20 Aug: Weekend Edition, no.10
Aspire Global Q2, Rank FY, Super Group H1, US online market share analysis, sector watch - subscription TV, Pennsylvania July GGR +More
Hello, and welcome to the latest weekend edition. The different recovery paths between US gaming and its European cousins was thrown into stark relief by the figures from UK casino-to-bingo operator Rank, which showed that it had not had one day of normal trading in its financial year just gone. We also have the news from Aspire Global and Super Group, this week’s Sector Watch looks at streaming and sports-betting broadcasting and we dive into the handle-GGR detail of Michigan’s sportsbooks.
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Rank FY
The top line
Underlying net revenues dived 50% to £288.2m, tipping the company into an operating loss of £84.5m.
Grosvenor Casinos saw a 71% fall in NGR, Mecca Bingo was off by 57%, international venues was down 35% and digital NGR was down 6% to £136.3m.
As of the end of June, Rank had £98m of cash available.
Eye of the storm: In UK leisure overall, Rank was one of the worst hit companies by the pandemic.
On the earnings call yesterday, CEO John O’Reilly noted that he had previously spoken at the half-year point of there being light at the end of the tunnel. “But it turned out to be a very long tunnel,” he added.
O’Reilly pointed out that during FY21 Rank didn’t have one day of normal trading and across its various land-based businesses, the percentage of time the venues were completely shuttered reached 66% for the casinos arm and 58% for the bingo business. Even the digital business suffered as Rank is far more reliant on omni-channel custom than others while that business was also hit by more stringent rules on affordability tests. “The performance of the digital business has been disappointing,” O’Reilly admitted.
Bouncebackability: With the various staged endings of restrictions, the company said demand has “exceeded expectations.” Since reopening in May, the casino business is trading at 89% of pre-pandemic levels and bingo at 79%. Meanwhile, in digital the move to a proprietary platform has been delayed until early next year. Analysts at Shore Capital said they were encouraged by the reopening trends, albeit that digital “looks weak.”
Drawing a line: O’Reilly also tackled the upcoming UK Gambling Act review, saying Rank hoped for measures to allow the casino and bingo businesses to compete, including offering sports-betting in the Grosvenor estate. He said that generally the UK gambling sector needed a “new line in the sand” to be drawn by the review.
Aspire Global Q2
The top line
Revenues were up 27.7% to €55.8m while EBITDA was up 40.1% to €9.9m.
Core gaming revenues rose 7.7% to €30.5m, sports (Btobet) was up 105% to €2.7m, aggregation and games (Pariplay) was up 72% to €7.4m and B2C was up 45.5% to €19.5m.
The company maintained FY21 €200m revenue guidance and EBITDA of €32m.
Tiers are not enough: CEO Tsachi Maimon said Aspire Global was always clear about its U.S. objectives.
“For the US we knew it from the start, large operators will control the whole value chain and we always said we will not target Tier 1 brands: for both gaming and sport we will target tiers 2, 3 and 4.”
The group is licensed in two states, waiting on approval in a further two. It is live with Rush Street Interactive and in the process of integrating with Amelco and GAN and recently recruited Quincy Raven as US MD to help with the U.S. push.
Bringing down the house: Integrating the games aggregation platform Pariplay and sportsbook solution BtoBet has enabled Aspire Global to become a B2B “powerhouse and we’re now getting leads that we weren’t getting before,” said Maimon. The group is currently conducting a strategic review of its B2C operations which hit all-time high figures.
Buy and win: In Europe much of the focus continues to be on Germany with the launch of the gaming product Buywin in July. Maimon said it will help online casino retention rates thanks to a “unique bet contribution on transactions” enabling them to offer German players games at the standard RTP rate of 95-96% and a broader range of gaming content.
Super Group preliminary H1
The top line
NGR is expected to come in at $762.6m and EBITDA is “well within management expectations.”
Plans afoot: CEO Neal Menashe said the company continues to make progress on its NYSE listing planned for Q421. Further details will be released once the financial review of H121 is completed. Recall, Super Group has entered a definitive merger agreement with the Sports Entertainment Acquisition Corp vehicle at which time the company said it was likely to make $1.5bn in revenue FY21. In the U.S. it has an agreement to acquire the Digital Gaming Corporation, which has secured market access in 10 states. The Betway brand took its first U.S. bet in March under an existing licensing agreement with DGC.
Michigan market share analysis
Aggressive sales technique: Analysts at Eilers & Krejcik have delved into the most recent data from Michigan and suggest that BetMGM has managed to keep hold of top post overall with a 35% share of GGR across both igaming and sports-betting despite a “meaningful paring back in televised ad spend during the month.” Citing iSpot data, they point out that in the key markets of Detroit and Lansing, BetMGM’s TV ad impressions dropped by 66% and 52% respectively. In comparison, FanDuel (currently in second with 20% online gambling GGR share) only slightly pulled back while DraftKings (third with 16%) actually increased TV ad spend.
Podium finish: The team also note that if the shares in July are broadly replicated in the months to come, then DraftKings will almost certainly take second spot going forward as its recent acquisition, Golden Nugget, achieved 6% overall online GGR share. Going by the July numbers, the combination would leapfrog FanDuel with 21%. The analysts added that GNOG had achieved its best-ever online casino GGR result in July at $5.2m, up 20% MoM.
“The trend bodes well for Golden Nugget in other markets and directionally suggests that DraftKings will be acquiring valuable operational know-how,” the analysts added.
Parlay price pinch: As noted earlier this week, one apparent anomaly in the numbers from Michigan was the differential in DraftKings market share in sports-betting GGR (16%) versus handle (28.4%). The E&K team suggest there is a significant hold percentage differential between DraftKings and FanDuel, with the latter generating c.2x better hold. This could be down to FanDuel already employing same-game parlay, whereas DraftKings is only just launching the product now it has moved to its in-house platform. But the team also flagged that DraftKings’ pricing might become more aggressive now it has moved to its own platform, suggesting the hiring of Steve Baumohl as head of trading last year was significant. “Baumohl comes with a reputation for proprietary pricing and aggressive limits,” they added.
Sector watch - streaming & sports betting TV
Bella vita: Fubo TV has acquired the exclusive English language rights for Serie A and the Coppa Italia in Canada. Fubo’s pitch is centred on owning the whole customer experience and journey and leveraging its subscriber base to drive optimal CPA and CRM costs. The group added just over 90,000 net subscribers in Q2 and as it rolls out its in-house sportsbook in Q4 (Vigtory acquisition completed in March), the focus is now on signing market access deals to launch in at least three states before the end of the year. Fubo’s share price has taken a hit recently, but CEO David Gandler says he is working on building a “category defining company for the long term”.
Sinclair gets active: A fully-integrated sports broadcasting and betting environment was also alluded to by Chris Ripley, CEO of the Sinclair Broadcast Group, during a recent earnings call. The boss of Bally Sports’ broadcast partner said the group was working on obtaining the rights to a number of high-profile sports to create a D2C product that would generate “a significant amount of income coming from watch-and-play, which is the real-time gamification of a sporting event, where (viewers) can play it like a video game.” The offering is part of Sinclair’s ‘Project Active’ plan and could include different price formats and sportsbooks offering discounts and subscription-related promotions to drive players to the service. The comments were criticized by some media analysts, who said the leagues were not even aware of the plans, while others said the plan required many components to fall into place.
In the zone: DAZN boss James Rushton has laid out a similar vision to Ripley’s and said the group planned to expand activities into "betting, fantasy and commerce" and become "a sports destination platform" over the next 12 months. The new services could boost subscriber numbers and diversify revenue streams. DAZN has been on a buying spree recently, acquiring the rights to Japan’s J-League for soccer and baseball, Serie A, Germany’s Bundesliga and the Champions League and is estimated to have around 15 million subscribers to its internet service. Rushton said he expects the group to be profitable “in the near future”.
Pennsylvania July GGR
Sports-betting revenue dropped 35.3% MoM to $27.5m ($19.9m net of promotions), good for 9% hold vs. 10.1% in June. Handle was down 27.6% to $304.4m. Online casino GGR was up 63.2% YoY to $88.7m (-0.3% MoM).
Joint maneuver: Mobile share continues to be led by DraftKings and FanDuel with a combined c62.8% vs. 65.5% in June although FanDuel accounts for 38.7% of the total. BetMGM increased mobile handle to 10.5% vs. 9.9% in June, while Barstool in fourth upped mobile share 10bps MoM to 8.5% but its $23.4m handle share was its second lowest since launch (excluding the stub period in September of 2020). Rivers lead online gaming with 29.1% share, DraftKings in second at 21.2%, FanDuel third at 16% and BetMGM fourth with 8.8%. Promotions were 30.8% of mobile GGR vs. 22% in June, as a percentage of mobile handle they were 2.8% vs. 2.2% in June. Barstool and BetMGM’s YTD promotional activities represent 4.4% and 5.1% of their respective handles. For FanDuel and DraftKings they are 2.3% and 1.4% respectively.
Louisiana July GGR
GGR was up 9.7% vs. Jul19 and up 0.2% MoM.
Hurricane alley: The big news this week in Louisiana was that gaming board has adopted emergency sports-betting rules, allowing it to start the licensing process fvr the or the 20 land-based and riverboat casinos in the state. Meanwhile, Caesars Entertainment has announced plans to reinvent the old Isle of Capri Lake Charles property in Louisiana which has been hit by Covid closures as well as Hurricane Laura. The reinvention will include a WSOP-branded poker room and an all-new Caesars Sportsbook retail outlet.
Newslines
Leader of the pack: Following on from the news of its IPO, Sportradar has announced a contract extension with US sports-betting market leader FanDuel as its chosen sports data and odds supplier for the US through to 2028. Under the terms of the deal, Sportradar will provide FanDuel with access to a suite of betting products including complete pre-match betting services, live betting services, and betting entertainment tools which include live match trackers and betting widgets.
Gopher it: Gopher investments, the near 5% shareholder in Playtech, has welcomed the vote against the deal for Finalto with the consortium led by the Barnboim Group, which means Playtech can now discuss an alternative offer.
Garden stool: Barstool Sportsbook has soft-launched in New Jersey, one of five states that were flagged as ‘coming soon’ in parent Penn National’s recent Q2 results including other recent launches Colorado and Virginia. Meanwhile, those of a nervous disposition would be well-advised to ignore this Barstool charge sheet from the Media Matters organization published earlier this week.
Boys are back in town: BetMGM has announced a market access deal for the Deadwood market in South Dakota with Liv Hospitality which owns two casino properties, the Tin Lizzie and Cadillac Jack.
What I live by: Carousel has opted to rebrand its SportsBetting.com operation to MaximBet as part of the collaboration between the operator and the men’s lifestyle brand which was first announced in April. As reported earlier this week, MaximBet recently announced a market access partnership deal in the soon-to-open but somewhat over-populated Arizona market.
Approval needed: The Nevada Gaming Control Board has launched a workshop to initiate an esports technical advisory committee that could eventually lead to esports betting being formally regulated in the Silver State. Currently sportsbooks can submit an application to handle esports wagers which is then reviewed by the Control Board. The next step is now for esports to be considered a sport that would allow wagers to be taken without approval. The Nevada Gaming Commission is expected to provide an update in October.
What we’re reading
Card sharps: Major League Baseball and Fanatics are reported by the Wall Street Journal to have struck a new exclusive baseball cards agreement, bringing to an end the 70-year partnership with Topps.
Holding back the tide: Gaming establishments and tavern owners don’t like the idea of Nevadans gaming at home.
Across the great divide: Betting keeps you honest.
Calendar
23 Aug: New Jersey Q2, Elys investor discussion
24 Aug: Better Collective Q2
25 Aug: Catena Media Q2
26 Aug: Gambling.com Q2
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com