27Aug Weekend Edition no.11
Gambling.com Q2, gaming affiliate Q2 review, PointsBet cash raise, Everi analyst note, Simplebet funding round, Nevada July GGR, Gaming Americas summary +More
Good morning and welcome to the latest Weekend Edition, which has a strong affiliate slant as we start with Gambling.com’s maiden results and a Sector Watch looking at the key factors influencing US and EU numbers in the space. We also cover PointsBet’s cash raise, Everi analyst note, Simplebet funding round, Nevada July GGR, Gaming Americas summary, Newslines +More
If you were forwarded this newsletter and would like to subscribe, click here:
Gambling.com Q2
The top line
Revenue up 66% to $10.4m and adjusted EBITDA rose 46% to $5.5m. All growth was organic. New depositing customers were up 4% in Q2 to 26,000.
H1 revenue of $21.9m up 111%, NDCs of 62,000 up 51%. FY21 revenue expected to be over 40% higher YoY.
Cold storage: Having got its IPO over the line just last month, CEO Charles Gillespie and CFO Elias Mark hosted their debut earnings call with analysts and immediately faced questions about their M&A strategy. Gillespie pointed out that conversations that had been “put on ice” in the run-up to the IPO were now being gently warmed through again and management “dusted off the contact list.”
“We aren’t trying to do as many deals as some of our peers; we will do fewer. But our outlook on M&A is positive. That was one of the purposes of the transaction and it has been great to have come back to some in-depth conversations now that the IPO has been completed.”
Dog eat dog: Asked whether the trend towards large-scale operator consolidation would have any impact on the business, Gillespie remained sanguine, saying that it was “hardly a new phenomenon.” “Even as these big consumer brands get aggregated, it doesn’t really change a whole lot for us,” Gillespie added. “In many cases we will be talking to different teams who frankly are competing to put up the best figures.” Analysts at Jefferies said Gambling.com was taking a “more conservative stance on the timing and magnitude of acquisitions” and they were trimming their forecasts accordingly. They expect FY21 Revenues of c. $49.6m and EBITDA of $21.2m.
Golden Nugget LLC Q2
The top line: Revenue up 224.4% to $934.5m while adjusted EBITDA was back in black at $283.7m vs. a loss of $26.1m in the prior-year period. Chairman and CEO Tilman Fertitta said the company expects to deliver at least $800m adjusted EBITDA for the year as it moves towards completion of the merger with Fast Acquisition Corp.
Scout Gaming Group Q2
The top line: Revenues up 121% to SEK13.9m ($1.6m) and an EBITDA loss of SEK13.3m. Over the period the B2B fantasy sports provider signed an agreement with Interwetten and launched fantasy player odds markets with Kaizen Gaming. It also signed an agreement with Razer for Fantasy esports.
PointBet cash raise
Coming up short: Pointsbet has come up substantially short of the cash it hoped to raise from a retail offering. When it announced the A$400m cash raise, an underwritten placement with institutional shareholders raised A$215.1m of the total while A$184.9m was to be raised via a discounted entitlement offer with existing shareholders. However, that placement only raised A$64.2m leaving a shortfall of circa 5m shares. An accelerated bookbuild took place on Wednesday to fill the gap. As noted previously in Earnings +More, this is the second cash call within the last 12 months after the company raised A$200m in September last year. PointsBet says the new funds will go towards marketing and customer acquisition in the US as well as other corporate expenses such as entry costs for new states.
Everi analyst note
Everi-day cash: After meeting with management this week, Truist said Everi’s deal with Penn National to launch a new digital wallet available to Penn’s myChoice loyalty program members at the Hollywood Casino York in Pennsylvania is its “most sizeable multi-state/property win” to date. They suggested Everi could see its cashless solution implemented across PNG’s property estate, compared to its previous “piecemeal, iterative tribal implementations.” Talking general trends, the analysts said payment processing data suggested volumes have “continued to hold strong and steady.”
“Consistent with operator commentary, management believes casino customers are used to wearing masks and new mandates haven’t affected behavior,” said the team at Truist.
Simplebet funding round
Getting complicated: An already busy week for Simplebet - a micro-betting supply deal with DraftKings and the news that former MGM Resorts International Jim Murren has joined the board - got busier yesterday with the news of a $30m funding round led by YouTube personality Jake Paul’s Anti Fund. The new round brings Simplebet’s funding up to $90m. Simplebet CEO and co-founder Chris Bevilacqua said the company was redefining the “intersection of sports, gambling, media and technology.”
Sector watch - affiliates
Gear differential: The evident polarization displayed the results of the listed gaming affiliates - augmented by Gambling.com and also recently Playmaker - mirror that of the industry which it feeds (or feeds from depending on which way this relationship is viewed). U.S. growth catches the eye, led by Catena Media where North American revenues rose 37% and accounted for 41% of the total. But it wasn’t enough to halt the recent slide in the share price and investors didn’t have to look far to find the culprit.
Schadenfreude: For all the growth stateside, it couldn’t mask the ongoing disaster in Germany where the affiliate sector has found itself specifically shut out of revenue-share deals. The most telling comment in this respect came from Better Collective, where CEO Jesper Søgaard spoke about discussing with partner operators how to “build partnerships more tied to performance.” Much as BC and the rest of the sector spoke about brighter hopes for the soon-to-open Netherlands market, that cannot make up the shortfall from Germany.
Breaking glass: Operators won’t be shedding any tears for now given the profitability being achieved across the gaming affiliate space. Gambling.com said it achieved an adjusted EBITDA margin of 53%, Catena Media was at 57%, Better Collective was at 32% (hurt by margin issues in its paid media division), Raketech hit 39% and while Gaming Innovation Group doesn’t break margins out, it did show media division EBITDA hitting €4.6m on revenues of €10m. In the current land-grab phase in the U.S. such data points might well be ignored as operators likely need affiliates more than the other way around. But as Germany shows, it is a fragile relationship that is likely to fracture under stress.
Nevada July GGR
Defying gravity: Despite seeing little to no convention business Las Vegas continued its recovery in July according to the latest figures, with Las Vegas Strip revenues of $794m up 46% on the Jul19 number. Macquarie analysts noted this was 14% above the previous all-time high for the month. Referring to a recent meeting with the CFO at MGM, the Macquarie team said the outlook for conventions was “upbeat” with the expectation that a return to pre-pandemic levels would occur by this time next year.
“Convention business (~20% of room nights) is still close to non-existent with we believe any revenues from group/convention in ‘21 considered ‘gravy’ for operators. Given the convention slate, we believe the demand will be there should COVID permit the schedule,” the analysts at Macquarie said.
Footfall: Locals revenue was down 11% from last month’s elevated levels though it was still up 13% on Jul19, noted the Truist team. However, their proprietary room rate survey shows rates falling sequentially,
Gaming Americas event summary
Amp it up: As Ontario prepares for full regulation of online betting and gaming, Playmaker CEO Jordan Gnat pointed out that “sports betting in Canada isn’t new, we’ve had sports-betting since 1992” in parlay form. Grey market operators have built up strong brands through regular TV and online advertising over the years, Gnat added, and with betting very much part of fans’ vernacular, the new regulations will signal the “amplification” of all those trends.
It’s a fix: On a panel talking about the realisation of fixed-odds horseracing in New Jersey, Dallas Baker, head of international operations at the Australian-listed Betmakers Technology, said one of the great challenges faced by proponents was in convincing the horseracing industry that it “wouldn’t cause the sky to fall in.” As well as being a “better solution” for betting consumers, he said it also provides “massive corporations with (deep) marketing pockets” the opportunity to market around horseracing.
Newslines
And they’re off: FanDuel and Churchill Downs have agreed a three-year sponsorship partnership which sees FanDuel take up the naming rights for the track’s six-day September meeting. Under the terms of the deal, Flutter Entertainment’s TVG will also become the exclusive partners for Kentucky Downs races except for two Breeders Cup Challenge Races where NBC parachutes in. NBC is the TV partner for the Breeders Cup which will take place in Del Mar in November.
White heat: White Hat has announced the formation of a new U.S.-facing casino content division that will operate separately from White Hat’s PAM business. White Hat hopes to launch its first studio games in the first quarter of next year.
Bragging rights: Bragg Gaming will commence trading the Nasdaq Global Select Market as of today under the symbol BRAG. Bragg will maintain its Canadian listing. CEO Richard Carter said the company hoped the move would enable it to tap the “greater capital markets interest” in the US.
Growth spurt: Betsperts Media & Technology Group which runs the Betsperts social media app, as well as the recently acquired Fantasy Life app, closed a $6 million Series A fundraising round, including investment from lead HBSE Ventures and Verance Capital. Also included in the funding round were previous angel investors Parlay Capital Holdings, Velo Partners and David VanEgmond from Bettor Capital.
Field trip: Rush Street Interactive is expanding its commitment to College Football with a new media partnership with the Field of 68 and Field of 12 Media Network which will include the production of five weekly sponsored podcasts.
Mountain to climb: Ute Mountain Casino has opened up a retail sportsbook offering in Colorado and has plans to launch a mobile version within the first few weeks of the NFL season. The sportsbook is powered by IGT’s PlaySports platform.
What we’re reading
Descending into the K-hole: The first-ever study into whether ketamine can have a role to play in treating gambling addiction.
Regulating esports: A view on the new regulatory challenges being thrown up as esports marches on.
Topped out: On the deal which will see the MLB sever its 70-year trading cards relationship with Topps and buddy up with Fanatics.
Social
Not sure what to make of this:
Calendar
8 Sept: Genius Sports Q2
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com