Aug 23: Better Collective makes Mass move

Better Collective Q2, DAZN Bet launch, Macau gaming update, Everi analyst update +More

Earnings+More

Aug 23, 2022

Good morning. On today’s agenda:

Better Collective set for “aggressive approach” to US opportunity.
DAZN Bet soft-launches in the UK ahead of Ontario, Spain market entries.
Truist says Juice Reel data offers “surprising insights” into user metrics.

More than a feeling.

Better Collective Q2

Revenue up 40% to €56m but adj. EBITDA was down 3% to €12.2m.
US revenues up 90% to €13.2m; Europe and RoW up 30% to €42.9m.
US EBITDA loss of €1.8m vs. a profit of €1.8m in the prior-year period.
Announces partnership with Boston.com.

Think Global: Better Collective’s latest media partnership with the online arm of the Boston Globe comes ahead of the Massachusetts OSB launch in the new year. Under the terms of the deal, the affiliate will provide VegasInsider-branded betting-related content and direct links to operator partners.

Take your partner by the hand: At the start of August, Better Collective announced partnerships with the Chicago Tribune and the Philadelphia Inquirer.
It’s not you, it’s me: This was after rival Catena Media said it was the new betting partner with NJ.com, a role BC previously held. When asked, CEO Jesper Søgaard said the deal simply came to an end contractually.
“At the end of the day, it is the result of a negotiation and a view of the attractiveness of the partnerships on offer,” he added.

Tall poppy: Revenue growth came despite a tough comparative period last year, Notably, on a quarterly comparison revenue was down 16.9% QoQ while adj. EBITDA fell 47.2%.

Back for good: Management said the US would return to profit in H2 with CEO Jesper Søgaard saying the company was taking a “very aggressive” approach to the US opportunity.
Current trading: Group revenue in July of €17m was up 36% YoY and slightly ahead of expectations.

Performance indicators: Regarding the slowdown in US marketing and promotional activity over the summer, Søgaard repeated the message that affiliates should benefit from any move to reallocate spending.

“The change in marketing focus is potentially favoring us because our business is performance-based,” he added.

Turmoil: The company said it was not affected by the ups and downs of the economic cycle, but CFO Flemming Pedersen did suggest the current market turmoil might mean it would need to seek alternative financing arrangements for any future M&A with bonds being on potential route.

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DAZN Bet launch

The sports streaming provider’s betting and gaming operation beta launches in the UK.

Casual conversations: DAZN Bet has debuted in the US with a pilot offering ahead of planned launches in Ontario, Spain and further European markets before the end of this year. The company said it hopes to “refresh the casual betting market” with a “more recreational, sociable, and relevant experience”.

Learning curve: In a press release, DAZN bet said the beta launch would allow the business to “begin to learn” how DAZN’s global users will interact with a betting and gaming offering.
“It’s a journey and we begin it now,” said CEO Mark Kemp.

Be pragmatic: The news launch will be a test for the platform provided by Pragmatic Gaming. The press release noted that “soon” DAZN would be offering betting, sporting NFTs, tickets and merchandise.

Juice Reel data

Low-hanging fruit: Analysts at Truist suggest the data from 6.2k+ active bettors using the bet tracking and analytics app Juice Reel offers insights into issues such as hold percentage, growing parlay mix and an insight into the Ontario market.

Hold my beer: The dataset shows that since the start of 2021 the individuals have generated between them $7.5m of operator GGR on $330m+ of handle or a hold rate of 2.5% compared to a state-reported average hold of 7.1%.
Not your average Joe: Truist suggest the average Juice Reel bettor may be more sophisticated and therefore - to date at least - more successful than the average punter.
The Juice Reel data displays the value of parlays to the books - the hold percentage stood at 10% in 2021 and in the YTD 2022 stood at 8%.
Picture forming: In Ontario the early player data suggests the market remains nascent with average bet sizes among Juice Reel’s users at only 60% of the US average. The hold rate, meanwhile, is 3.7% vs. the 2.5% Juice Reel average.

Macau update

Further Covid infections in 26 Chinese provinces weaken the prospects for a Macau recovery.

Living on the ceiling: The team at Jefferies says the Macau gaming revenue recovery could have reached a “near-term ceiling” following the news that 26 Chinese provinces reported at least one local infection case in the past week.

Hot steppa: There is much uncertainty with regard to when a recovery will take place in the gaming enclave despite “small positive steps” such as visitation and gaming revenue improving modestly and some relaxing of entry and quarantine rules.
The pick up: Macau revenue levels are also slowly picking up with weekly revenues up 9% WoW to MOP86m/day and average daily revenues only 11% of pre-pandemic Aug19 level, Jefferies added.

Everi Holdings analyst update

Every little thing she does: After meeting management at Everi, the team at B Riley said strong underlying trends in gaming as well as growing fintech digital wallet wins were good signs of Q3 activity.

Average annual and monthly casino withdrawal volumes were up across the board with Everi benefiting from new casino openings such as the $500m Sky River casino (pictured above) in California.
Everybody loves the sunshine: Everi is focusing on installation base increases over win per day suggesting 1,000 additional units at $40 win per day generates $14.6m of high-margin revenue per annum.
That ‘locks in’ forward recurring growth relative to a $1 swing in win amongst its install base equating to $6.3m”.

Earnings in brief

Star Entertainment: The Australian-based casino operator saw revenues for the year fall 1.6% to A$1.52bn while EBITDA dropped 44.9% to A$236.7m and the company fell to a pre-tax loss of $200m. The company was hit during the year by pandemic-related closures and a writedown against the value of its Sydney property.

Datalines

Louisiana: Land-based GGR for July was down 8% YoY to $204.2m but 1.0% up on Jul19. Same-store GGR was 6.7% above 2019. Penn’s Louisiana properties had a combined July GGR of $78.5m, down 3.9% YoY.

Whopper: Sports-betting GGR was $20.7m on $118.3m of handle, implying a whopping 17.5% hold rate.

Atlantic City: Q2 revenues were up 14.1% YoY to $828.8m while gross operating profit came in at $183.6m, down 1%. For H1 GGR hit $1.5bn, up 19.9% while gross operating profit rose 20.9% to $339.3m.

Newslines

Kambi has signed an agreement with Oaklawn Racing Casino Resort to provide its on-property and online sportsbook solutions direct to Arkansas-based racetrack and casino operator.

On the grid: BetMGM and sports-betting streaming platform SportsGrid have announced an extension of their strategic partnership with BetMGM’s trading team and experts providing insight during broadcasts.

Australia’s Northern Territory Racing Commission has issued draft regulations that would enable licensed operators to accept sports bets using cryptocurrency. As part of the process bookmakers must state whether they will accept wagers using cryptocurrencies.

English League One club Lincoln City have suspended striker Chris Maguire after he was charged with breaching betting rules by the Football Association. It is alleged that the 33-year-old placed 52 bets on matches between March 2017 and February 2022.