$500m nobodies
Las Vegas giants not getting the credit for digital progress
Investors are still not valuing MGM and Caesars’ online businesses.
In +More: ESPN Bet launches an everything app.
Puts+takes: Digesting Macau’s blowout numbers, Jefferies initiates on Hacksaw.
Venture playground: In focus new games studio Posh Monkey.
Hard Rock Bet is growing – we know you know! And we want to bring in some more maestros to make beautiful music in our Sportsbook. You need to be among the very best in the industry to be considered for these roles. Are you up to it?
Ignored
Magic numbers: MGM Resorts and Caesars Entertainment both indicated last week their respective online gaming businesses are definitively on the path to producing $500m in EBITDA, but neither is getting the credit from investors.
In last week's Q2 earnings, Caesars CEO Tom Reeg said the half-a-billion in adj. EBITDA was “going to arrive right on schedule” in 2026.
Earlier on the same day, BetMGM hosted its quarterly update and CEO Adam Greenblatt was similarly bullish, though without naming a date. “We aren’t going to pin the tail on the calendar,” he told the analysts.
Inflect me with your love: However, neither company is truly seeing the benefit from investors. MGM Resorts CFO Jonathan Halkyard said the consensus value attached to the company’s 50% share of BetMGM was "very conservative” and Reeg said Caesars would need to “take a look” at whether the value was being reflected in the prevailing share price.
“Investors seem to be struggling to square the perceived potential of digital with the anticipated turbulence facing the land-based casino segment,” said Chris Grove, partner at EKG.
Questions around the sustainability of margins in what is “still a competitive and dynamic market” have been “amplified by a steadily worsening tax and regulatory environment” and a lack of new states launching OSB and iCasino.
For better, for worse: For MGM Resorts, a longstanding thorn in their side has been the joint venture nature of BetMGM with Entain. But, for all the previous chatter, the pair now seem wedded, for good or ill.
Notably, MGM's JV partner got no mentions in the Q2 call and there were no questions about the future of the marriage.
Circling the landing strip: Grove suggested investors would need greater clarity over the digital strategy, which currently remains unclear.
“There’s a path and a logic for the company to be a serious global digital player, but it feels like the larger digital strategy remains in something of a holding pattern,” he said.
Spin cycle: Meanwhile, for Caesars, the potential for a digital spin was once again the subject of a question on the Q2 call. Reeg said in answer that Caesars would “absolutely pursue a separation” if the company believed it would drive significant value.
“As long as Caesars’ digital business continues on an upward trajectory and remains undervalued within the broader entity, Reeg is right to keep the option open and to highlight it publicly,” said Grove.
But whether this public positioning represents the thinking internally is potentially more doubtful. Joel Simkins, now founder at XST Capital and previously on the equity research side at Credit Suisse, said the management team was among the “most agile financial engineers I’ve ever come across in gaming.”
“Candidly,” he said, an imminent digital spin wouldn’t be likely near term “unless the equity markets are more cooperative.”
Moving mountains: In the background is Caesars’ continued debt pile of ~$12.3bn and leverage at over 6x. Analysts at CBRE noted the digital business sits outside of the current arrangements, giving it greater leeway over potential corporate moves.
“Given the company’s leverage, if there was a way to shift some of its debt load to a digital enterprise this could put a positive halo around the legacy bricks division,” said Simkins.
The path to enlightenment: But, he added that with the “incredibly dynamic regulatory climate right now (eg, predictions market),” the story would hinge on “demonstrating the path to additional iGaming expansion, which still remains unclear.”
Grove added that “structurally disentangling retail and digital will be challenging, and that doing so will ultimately damage both businesses.”
Still, even with those risks, the potential valuation uplift from spinning out digital “could simply be too powerful to ignore.”
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ESPN Bet’s everything app
Hub thumping: Ahead of Penn Entertainment's Q2 call on Thursday, the company announced a new personalized hub for ESPN Bet called FanCenter, which it said would allow customers to easily find wagering markets based on their favorite teams, players and ESPN fantasy football rosters.
The hub is powered by ESPN and ESPN Bet’s account linking technology and will offer fans interconnected media, betting and fantasy.
It is ESPN Bet’s “biggest product leap yet,” according to Aaron LaBerge, head of interactive at Penn, who added this was the “perfect time to roll it out” ahead of the imminent football season.
+More
Takes flight: Crash games operator Spribe said the UK High Court has granted it an interim injunction preventing Aviator LLC from launching its own version of the Aviator game. Aviator LLC, owned by ex-Adjarabet owner Temur Ugulava, has sued Spribe in various jurisdictions alleging it is the actual owner of the Aviator crash game.
On hold: Tilman Fertitta has shelved plans for a luxury casino resort on the Las Vegas Strip due to a potential conflict of interest with his significant stake in Wynn Resorts, a Fertitta Entertainment spokesperson told the Las Vegas Review-Journal.
Inspired Entertainment has announced a new five-year partnership with Jenningsbet to supply 570 of its Vantage terminal to approximately 144 Jenningsbet shops.The rollout is scheduled to commence in Q4.
Compliance read across
In the post: A group of 50 attorneys general have signed a letter to US AG Pam Bondi calling for the US Department of Justice to block web access and payments to offshore gambling sites and seize their domain names. The letter referenced 2011’s Black Friday for online poker as a model for the suggested crackdown.
Earnings extra
Sportradar
Just about managing: Sportradar’s Managed Trading Services offering signed 50 new sportsbooks throughout 2024 and is currently integrating a further 42, as the outsourced trading business continues to help deliver strong earnings. Total betting turnover for MTS hit nearly $42bn, up 23% YTD, as CEO Karsten Koerl extolled the move towards operators increasingly outsourcing their trading operations.
See today’s Earnings Extra edition to be sent later this morning.
Playstudios
Swimming against the tide: Others may be exiting the sweepstakes space but this isn’t stopping Playstudios from moving ahead with its own expansion strategy, with operations now up-and-running in seven states. “We intend to be very active in trying to help bring more credibility and legitimacy to this opportunity,” CEO Andrew Pascal noted on an earnings call dominated by questions about sweeps.
See yesterday’s Earnings Extra edition (PRO subscribers only).
Earnings in brief
Accel Entertainment: Revenue of $336m was up 8.6% YoY, driven by growth across core and developing markets. The company ended the quarter with 4,427 locations, up 3.1% and 27,388 gaming terminals, a 3.4% increase. Adj. EBITDA rose 7% to a record $53.2m. CEO Andy Rubenstein reiterated Accel’s strategy of disciplined expansion and operational excellence to deliver long-term shareholder value in a resilient, growing market.
Zeal Networks: In H1 the lottery reseller reported a 32% YoY revenue increase to €101.5m, driven by 33% growth in its core Germany segment and a 49% rise in games revenue. The lottery business benefited from higher gross margins following a June 2024 price increase, a favorable product mix and increased monthly active users. EBITDA surged 76% to €35.4m.
Puts+takes
Macau
Macau is back, baby: July’s blowout numbers for GGR of $2.77bn were a 19% surprise to the upside, being the best monthly figures since the pandemic and reaching 90% of the July 2019 number.
Jefferies said the growth appears to be driven by more active promotions by operators in conjunction with entertainment events.
“Nonetheless, the strength establishes higher expectations for Golden Week in October,” the team added.
Macau and the big mo: Deutsche Bank is forecasting the August figure to be at least 10.5% higher than the prior-year period, but suggested the data pointed to a potential 14.5% YoY improvement. The team at Seaport is similarly saying that August growth will likely be nearly 15%.
The team expects the “inflection in growth” to continue and, as such, has raised their Macau market 2025 GGR growth forecast from 7% to 9% with 13.7% in H2 vs. 4.4% in H1.
Seaport said growth should be driven by increased marketing and improving China consumer sentiment, coupled with stronger higher-quality average visitation into Macau.
“A trade deal between the US and China is likely to further boost consumer confidence and willingness to spend and travel to Macau,” the analysts added.
Hacksaw Gaming
Disruptive influence: Jefferies has initiated coverage on the newly listed games provider with a Buy rating and a price target of SEK130 ($13.44), implying 70% upside from current levels. The Nasdaq Stockholm debutant is described as a high-margin disruptor with a differentiated B2B iGaming model and significant growth potential.
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Venture playground
Funding rounds
Me oh my: The multiplayer-focused social casino company MyPrize said it has completed a $21m strategic funding round, led by existing investors Boxcars Ventures and crypto investment fund Dragonfly. The company said the new cash would support further growth initiatives.
MyProze did not say what valuation the new cash had been raised against. However, a valuation last year after two previous funding rounds valued the company at $140m.
CEO Zach Bruch, who founded MyPrize in 2023, said the company wants to create community through social gaming as it scales.
“Our multiplayer is a huge differentiator because it helps create community, which for us helps deliver a fun experience with your friends online,” he added.
In focus – Posh Monkey
Who are you? Posh Monkey is a London-based games development studio founded by experienced iCasino professionals Connor Blinman and Deepak Bhinder within the past couple of months, with the aim of providing “top-tier content.”
Blinman and Bhinder have notched up stints at games providers such as Play’n GO, Print Studios and Gaming Corps.
What is the big idea? Posh Monkey is focused on delivering top-tier online casino content. Its leadership team brings decades of collective experience from across the iGaming ecosystem.
“Our goal is simple, to create exceptional games that combine sharp mathematical models with immersive design and storytelling,” says Bhinder.
KPIs: Part and parcel with joining Velo Partners’ RNG Foundry, the company has already entered into an exclusive game development and distribution agreement with Games Global and its global network of operator partners.
RNG Foundry is Velo Partners’ dedicated gaming accelerator, backing talented entrepreneurs and developers across the real-money gaming industry. It is the most active investor of its kind globally.
“RNG Foundry offers more than just funding, they bring invaluable industry knowledge and connections,” Bhinder adds.
Funding backgrounder: The company recently announced the strategic investment from betting and gaming sector endemic VC Velo Partners via its RNG Foundry accelerator. “The investment and support allow us to move quickly and focus on building standout games for global audiences,” says Blinman.
Growth company news
Blask has opened a curated, free‑to‑use slice of its iGaming market data on the web, making headline signals available to anyone. The public Market Analytics page lists 85 countries side by side and shows two core indicators for each market: the current Blask Index and the number of active brands.
Sports tech and fantasy sports content provider Betsperts has acquired Fantasy National Golf Club from SportsHub Games Network. Fantasy National provides tools and insights to fantasy golf players and golf bettors.
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Upcoming earnings
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Aug 13: Evoke
Aug 14: Rank, Bragg Gaming, Gambling.com
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