. Park said yesterday that the “big picture thesis that the US will have a larger mix of in-game versus Western Europe is a good thesis”.

Not biting: “If you are asking me to guess on what ESPN and Disney are going to do, I'm not going to guess.”

Meanwhile: ESPN signs on-air talent to create sports-betting content.

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SBC Summit North America - Day 2

On diversity: Jan Jones Blackhurst, board member at Caesars Entertainment, got straight to the point during her fireside chat and said gaming companies were only “paying lip service” to diversity. Suggesting there was a lack of intent among boardrooms, she said management teams needed to adopt a change strategy rather than hope that diversity just happens.

“When you are doing your talent review, put up pictures, and if all the people you all look the same, then maybe you need to look at your practices,” Jones Blackhurst said. “Because it’s hard. Because it’s not going to organically happen. It’s not evolution.”

Pulling the plug: She warned that the eyes of investors were on the listed companies, assessing whether they were putting their words into action.

“You are going to see active shareholders looking at representation. At the moment, companies aren’t feeling the pain but when large groups of institutional investors start pulling their investment, you are going to feel the pain.”

Blinded with science: On a later panel, Holly Gagnon, chairwoman and co-CEO at Artemis Strategic Investment Corp., chimed in that change had not been as fast as had been hoped. “What is profoundly puzzling to me is that diverse companies are more profitable,” she said. “That’s just science. But if that’s the data, why are so many companies lacking in diversity at senior levels.”

SBC First Pitch - the runners and riders

Locker, a technology platform focused on sports and betting consumption presented by Ross O’Dwyer.
Parleh Media Group, a Canadian-focused sports-betting content provider presented by Steve McAllister.
Narrativa, an AI-generated content platform presented by Jennifer Bittinger.
Rush Sports, white-label in-game betting proposition presented by Thomas Devenishek.
Sharp Rank, an independent betting ratings agency presented by Chris Adams.

You had me at Fibonacci: A series of short presentations and attendant Q&As led to a quick decision from the startup First Pitch judges which included American Affiliate CEO Chris Grove and the announcement of the joint winners - Sharp Rank and Parleh Media Group. They get to share a prize of $90k of investment and cash equivalents. Congratulations to the winners and well done to all who took part in the Wagers.com sponsored event.

Conference quick quotes

I ain’t sayin’ nuttin’
“I’m sure he’ll have a lot to say once everything is settled.”
Sheila Morago, executive director, OIGA, commenting on the no comment from E. Sequoyah Simermeyer, chairman at the National Indian Gaming Commission on the question of Florida.

Over-nite sensation
“It took years to become an overnight success. New Jersey is now so well regulated it’s one of the main reasons why so many other states have regulated so quickly. We’re in the middle of wave 1.0 and with so many Brits and Irish coming over, no offense, the question is how do we evolve, there’s a unique US business that is being built.”
Joe Brennan, CEO of consultancy Sport AD and former industry lobbyist, on how New Jersey pioneered the way forward for OSB and igaming and how the US industry should now build its own story.

Floor is lava
“Twitter can be a great acquisition tool but it can also be a cesspool so walking that fine line is difficult.”
Kevin M. Smith, chief marketing officer, PlayUp

Swipe left/right
“You have to decide on whether your interface is going to be more like Bloomberg: lots of facts and figures; or like Tinder and based around visuals. It really depends on if you have the tech capability and the people behind it. It’s a war for talent at the moment.”
Ken Fuchs, SVP Sports, Caesars Digital, on how having a vision for a sportsbook and having the staff and tech to achieve it are key issues for US operators currently.

Don’t say flywheel, please don’t say fly… balls
“Some are entertainers, some are snake oil salesmen. Many people are trying to crack the micro-influencer market and tap into it: getting that marketing flywheel right is really interesting.”
Jason Shapiro, CEO of Betcha Sports, falls into the flywheel trap responding to a question on social media VIP tipsters and micro-influencers.

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Macau review

Sunstroke: To the surprise of absolutely no one, Suncity Group has closed down all of its VIP rooms in Macau, according to a Reuters report. This follows the arrest last weekend of chairman Alvin Chau. It topped off a bad week for the gambling enclave after the latest data showed GGR at the lower end of analyst expectations. The Deutsche Bank team noted that although the November GGR figure represented a 59.8% MoM improvement, on a two-year comparison the number was still off 70.5%.

Focusing minds: Analysts at Jefferies said the news about Chau reinforced their view that the market’s focus from here on in would be mass-market gaming and non-gaming activity. More than that, though, they also believe China’s increasingly authoritarian tendency might choke off the recovery.

“We and the market are waiting for the Macau government's findings from public consultation on gaming law public paper, with operators expecting existing licenses to be extended beyond the June 2022 expiry,” the Jefferies team wrote. “We believe this severely challenges the investment process for investors.”

Startup Shoutout

DFS to SPF: Single-player fantasy (SPF) operator PrizePicks has raised an undisclosed sum from its latest round of funding. The round was led by Phoenix Capital Ventures with participation from a new gaming-focused fund called Astralis Capital and The Player's Impact, which focuses on sport and entertainment investments.

Georgia on my mind: Discussing start-ups during the SBC conference, PrizePicks CEO Adam Wexler said the group was focused on developing its player base in the state of Georgia and revealed that Atlanta Falcons quarterback Matt Ryan and Atlanta Hawks forward John Collins had also taken part in the funding round. Other investors include Bet.Works founder Quinton Singleton, ex-FanDuel executive and COO of SportsGrid Adam Kaplan, former NFL executive Vishal Shah and David Katz, co-founder, chairman and former head of FOX Sports Digital and Yahoo! Sports.

100 club: Wexler said PrizePicks had paid out more than $100m in winnings to its players over the past 12 months. "Unlike many of the fantasy and betting operators, PrizePicks was a profitable year-to-date ahead of football season, and we wanted to make the most of our top revenue market, the NBA, converging with our second most popular, the NFL," he added.

You can email Wagers.com Earnings +More with startup news, funding and investment updates. See contact details below.

Datalines

Nevada: Sportsbooks recorded $1.1bn in handle in October, joining New Jersey in reaching the symbolic figure and beating their previous record of $786.5m recorded in September. The figure was a 66.8% rise YoY and +102.3% vs 2019. Gross win was $48.3m, including $29.8m on football bets. A record $728.6m was bet on college football and NFL teams, but results were punter-friendly, explaining the amounts wagered and margins of just 4.1%. Mobile betting accounted for 64% of the total amount wagered, pointing to increased acceptance of digital wagering in the state.

Connecticut: DraftKings, FanDuel, and SugarHouse recorded handle of more than $54.6m in the three weeks since bets were first allowed in the state on October 12. GGR was $4.9m, Foxwoods with its DraftKings partnership took nearly 75% of that amount at c$3.6m on strong margins of c15% ($23.8m in stakes). FanDuel-Mohegan record handle of c$27m and GGR of $812K (3% hold); SugarHouse and the Connecticut Lottery took c$3.8m in handle and $498K in GGR (13.2% hold). The state took more than $3.7m in adjusted revenue and $512K in taxes. In icasino DraftKings and FanDuel generated c$313m in wagers. DraftKings posted a gross win of $4.8m and FanDuel’s $4m, bringing their adjusted revenue to more than $6.6m and paying $1.2m in taxes.

Delaware: Sports betting handle reached $12.2m, the highest monthly total since December 2019 and up 37% YoY and +54.4% vs Sept21. Revenue was down 20% YoY to $1.2m and -14.3% MoM.

Newslines

Virginia slim: Sports Illustrated has received a license from the Virginia Lottery to open up in the market early next year. Virginia will be the 888-powered SI Sportsbook’s second state after Colorado.

Message in a bottle: The NFL aired its first responsible gambling ad during last night’s game between the Dallas Cowboys and the New Orleans Saints. The 30-second public service announcement features retired coach Steve Mariucci emphasizing the NFL's core message ‘Stick to your game plan. Always bet responsibly.’

Ohio: The sponsor of the bill to legalize sports-betting in Ohio says that lawmakers have reached an agreement and that he hopes to launch a bill that will authorize sports-betting to be launched no later than Jan 1, 2023.

On the radar: Sportradar is now PointsBet’s US supplier of MLB, NBA, NHL, college football and college basketball data. The groups signed a multi-year agreement that will see Sportradar supply Pointsbet with its pre-match and live betting services, trading tools, live data and content solutions, as well as its live streaming solution called Live Channel Online.