11 Aug: AGA - Gaming to the moon
AGA Q2 summary, Fubo TV Q2, Full House Resorts Q2, Missouri and Ohio July GGR +More
Good morning. Space is the place today and we start with the AGA quarterly report which confirmed what we already know - the gaming sector has enjoyed a blowout quarter and the good times look set to continue, even if caution still needs to be applied. Then we have the latest from Fubo TV and its plans for sports streaming and betting, the latest regional gaming numbers from Full House Resorts, Missouri and Ohio GGRs + newslines.
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AGA Q2
The top line
US commercial gaming revenue reached a record $13.6bn in Q221 vs. previous record of $11.1bn in 2019. At state level, 22 out of 25 commercial casino states saw GGR increases over the two-year comparison.
Slot GGR was up 16.7% on Q219 to $8.7bn, table games GGR up 0.8% to $2.1bn. Sports betting GGR was up 643% on Q219 to $889m (down 8% QoQ), while igaming GGR was up nearly 692% on 2019 to $901.2m (up 15% QoQ).
New and old: Both newly-regulated sports-betting states and newer and existing igaming jurisdictions such as Michigan and New Jersey had contributed to strong performances for AGA members.
CEO Bill Miller said: “The industry is on its way back and in any other sector there would be a victory lap, but full recovery depends on the full return of conferences, events and international travel.”
He added that the industry’s strong performance will be sustained, but it was reasonable to assume that it would soften once “more leisure options are available and people diversify how they have fun.”
NY state of mind: Asked about the six consortia applying for mobile-wagering licences in New York and whether the winning bids would provide real choice and competition to consumers, Miller said it was not in his remit to comment on how states approached regulatory issues.
Miller added: “Today the illegal market has the strongest control over those wanting to wager in New York, so regardless of the composition of the applicants it will be a good day when New York citizens are able to bet legally.”
Keys to Florida: He adopted the same tactic when discussing the approval of the Seminole-Florida gaming compact by the DOI at the end of last week. The Seminole are AGA members and “believe they’re continuing to move forward,” he said. “We represent healthy and vigorous competitors and opining on who should be winning through is not for the AGA.”
Cashless evolution: The gradual introduction of cashless payments has been one of the biggest changes to the operations of the land-based casino industry. Miller said he always believed “payment modernization was important because it aligns with consumer needs and desires and we should be responsive to that.” The move to cashless also resonated with government agencies, “which have always been clear about tackling money digitally in terms of origin of funds and to fight money laundering,” he added. The industry hasn’t switched “to digital overnight, but the evolution is taking shape.”
FuboTV Q2
The top line
Total revenue up 196% YoY to $130.9m, advertising revenue up 281% YoY to $16.5m. Adjusted EBITDA loss up 13% to $47.4m, adjusted EBITDA margin improved 5,876 bsp to c36.2%.
Total paid subscribers up 138% YoY to 681,721, including 91,291 net subscriber additions in the quarter.
The company increased FY revenue guidance 116% to $560-570m and guidance on year-end subscribers up 67% to 910,000-920,000.
Live sync: During his prepared remarks, Fubo TV CEO David Gandler showed a clip of how the company’s sports streaming service will sync with its sports-betting offering to offer viewers bets on the games they are watching in real time. “Everything is subject to regulatory approval and we’re on track to launch (sports-betting) during Q4,” he said. The focus is now on market access deals with the aim of launching “in at least three markets before the end of the year.”
Lookin’ fly: Asked how the group will stimulate demand in a packed marketplace, Gandler said it would leverage its subscriber base to reduce marketing, acquisition and retention costs. The ability to market two services “that are unified and give customers the opportunity to use and interact with both products is an opportunity to create truly compelling promotions during NFL season,” Gandler added. “We’re very bullish on the integration of these products and believe the flywheel will be very strong.”
Full House Resorts
The top line
Revenue increased 226% YoY to $47.4m while adjusted EBITDA returned a positive $14.9m compared to a loss in Q220 of $1.4m.
Smarkets timing: Full House now has five out of its six permitted sports-betting skins operating in Colorado and Indiana with the final one, Smarkets in Indiana, due to launch imminently. In Q2 only two were operational and revenues for the contracted sports wagering division stood at $463,000 and EBITDA came in at $447,000. On the call, CEO Daniel Lee said that the five currently up and running would generate c$6m in annualised revenues, rising to $7m annually once all are launched. Recent launches under a Full House skin include WynnBet in Colorado.
Bulls and GOATs: Addressing the issue of 2020 comparatives, Lee struck an unexpectedly vehement tone suggesting it was a “completely bullshit comparison”. The fairer comparison, as with all land-based casino operators, is 2019 and here, as with the rest of the sector, the news is all about the margin improvement where FH achieved 29% H1 margins vs. 10% in H119. Said the Macquarie analyst team: “As we’ve seen across the US Regional Gaming landscape, this is arguably the greatest moment in the industry’s history with respect to margin maximization.”
Missouri July GGR
Statewide GGR hit $167.4m for July, up 15.9% vs. Jul19 and up 26.7% versus Jul20. Visitation was down c13% versus Jul19 but spend per visitor was up c33%, MoM GGR was up 7.4%. The St. Louis market, including both Missouri and Illinois casinos, generated $91.2m in GGR, up 6.1% vs. Jul19 and up 6.1% MoM. Missouri casinos in the Kansas City market generated $64.1m in revenue, up 20.9% vs. Jul19 and up 12.6% MoM.
Ohio July GGR
Ohio GGR was up 30.2% vs. 2019 and +7.3% MoM to $211.2m. Slot handle was up 33.2% and slot revenue up 31.6%, hold was down c.11 bps. Table games were up 16.2%, table revenue increased 21.6% and hold was up c. 109 bps. Penn National’s four casinos generated $73.8m in GGR, Boyd Gaming’s Belterra Park produced $8.8m in GGR, MGM's Northfield Park generated $24.8m in GGR and Caesars’ Scioto Downs generated $21m GGR.
Newslines
Next please: NBC has moved to streamline its betting and gaming-related activity along with its youth and recreational efforts - under the banner NBC Sports Next. This includes NBC Sports Enterprises which includes fantasy sports offering NBC Sports Edge (formerly Rotoworld) as well as the NBC Sports Predictor offering.
Marketplace live: DraftKings Marketplace for NFTs is now live and will see its first Preseason Access Collection drop later this week. The exclusive debut content is provided by Autograph and includes Preseason Access Passes from top athletes such as Tom Brady, Wayne Gretzky, Tony Hawk, Naomi Osaka and more soon to be announced. See the Fox Business interview with Jason Robins below for his hopes on Marketplace and more.
Blue on blue action: Australian-listed BlueBet has announced a market access deal for Arizona via a partnership with the Colorado River Indian Tribes (CRIT) who run the Bluewater Resort & Casino. A licence application has been submitted and is expected to take four weeks. This is the second market access deal for BlueBet following its agreement with the Dubuque Racing Association in Iowa.
Yo coach! Legendary Chicago Bears coach Mike Ditka has signed up as a brand ambassador with Rush Street Interactive. Hall of Famer Ditka played 12 seasons for the Bears before leading them to the Super Bowl as head coach in 1985.
An independent view: SciPlay has appointed a special committee of independent directors to “review and evaluate” the proposal from Scientific Games to buy up the remaining 19% of the shares it doesn’t already own. The committee consists of William Thompson, Gerald Cohen and Michael Marchetti.
What we’re reading
I’m with Jeff: Robins says DraftKings has ambitions to be like Amazon following the NFT Marketplace launch.
Magical mystery: How Las Vegas casinos allowed a London-listed, Dublin-based company to waltz into its backyard and take the lead.
On social
Wave everyone! Las Vegas from space.
Calendar
12 Aug: Entain H1, Leovegas Q2, Bragg Q2, Zeal Network Q2, Acroud Q2
13 Aug: NeoGames Q2 earnings call, Sector watch - payments
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com