Aug 26: Weekend Edition #61
FanDuel TV, Rocky Gap Casino sale, VICI analyst update, Rivalry Q2, sector watch - payments +More
How many hours would you dedicate to watching a betting TV channel? It is perhaps the rhetorical question that lies at the heart of all discussions around the convergence of sports, TV and gambling. People love sports; a significant proportion love betting on it, and everyone watches TV. Yet the alchemy needed to make the three work together has, to date, been elusive. OTT streamer DAZN, which launched a betting offering in the UK this week, knows this. FanDuel, which yesterday announced a betting TV channel in the US, knows it. What links them is the likely belief that the prize for finding the winning formula could conceivably be transformative.
The betting world, at least, will be watching.
The US OSB market leader has announced the launch of a branded cable TV channel and a FanDuel+ OTT offering.
Broadcast news: The new FanDuel TV and FanDuel+ will go live in September with the former host of the NFL network’s Good Morning Football Kay Adams hosting a live show from LA every morning. The station will also feature content from Pat McAfee and his PMI Network, Bill Simmons’ the Ringer podcast as well as sports-betting analysis with Lisa Kerney.
Cable guys: The network will be broadcast via cable and satellite distributors such as Comcast Xfinity, Spectrum, DirectTV, DISH, FuboTV, Hulu and others.
Platform: The OTT offering will be available via platforms such as platforms including Roku, Apple TV, and Amazon Fire.
Live sport: FanDuel TV will feature live sport via an agreement with Sportradar for the provision of international basketball from Australia, China, Germany and elsewhere.
Phoenix: FanDuel TV will in part be the reincarnation of the TVG Network, Flutter’s horse racing network. FanDuel TV will feature action from tracks such as Gulfstream, Del Mar, Keeneland, Pimlico and Santa Anita.
Further reading: Variety quotes Mike Raffensperger, FanDuel’s chief commercial officer, who says “I am rebuilding TVG as FanDuel TV to be the first network built from the ground up that is designed to be watched with a phone in your hand.”
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Rocky Gap casino sale
Golden gets $260m for the Rocky Gap casino in Maryland from Century and VICI.
Golden Entertainment has sold its Rocky Gap property in Maryland to a combination of rival operator Century Casinos and the VICI REIT. Century will pay $56.1m to take over the operational side while VICI will stump up $203.9m for the ownership of the property.
The sale price represents a 10x multiple to property adj. EBITDA on a trailing 12-months to June basis. It is expected to close by mid-2023.
Century is an existing VICI tenant; its lease terms now include an uncapped CPI-based rent escalator.
For VICI, the deal price is in line with other recent transactions (GLP’s transactions with Bally and Cordish as well as Realty Income’s Wynn Encore deal.
Everyone’s a winner: Analysts warmed to the news with Jefferies summing it up as a deal which works for everyone, suggesting Golden offloads a non-core asset while it is incrementally accretive for VICI.
Just capital: “Overall, the transaction and its terms are positive for the regional group overall given the perceived limitations on deal support in the capital markets,” the team added.
Taking it back: The team at B Riley noted that as a Nevada pure-play, Golden was now plugged into the “most dynamic gaming market worldwide”, a title formerly held by Macau.
For Century, the company’s North American exposure rises to 94% of pro forma adj. EBITDA.
VICI analyst update
Tempered: Ahead of today’s news, analysts at JMP initiated coverage of VICI with a Market Outperform rating, suggesting the REIT’s strategy had been “stress tested” while recent investment activity had enhanced the tenant profile and the credit quality.
Cream of the crop: The team points out that Las Vegas remains VICI’s biggest market contributing 45% of the rents with the rest coming from regionals where they are “among the finest” in their respective markets.
Better than ever: JMP add that fundamentals across both Las Vegas and the regional markets have seen both surpass pre-pandemic levels leading to “significant margin enhancements”.
FY revenue was down 4% to A$2.37bn while after-tax losses came in at A$118.4m.
The company recorded a net profit due to the one-off gain of A$6.5bn from the demerger of the lottery and keno business.
Changes: Revenues and group EBITDA of A$381.6m (down 21.7%) were caused by continuing pandemic-related disruptions in the first half. The company said that following the demerger it had commenced a “multi-year transformation” of the business.
The company said it welcomed the structural moves instigated in Queensland, and the introduction of point of consumption tax regimes in New South Wales and the Australian Capital Territory, saying they “level the playing field” with its corporate bookmaking competition.
The Lottery Corporation
FY revenues were up 9.4% YoY to AU$3.5bn and EBITDA rose 11.9% to AU$694m. Lottery revenues were helped by turnover on jackpot games rising 22.8% and the ongoing increase in digital sales from 32.8% to 37.7%. Keno revenues were flat.
GGR rose 60% YoY to $5.3m while gross profits rose 206% to $2.1m.
Mixed reception: Rivalry’s launches in the regulated markets of Ontario and Australia were corporate highlights during Q2. However, CEO Steven Salz said the Ontario launch had been “OK relative to spend”, but “more challenging than expected” due to marketing restrictions that made onboarding tougher than anticipated.
Up against it: The first months of regulated activity also saw operators flood the market with bonus offers that made it “really hard” to differentiate and that “didn’t equate to returns” for Rivalry, he added.
Into the fall: The group is set to launch its mobile app in Ontario in October and will lean into the FIFA World Cup to benefit from ‘traditional’ sports-betting.
Slot dump: In terms of icasino, Salz said it will offer its players a mix of third-party games and in-house content with “strong Rivalry branding” and “not just dump 150 slots in an iframe”.
Sector watch - payments
Japanese breakfast: On Catena Media’s recent Q2 earnings call, CEO Michael Daly made mention of the issues that its Japanese-facing business had suffered in Japan. Noting that the unquantified downturn in revenue from Japan has been an “unpleasant surprise”, he went on to say that it was due to payment providers “backing away, at least temporarily”.
Transit of Venus: Sources have since confirmed to E+M that the payment provider in question is a company called Venus Point.
Vanishing point: They have suggested Venus Point shut up shop in the late spring/early summer and returned some six weeks later.
Tokyo drift: The situation in Japan resembles that of other deep gray/black markets where the pain point for online operators is payments. That is compounded in Japan where the trust factor with all payments is often paramount with the consumer.
Absolute ego dance: The timing of Venus Point’s temporary withdrawal from the Japanese payment space might be related to a scandal in the spring around online gambling involving an official in a prefecture who mistakenly sent $360,000 of Covid recovery money to a man in his district who gambled it away online.
Timely reminder: That prompted the intervention of the Japanese PM Fumio Kishida who commented at a budget meeting on the scandal and reminded parliamentarians that online gambling was still illegal in Japan.
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Earnings in brief
Bet-at-home: First-half revenue was down 18.6% to €26.7m while EBITDA was down 82% to €1.1m due to the deterioration caused to the company’s business by the new German regulatory regime.
The group now expects FY22 EBITDA losses of between €2m-€4.5m on revenue of between €50m-€60m.
React Gaming: Revenues rose to $845.5K vs $39K in Q2, EBITDA losses rose to $2.5m vs. -$699K YoY following the group’s acquisition of Loot.bet in February. Loot.bet launched its Isle of Man-licensed offering, the group’s near term focus will be on growth, achieving profitability and B2B contract wins, said CEO Leigh Hughes.
Real Luck Group: Revenue was in negative territory at -CA$48K, pre-tax losses were CA$1.9m. CEO Thomas Rosander said the group had restarted marketing its esports-betting offering and with work finished on its platform it will introduce more games and features to its online casino, "a high-margin vertical designed to bring engaging content to our players and near-term revenue”.
At G2E Asia, MGM Resorts Ed Bowers, president of global development, said the Osaka IR could bring in $775m in gaming tax and casino entry fees to the local authorities.
Genius Sports has agreed a partnership with Bally's Interactive to provide data and live streaming solutions as well as the Genius Trading Services solution.
Gaming Innovation Group has signed a platform agreement with new icasino brand Luckiest.com.
Comedy network and lifestyle brand Almost Friday Media will supply a range of betting-related content to BetMGM across social media and events.
StatsBomb is set to integrate its football data and trading analytics into OpenBet’s SportCast product suite ahead of the World Cup in November.
Sports-betting monitoring provider U.S. Integrity has signed a partnership with Thrill One Sports & Entertainment to monitor against betting-related fraud.
Sportradar will provide its betting integrity and monitoring services to the German women’s handball federation.
Stats Perform and Sporting Solutions have partnered to produce Opta BetBuilder, a new product set focused on props and same-game betting.
What we’re reading
Aug 29: Gambling.com
Sept 1: PointsBet FY, Codere Q2
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