14 May: Rush Street hopes to make permanent waves +More
Rush Street interactive, Bragg Gaming, NeoGames, Galaxy Entertainment, Angler Gaming Q1s
Welcome to the last E+M newsletter of what has been another very busy week. This morning we take a look at the eagerly awaited results from Rush Street Interactive as well as Bragg Gaming’s first-quarter figures and the news on Galaxy Entertainment’s quarterly results, the last of the Macau majors to report. But we start with what RSI had to say overnight including the raising of their full-year guidance after leap forward in Q1 revenues.
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Rush Street Interactive
The top line
Revenue increased 218% to $111.8m for a net loss of $76,000, representing a contraction on the $12.9m net loss in the prior year period. Adjusted EBITDA losses hit $15.1m compared to $1.1m in Q120.
Advertising and promotional expenses amounted to 36% of revenue at $40.5m, compared to $8.5m the prior year. Monthly active users rose 166% YoY and 20% sequentially, with average revenue per MAU of $302 during the quarter.
RSI has $363m of unrestricted cash as of March 31. The company upped FY21 guidance to $440-$480m from its previous guidance of $420-$460m.
More than marginal: The company said that while it was happy to develop sports-betting market share wherever possible, its decision to focus on casino customer acquisition had been vindicated. Casino players generate five times more margin than sports bettors, it said, and cohort data showed average NGR payback period of six months, delivering 3.5x payback returns after one year and 5.5x after three years. The numbers validated its strategy of increasing marketing spend “to drive more high-quality players who are loyal and enjoy the product rather than through over-bonusing,” said CEO Greg Carlin on the earnings call. In terms of regulation, Carlin added that current sports-only states were likely to regulate online casino in the future, which would benefit RSI.
Ill communication: The re-introduction of in-person registration in early April in Illinois was touched upon by Carlin in a limited fashion. “We had strong action during the suspension of in-person registration, we have a great (casino) location (in Chicago) and expect to continue being a top operator in Illinois.”
Diversity agenda: Asked about the rise in active MAUs and its ARPMAU, Carlin said the group’s focus on quality players and UX enabled it to maintain 30% share of online slots in Pennsylvania in Q1. Seasonality in Q2-Q3 was also a factor in online casino, but not at the same level as sports betting and in states where both verticals were regulated the growth was coming “from new players rather than rises in ARPMAU”. In Michigan Carlin said the company was “very pleased with how it had grown thanks to its casino focus.” It had achieved this “without a player database to start with and thanks to our focus on casino and strong user economics.
“In addition, 53% of our casino players are female, we’re attracting diverse demographics and not just focusing on male audiences that play on sports betting.”
A relaunched Android app had been very well received by players, but a “unified app offering across different states with a single wallet” is not high up on the roadmap.
Competitive set: DraftKings and others have made no secret of their intention to develop their casino activities but RSI said it saw increased competition in the space as an opportunity to grow the overall market. “Players experience RSI, they like it and stay with us. We’re spending good marketing budgets, although not as much as others, and players are enjoying the experience.”
Adopt me: The B2B, B2C and hybrid B2B2C models RSI operated in states like PA didn’t affect acquisition or the way the platform operated, the group said.
“Although margins can be impacted by the models, PA and Illinois have different structures to other market states, the way we operate the platform and attract players is the same everywhere.”
More importantly, adoption rates were accelerating and the company argued that would not be affected by the fuller reopening of land-based casino options. “Adoption was very quick in Michigan, quicker than PA, which was quicker than NJ. Folk are getting comfortable playing online, people play at casinos and online, I don’t think the re-openings will have an impact on online,” Carlin said.
Bragg Gaming
The top line
Revenue was up 62% to €14.2m while gross profit rose 68% to €6.6m with margins rising by 200bps to 47%. Net losses came in at €1.1m while adjusted EBITDA was €2.3m. Cash and cash equivalents at the end of the period stood at €30.1m, up from €26.1m in Dec20.
Guidance for 2021 revenues remains at €47m with adjusted EBITDA of €4m.
Humblebrag: Having recently completed the $30m cash and shares acquisition of Nevada-based Spin Games, and appointed CEO Richard Carter - fresh from his stint at the helm of SB Tech - Yaniv Spielberg, chief strategy officer, said the company is laying the foundation to become a vertically integrated igaming business in the US. Due to the conditions of the ongoing Nasdaq listing process, Yaniv Spielberg, chief strategy officer, said the company wouldn’t be able to provide detail on Spin’s revenue until the deal is completed in Q4. CFO Ronen Kannor said the focus for M&A going forward would be games studios and content providers to what in-house development delivered in terms of margins and profitability. Yaniv Spielberg, chief strategy officer, said they were in advanced discussion with a number of potential targets.
Old world deals: Most of the new business action for Bragg occurred back in Europe with the launch of nine new B2C partners including PAF in Finland, platform Senator in Croatia and Casino Luzern and Maxbet in Romania. The company launched 11 new casino games in the quarter including its first proprietary game and signed an exclusive agreement with Sakuragate to distribute games ex-Japan. Spielberg said the company is live with over 140 operators.
Galaxy Entertainment
The top line
Group revenue up 1% YoY to HK$5.1bn, flat QoQ. Group adjusted EBITDA was HK$859m, up 204% but down 15% QoQ. Last 12 months adjusted EBITDA was minus HK444m.
Galaxy Macau revenues were down 3% at HK$3.4bn with adjusted EBITDA up 132% to HK$764m. Hotel occupancy was 44%. The StarWorld Macau revenue was up 1% to HK$1bn with adjusted EBITDA up 63% to $170m. Occupancy was 62%. Broadway Macau saw revenues down 72% to $15m while it made an adjusted EBITDA loss of HK23m.
Le Premier Pas: The company said the impact of Covid would mean the timelines on phases 3 and 4 of the Cotai development would necessarily be extended. It now hopes to open the Raffles at Galaxy Macau in either the late part of 2021 or early 2022.
Japan hopes: The company restated its intention to apply for one of the IR opportunities in Japan. The company said that along with Monte-Carlo SBM from the Principality of Monaco and its Japanese partners, it continues to view Japan as a long-term growth opportunity that will complement its Macau operations as well as its other international expansion plans.
NeoGames Q1
The top line
Revenues were up 46.5% to $13.3m and its share of revenues from the NeoPollard Interactive joint venture rose 736.5% to $8.2m during the quarter. Total Q1 revenues were up 113.9% to $21.5m.
Adjusted EBITDA increased 147.9% to $9.7m, earnings per share was $0.16 compared to a loss of $0.04, comprehensive income was $4.0m.
Network NGR, which includes North America and Europe, increased 184.8% to $195.8m. The company raised its guidance to $73-$77m for the year, compared to the prior range of $65-$69m.
The company will hold its Q1 analyst call today at 8.30am ET.
Angler Gaming
The top line
Swedish iGaming investment firm Angler Gaming saw revenues increase 38.5% to €13.5m, EBIT was up 31.9% to € 3,77m, margin was down slightly to 27.96% (29.38%).
Fish/barrel/gun interface: The group said Q1 was its “best ever quarter and second best in EBIT.” Post-Q1 Angler invested €300,000 for 80% ownership of a new South America-focused affiliate, which it expects to be cashflow positive before year end. An online sportsbook brand will be soft launched shortly to be ready for the Euro 2021 tournament.
Newslines
Open all hours: The Nevada gaming Board has approved a return to full capacity for Las Vegas. The Board has also announced that no masks will be needed for those that are vaccinated. “Get vaccinated already,” says VitalVegas.com
IQ test: Sports-betting technology and odds provider Sport IQ has announced seed funding of $7m led by Harlo Equity Partners, Velo Partners and former Caesars Interactive and PartyGaming CEO Mitch Garber among others. Omer Dor, CEO and co-founder, said the company now includes IGT, Bet.Works and BetClic among its burgeoning client base.
What we’re reading
It’s a roll-over: Media analyst Ian Whittaker says the roll-over of the Premier League deal announced this week was in everyone’s favour as it avoided the messiness of a bidding process which could have had huge ramifications.
What we’ve written
Rolling with the punches: A look at how the Italian market is bearing up under the triple whammy of Covid, a ban on marketing and a tax hike. For iGB.
Hard Rock an a hard place: On the likelihood that the Seminole tribe might have a lock on sports-betting in Florida should their deal with Gov. DeSantis get the legislative nod. For BettingUSA.com.
Dave P *hearts” Elon M:
Earnings calendar
14 May: NJ April data, NeoGames analyst call
17 May: GAN, eSports Entertainment
18 May: Scout Gaming Group
19 May: Catena Media
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.co