1 Sep: The swimsuit issue
888 H1, PointsBet FY earnings call, BlueBet FY, ESPN ‘bet’ analyst reaction +More
Good morning. 888 has announced its first-half numbers showing accelerating revenue growth being generated across all markets as the company prepares the ground for the imminent launch of the SI Sportsbook in Colorado. Meanwhile, we have the latest commentary from PointsBet’s annual results call with analysts earlier this week as well as some analyst reaction to the reported ESPN betting brand-licensing discussions.
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888 H1
The top line
Revenue rose 39% to $528.4m while adjusted EBITDA was up 39% to $97.4m. B2C gaming was up 35% to $428.8m, B2C betting up 82% to $80.3m (B2C total up 41%) while B2B rose 8% to $19.3m.
UK revenues up 57% to $222.6m, Italy up 82% to $67.9m, the rest of EMEA up 9% to $165.8m and US/Americas up 60% to $65.1m (US up 7% to $10.7m). The rest of world was down 5% to $7m.
Current trading (July and August) revenues up “mid-single digit percentage” and company says full-year revenues and EBITDA expected to be “slightly ahead” of prior expectations.
Sports, illustrated: 888 has largely completed the rollout of its news sports-betting offering (based on the previously acquired BetBright tech) with CEO Itai Pazner lauding what he claimed was a “cutting-edge” proprietary platform. The biggest development, of course, comes with the imminent launch of the SI Sportsbook in Colorado later this month, the first fruits of the partnership with Sports Illustrated. Other than a peak at a (somewhat lacklustre, to these eyes) new ad (no big star name for the campaign), the company said little about the upcoming launch other than to say its long-term aim was to be in between 12-15 states within three years.
I’m a believer: Analysts at Peel Hunt suggested the modest revenue rise in July and August was to be applauded given the backdrop of more leisure options as Covid restrictions tailed off and the impact of regulatory and compliance changes. This includes the previously acknowledged headwind of Germany where 888 previously said revenues in Q1 had fallen by between 40-50%. 888 offered little further detail though Pazner did say the company was “still making some” German gaming revenue. He added the firm was focused on the launch of the newly-licensed German-facing sportsbook. “We still believe Germany will be a big and significant market in Europe,” he added. As for other regulatory headwinds (including the UK), CFO Yariv Dafna said the weighting of the previously advised $70-100m revenue reductions would be weighted more towards H2.
PointsBet FY earnings call
Broadcast news: Coming on the same day as the official announcement that PointsBet was one of four operators chosen in the second tranche of official partners of the NFL, CEO Sam Swanell said the deal “opens up the advertising around the most popular betting sport in the US.”
“We believe that to acquire clients, to get the brand out there, we need to be in front of that audience,” said Swanell. “And if you're not an approved partner of the NFL, you're not advertising around those assets and getting access to those clients. And those that are not advertising around the NFL, we believe, will suffer for it.”
The NFL deal will enable PointsBet to fully exploit its existing relationship with NBC’s national and regional networks and means it will be embarking on a “national” marketing commitment as of the upcoming NFL season. Recall, PointsBet’s US win rose 481% to $95.8m in FY21 and is currently operational in six states and has launched igaming in two (NJ and MI).
Chasing Arizona: A setback for its further expansion plans was that PointsBet and its tribal partner (which runs the Cliff Castle Casino) failed to gain a license in Arizona. Swanell said the company hadn’t quite given up on the state though the prognosis wasn’t looking good for its participation. “If the market goes forward and is operating and bets are being taken in early to mid-September as has been sort of planned, well, that might not be possible for PointsBet anymore.” However, he added that the company will “keep looking for opportunities.” “I'd also note that there's a maximum of 20 licenses allowed under the legislation and only 18 have been handed out,” Swanell added. “So there is some room for future licenses.”
Product placement: Swanell was keen to stress what he sees as PointsBet’s advantage when it comes to the product. Following the acquisition of Banach Technology (now renamed PointsBet Europe), he suggested PointsBet was among a select group of US operators with “the ability to execute.”
“FanDuel (has) been able to hold market share more strongly than DraftKings because they have a stronger product, in our view,” Swanell suggested. “And even MGM, I'm not sure they would have done so well without the experience and expertise of Entain. So there's a common theme here. We sort of see them as the stronger operators and we would put ourselves in that category.”
BlueBet FY
The top line: The Australian-listed challenger brand which IPO’d in July saw net win rise 92.5% in FY21 to A$35.6m while underlying EBITDA rose 48.4% to A$7.5m. The company said active customers of 32,372 represented a 45.7% increase on the prior year. Post-close the company signed a market access agreement with the Dubuque Racing Association in Iowa. Bluebet is targeting five states for market entry including Virginia, Colorado and Tennessee.
ESPN ‘bet’ analyst reaction
Sportscenter: Reacting to the news late last week that ESPN was in talks about licensing the ESPN brand to a sport-betting operator for over $3bn, the analysts at Morgan Stanley said the leading sports media outlet “stands out with a massive sports-obsessed user base, reaching over 200m US sports fans per month.” But noting that between $120m-$200m in incremental EBITDA would be needed to justify the reported cost, they suggested it would be most attractive to a “legacy casino” company rather than a sport-betting operator.
Tuning out: The question immediately arises as to whether the hook up would “even be a success.”
“Not all media companies make good betting companies,” the analysts wrote. “There are numerous examples of popular media companies in Europe that were not able to translate their media mindshare into betting share, including Sun in the UK, Eurosport in France, Marca in Spain, and La Gazzetta dello Sport in Italy.”
They added that while Sky Bet in the UK suggests one successful translation, this was “driven by innovative technology and unique mind share in a much more concentrated sports media market than the US today.”
Newlines
Sport mesa: The Arizona Department of Gaming has issued 18 of the 20 available licenses for mobile sportsbooks as operators started taking daily fantasy bets in the state at the weekend. In total the ADG issued 10 tribal licences and eight commercial licences, with all major brands bar the aforementioned PointsBet obtaining their sports-betting permits in partnership with either a tribe or professional sports team. Regulated sports-betting is set to launch on NFL opening night on 9 September, although this could be delayed by two lawsuits against the state of Arizona, one of them brought forward by the Yavapai-Prescott Indian Tribe.
Points break: Pointsbet did make it onto the list of NFL-approved sports-betting partners along with FOX Bet, WynnBET and BetMGM. They join Caesars, DraftKings and FanDuel on the list of seven sportsbook brands allowed to advertise their products during live broadcasts this coming season. Of the brands with major ambitions Barstool Sportsbook is the biggest absentee from the list.
Winning combination: WynnBET went big earlier this week with the unveiling a TV ad Monday starring brand ambassadors Shaquille O’Neal and Oscar winner Ben Affleck, who also directed the spot. The ad is part fo a $100m marketing blitz planned for the new NFL season.
California dreaming: DraftKings, FanDuel and BetMGM have launched a new sports betting ballot initiative in California as part of a lobbying effort to broaden the licensing of sports-betting beyond the state's tribal interests. According to Politico, the proposal would seek to divide sports-betting tax revenues between various homelessness and mental health programs as well as dedicating an element towards tribal communities. The initiative is backed by major political operatives in the state and sportsbooks such as Bally Interactive, Fanatics, WynnBET and Penn National are also on the ticket.
Bragging rights: Bragg Gaming’s igaming platform Oryx and its remote gaming server (RGS) have been certified by the Dutch gaming authority. The company said it was “primed” for the Dutch online market opening in October as it targets key regulated markets for expansion.
On social
Last tango in Halifax: Nice work David Briggs.
We’ll take that as a no, Chris:
Calendar
8 Sep: Genius Sports Q2
16 Sep: New Jersey August GGR
22-23 Sep: SBC Summit
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com