Eminence tightens its grip on Entain

Entain committee move, Mojo pivots, startup focus – OddsJam +More

Feb 05, 2024

Activist investor gets seat on Entain’s new ‘purse strings’ committee.
In +More: Kindred, Wynn, Disney and ICE in the week ahead.
The $100m-funded startup Mojo pivots to B2B, sells part of its tech to Fliff.
Our startup focus is odds comparison provider OddsJam.

Activist influence at Entain

The turn of the screw: Activist investor Eminence Capital – which recently gained a place on the board at Entain for its co-founder Ricky Sandler – has now also been given a seat on a new capital allocation committee, which is set to have huge influence on how the company spends its money.

The new committee will provide “additional oversight over its portfolio of assets, capital allocation and capital structure,” according to a company release on Friday.
Sandler will be joined on the committee by chair Barry Gibson and independent board member Pierre Bouchut.
Entain previously announced the new committee would be formed in its November trading update.

Taking over the reins: The committee news is a sign of the growing influence at Entain of activist investors. Eminence came to prominence last summer when it went public with its gripes over the company’s bolt-on M&A strategy, and specifically the €750m deal for Polish operator STS.

Up the juncture: Further activist interest in Entain came from Corvex, which was also a substantial shareholder at the recently sold Kindred.
It said the company was at a “critical juncture” and could benefit from the “constructive engagement of a well-informed shareholder.”

Influencers: Sandler was invited onto the board at the start of January and immediately joined the key committee that will choose the next CEO following the sudden departure of previous incumbent Jette Nygaard-Andersen in December.

One investor source suggested the composition of the committee pointed to Gibson, Sandler and Bouchut being potentially the “three most important people” at the company.

Another fine mess: The formation of a capital allocation committee wouldn’t have been necessary if the board had, in the words of one corporate adviser speaking to E+M on condition of anonymity, “been doing its job properly.” Giving Eminence a say over capital allocation decisions was a “sign of weakness,” they added.

Paul Leyland from Regulus Partners made the point that there has “never been a problem where setting up a new committee is the right solution.”
An investor source also opting to speak anonymously suggested Entain has “got itself into a hole where it likely doesn’t end well for the company, or management.”
“It feels like Entain has long Covid,” they added.

Impatient capital: Eminence’s prominence in board decisions is an uncertainty that will impact the search for a CEO. “Some hedge fund managers can be very short-term driven, how does that work if you are trying to build long-term sustainable growth?” asked one corporate development expert.

“It can be compatible but it may not be,” the source added.
Eminence will “likely prioritize its IRR (internal rate of return) over and above enabling Entain to maximize its long-term value creation,” suggested the investor source.

ICE London 2024 will be MEGA with Soft2Bet! We look forward to showcasing our Motivational Engineering Gaming Application (MEGA), the best gamification package in the iGaming industry. We also invite partners and delegates to visit our brand new stand, where our senior leaders will be hosting workshops that will highlight our state-of-the-art technology, platform and services and of course MEGA. See you at Stand S6-210!

https://www.soft2bet.com/news/soft2bets-mega-is-coming-to-ice-london

+More

All go: There is movement on the legislative front in Georgia, where a bill had advanced albeit with a constitutional amendment kicker; Mississippi, where another OSB bill has passed the House; New York, where Addabbo isn’t letting go on iCasino easily; and Illinois, where iCasino is also in the frame. See tomorrow’s Compliance+More for details.

Allwyn has announced an investment in Instant Win Games in return for a 70% stake. In the year to April 2023, IWG reported revenues up 26% to £24.1m while pre-tax profit was up 19% to £17.9m. Co-founders Rhydian Fisher and Simon Bucknall will retain their respective roles as CEO and COO.

Flutter-owned Timeform has announced PA Betting Services is to become the official supplier and managing partner of its B2B services.

The week ahead

Big Wednesday: All eyes will be on Kindred, which is currently subject to a $2.8bn bid from French lottery monopoly FDJ. Later the same day, Wynn Resorts and Red Rock Resorts come to the earnings table, while Disney’s meeting with the analysts might provide some ESPN color.

Oh, and in case you live under a rock or have forsworn LinkedIn as some kind of Dry January lark, this week it’s the last ever London ICE. Our favorite posting: come to the stand, meet a puppy.

By the numbers

New York: Jefferies analysts pointed out that in the first four weeks of January handle increased 12% while GGR was up 34%, with strong starts to the year from both DraftKings (54% up YoY for the same period) and FanDuel (up 34%).

The margin differential across the top four continues, with FanDuel enjoying sports margins of 12.5%, followed by DraftKings (10.3%), BetMGM (8.1%) and Caesars (6.6%).

Careers+More

The big move: 888 has confirmed the appointment of Sean Wilkins as CFO with immediate effect. Wilkins joins from Superbet where he was also CFO and which was his first job in the betting and gaming sector. Before that, he worked as group CFO for Big Bus Tours.

Wilkins joins a reconfigured top team at 888 under CEO Per Widerström, who took up the post in October.

Another high-profile director is leaving Entain as it has been announced that Peter Marcus, who was leading the company RG efforts, is departing the firm.

Ryan Collinge has joined GiG as senior VP of business development. He joins from Blueprint Gaming where he was previously group director. You can see the transfer deadline day video here.

The managing director of Brazilian operator VaiDeBob, Thomas Carvalhaes, has left the firm.

Former Oddschecker executive Guy Harding, latterly commercial director at Legend, has joined Better Collective as senior director for media partnerships.

Playson has promoted Vsevolod Lapin to deputy CEO. Lapin has been at the company since 2017 and was appointed COO in April 2022.

Training day: Entain has launched a Data Academy training program in the UK, which it hopes will provide upskilling opportunities around the best use of data across the company. The program will kick off with an intake of 20 Entain employees on courses that will last more than a year.

What everyone is watching

ESPN’s Outside the Lines broadcast a four-part “examination of sports betting” starting with ‘The State of Sports Betting in the US’ last Thursday, with the rest of the shows running over the weekend. Meanwhile, 60 Minutes is set to broadcast a piece that will uncover the “growing and often addictive hold online sports betting has on young men.”

Mojo pivot, Fliff transaction

Losing your Mojo: The athlete trading startup Mojo is to concentrate on building pricing models to be sold to other sportsbooks and has sold much of its technology platform to social betting/sweepstakes operator Fliff.

According to Sportico, the sale of the tech came as part of an all-stock deal that has also seen the Mojo CTO and 20 other personnel at the company transfer to Fliff.

That ain’t working, that’s the way you do it: Mojo has retained 30 employees and has hired former Circa Sportsbook director Matt Metcalf as chief risk officer to spearhead its move into B2B provision alongside co-founders Vinit Bharara and Bart Stein. Bharara told Sportico the new aim was to “try to be the best” in originating odds. “It’s a very big focus on players, and that includes parlays.”

Mojo originally launched as a quasi-financial exchange, allowing the buying and selling of players based on performance.
However, it shuttered the B2C proposition in December. Meanwhile, it has also expanded into fantasy sports.

Read ’em and sweep: A source close to Fliff, meanwhile, said the company had been looking for a platform and “strong tech team” to build out its offering. They added there are no plans to become a “classic OSB operator” and it would concentrate on “delivering the best possible social betting/sweepstakes product.”

Courtsiding: Sportico noted that both companies had Courtside Ventures as an investor and had – via Courtside advisor Sean Hurley – facilitated the deal.
The Austin, Texas-based Fliff was founded in 2019 and secured $15m via a Series B funding round in Aug22. Raine, Play Ventures, Acies Investments and Eilers & Krejcik Gaming are among the other investors.

Join a Winning Team at InclineBet, the choice of industry leaders like Four Winds Casino, FanDuel, and Delaware North. We’re committed to partnering with you, offering expert User Acquisition, CRM, and Creative Services tailored for the gaming industry. Elevate your brand with our proven strategies. Unlock your iGaming advantage at InclineBet.

Earnings in brief

EveryMatrix: Helped by its two largest platform deals to date with the Hungarian lottery and Bet-at-home, which both went live at the end of last year, the sports and iCasino supplier saw Q4 revenues soar 87% to €36m. EBITDA in Q4 nearly tripled to €20m, with the company citing strong sports margins and “significant growth” in iCasino.

Revenue for FY23 was up 75% to €114m, while EBITDA was up 155% to €60m.

Late last year, EveryMatrix also launched a new live casino vertical, PlayMatrix.
Meanwhile, its affiliate services division was recently augmented with the addition of iGaming intelligence platform DeepCI.

Gaming Realms: In a pre-close trading update, the gaming content provider said FY23 revenue is expected to come in at ~£23m while adj. EBITDA will be “not less” than £10m. They represent 23% and 28% YoY rises respectively. During the year, the company’s product went live with a further 44 partners.

BetMakers Technology: The Australian-based sports-betting and horseracing-betting backend supplier enjoyed a 40% boost to its share price after its FY24 Q2 earnings showed significantly reduced losses of A$1.2m ($782k) vs. A$9.1m in the prior year period. Revenue rose 10% YoY to A$25.1m.

Analyst takes

Baby it’s cold outside: The Wells Fargo team said, while temperatures may have plummeted in January, they are warming to the regional casino outlook as the comp picture eases. They also saw the potential of a Trump bump if he maintains his presidential poll lead into the spring and summer. He has a “large base in many regional markets,” Wells Fargo argued.

+More startups

Fundraises

ALT Sports Data became the latest company to join the rush of announced fundraising deals in the first five weeks of the year, when it said late last week it had raised $2.5m in a seed round led by Eberg Capital and Relay Ventures.

It became the eighth announced raise since the turn of the year, following new funding rounds from ParlayBay, Splash Sports, GamePLAI, JustSlots, PlayGreen, 20Shots and Skill Money Games.
Between the eight they have raised $34.5m (with one deal undisclosed) or over a third of 2023’s total of $95.5m.
For more on the funding round rush, see tomorrow’s Startup Month edition.

Growth company news

No-code automation platform provider Flows has signed up PressEnter as its latest client. Meanwhile, co-founder of KaFe Rocks Feda Mecan has joined the advisory board of Huddle.

Startup focus – OddsJam

We’re jammin’: During the pandemic, childhood friends Alex Monahan and Ankit Goyal reconnected to co-found odds comparison and betting tools provider OddsJam. The business officially launched in April 2021, with the mission to bring the best data tools and educational content to sports bettors around the world.

Funding backgrounder: OddsJam is bootstrapped and profitable, with a small team of advisors, including Benjie Cherniak, Justin Tupper and Noah Szubski.

Put your shirt on it: “We believe there is a huge opportunity to educate people to not lose their shirts betting,” says Matt Restivo, who was recently promoted to CEO. “Some people in the industry think ‘line shopping’ is a thing – in the US, it really isn’t.”

“It’s just not how US consumers think about betting. What is a thing, is identifying value in the market with real-time data – and that is what we focus on.”
Having executed its subscription product in less than three years, OddsJam has been a “polarizing brand,” says Restivo. “Our users love us and some other companies in the industry are jealous of us.”

Do you know who I am? There are currently 40m bettors in the US alone, but “if you were to walk into a sports bar with 100 sports fans today, 98 still haven’t heard of us,” Restivo says. “We are confident that with a strong focus on producing high-quality, educational, organic content that will change.”

Cooking up a storm: OddsJam believes the combination of its content and “elite ability to create consumer products that users love will be a recipe for us to be the category-defining company in the next five years.”

“I know it sounds cliche, but it is all about the customer. That is really it,” says Restivo. “We wake up every day and think about our customers, we talk to our customers, we listen to our customers.”
“We all share a simple philosophy – the only way to build a high-quality subscription business is to relentlessly focus on the customer. A lot of people say that, but we actually do it,” he claims.

Calendar

Feb 6-8: ICE, London
Feb 7: Kindred, Disney, Red Rock Resorts, Wynn Resorts
Feb 8: Boyd Gaming

Kambi Group is the leading provider of premium sports betting technology and services, empowering operators with all the tools required to deliver world-class sports betting and entertainment experiences. The Group’s services not only include its award-winning turnkey sportsbook but also an increasingly open platform and a range of standalone sports betting services from frontend specialists Shape Games, esports data and odds provider Abios, and AI-powered trading division Tzeract. Together, we are limitless.

For more info, go to www.kambi.com

An +More Media publication.

For sponsorship inquiries email scott@andmore.media.