FanDuel’s media plays
FanDuel/Ringer deal, the shares week, the week ahead, analyst takes +More
Good morning. On the agenda for today
FanDuel extends a media deal with sports podcast specialist The Ringer.
Analysts take a look at Flutter’s CFO succession plans.
The week ahead looks forward to earnings from PointsBet, Evolution, Kindred, Kambi and Betsson.
FanDuel extends Ringer deal
FanDuel and the Spotify-owned sports podcaster have extended their multi-year deal to include further content tie-ins.
Put a ring on it: FanDuel and the Spotify-owned sports podcast provider The Ringer have extended their exclusive sports-betting partnership, according to Axios. The deal will see FanDuel betting options “increasingly integrated” into Ringer content.
As part of the deal, podcast hosts will offer exclusive betting promotions to their audiences, with FanDuel “collaborating” on content.
Selected Ringer video content will also be licensed for the betting operator’s recently announced FanDuelTV offering.
The Ringer deal builds on FanDuel’s other broadcasting and content deals including the reported $120m per year four-year deal with YouTube host Pat McAfee.
Late last week, FanDuelTV announced an NBA-centric Run It Back, hosted by former ESPN alum Michelle Beadle and former NBA star Chandler Parsons.
The great society: Earlier in the month, the company announced a partnership with the Gaming Society, a community-focused sports-betting media startup that achieved a seed funding round in April.
As part of the deal, FanDuel will sponsor Gaming Society’s NFL-focused newsletter, which will include tips and betting explainers.
Flutter CFO succession
Over the Hill: The team at JMP believes the naming of Paul Edgecliffe-Johnson as CFO, who will join Flutter from InterContinental Hotels next year, will translate well to the company’s global footprint. Current CFO Jonathan Hill will move to the role of COO.
“The management transitions should not impact the financial goals of the company looking into next year,” they added.
Post the forever war of the White Paper and the Fox arbitration, the team believes Flutter can be “opportunistic”.
“We believe a spinoff of FanDuel could be in the cards next year, and proceeds could be used to deleverage the business,” they added, suggesting a US listing should unlock value in FanDuel of up to $17bn.
They pointed to recent download data to suggest FanDuel saw “high adoption” in Q3, while elevated hold and lower promotions “should result in strong revenue trends for the quarter”.
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Datalines
New York: OSB handle for the week ending Oct 16 was flat at $323m, but GGR rose 103% WoW to $37.2m, margins remained high at 10.5%.
Leaders by weekly GGR: FanDuel (54.3%), DraftKings (27.1%), Caesars (8.8%) and BetMGM (5%).
Mississippi: Sports-betting GGR was flat at $8.8m but handle dropped 21.4% YoY to $43m. Casino GGR for central and northern resorts was down 3% YoY at $81.2m, coastal casino GGR increased 5.2% to $132.1m.
Oregon Sep22: Sports-betting GGR was up 358.3% at $5.5m on handle that rose 57.2% YoY to $39.3m. DraftKings replaced the Oregon Lottery’s Scoreboard website in January and recorded $28m in single and teaser bets and $11.2m-worth of parlay bets during the month.
New Jersey analysis
Bridge and tunnel: Looking at the most recent data from New Jersey, the team at Regulus suggested New Jersey “seems to be succumbing to two inevitable forces: New York and maturity”.
“We believe that ~20% of NJ’s online sports-betting revenue is still flattered by ‘legacy’ NY and VIP activity.
They noted this still put underlying revenue per capita at a strong $38, but 13% YoY handle decline demonstrated that New York customers were “now betting increasingly with local books rather than making the trip across the Hudson”.
The team suspected there will be roughly another twelve months of ‘normalization’ before NJ’s figures are relatively clean “which probably means further sports-betting declines from a state once held up as a bellwether of expected customer behavior”.
While NJ’s online casino market is “far less distorted” by state borders, they added that 10% YoY growth demonstrates that the “dramatic adoption curve driven by pandemic responses has matured the market quickly”.
The week in shares
Room with a Fu: It might have been expected that FuboTV would have been a gainer this week after it shuttered its betting and gaming business last week. However, as can be seen, the shares continued their downward trajectory, off by nearly 10%. While they enjoyed a slight bounce on Friday, YTD the shares are off by over 77%.
👀FuboTV shares gets no relief despite calling a halt to betting and gaming losses
Analyst takes
Boiling a frog: The team at Wells Fargo suggested the big question for the upcoming third-quarter earnings statements was “when, not if, the US gaming consumer will crack”. The team indicated regional gaming had already “softened marginally”, with Q3 same-store state revenues running at 6% up YoY vs. 8% in Q2.
Live strong: The team added that Las Vegas commentary “should be uniformly positive”.
Meanwhile, they believed online losses will be “better than feared”.
Churchill Downs: Jefferies said there was broad industry interest in incorporating horse racing on digital betting platforms with more deals possible over the next few quarters following its deal to provide horse racing markets to FanDuel.
Penn Entertainment: The same team said Penn’s Q3 digital losses are expected to rise due to marketing spending ahead of the NFL season and investments in California legislation efforts.
REITs: Truist said VICI and GLP were “seeing relative outperformance”, with gaming REITs trading better than most given the relative safety of rent vs. other REIT assets and gaming operators/suppliers. Rising interest rates were “somewhat understood by the market”, although consensus was for rates “to be lower next year from a recession”.
The week ahead
The third-quarter reporting season gets into full swing this week with PointsBet, Betsson, Kambi, Evolution and Kindred providing the highlights.
Some Scandi talking: The major Stockholm-listed operators and providers all come to the table this week with various degrees of angst attached.
Evolution is sure to be talking about further growth on Thursday. Recall, in Q2 it saw revenues rise 34% to €344m while EBITDA rose in line to €238.2m.
Both Betsson (Weds) and Kindred (Thurs) will soon be lapping easier comps with the Netherlands, but for now the pair appear to be diverging on current trading.
Earlier this month, Betsson issued an upbeat trading update saying Q3 revenues would be 15.4% ahead of last year at between €199m-€201m.
Kindred, however, said at the time of its September Capital Markets Day that average daily revenues up to mid-September were 12% lower. The good news for Kindred is that it is now back live in the Netherlands, while Betsson remains without a license. However, regulatory woes in Norway still dog the company.
Sports-betting backend provider Kambi (also Thurs) recently gave an update on the transition process around major client Penn Entertainment’s move to a proprietary platform in Q323.
PointsBet reports overnight (today). In its results in September, it said FY gross win rose 41% to A$497.8m.
Kindred board move
Agitation: Kindred might face questions this week about the move by activist investor Corvex to install one of its partners on the board via a resolution to be put before the company’s EGM. Corvex has recently upped its stake in Kindred to 15% and is thought to be agitating for a sale of the business.
In a communication last week, Kindred noted that Gemmell has “significant experience working collaboratively with management teams and boards of directors to create shareholder value”.
Newslines
Betr has withdrawn its bid for the WA TAB at the eleventh hour despite being the preferred bidder just two weeks ago. According to The Australian, the group had a late dispute with the West Australian government over the use of the TAB brand in the state and across the rest of the country. Tabcorp owns and operates the TAB brand in all other Australian states.
Underdog Fantasy has received a temporary license in Colorado and is set to launch next year in the state. The OSB startup is also planning to launch in Ohio and Massachusetts.
Gibraltar is set to introduce tiered licensing fees that will set operator costs based on their annual GGR levels.
Belgium has introduced a €200 weekly loss-limit for players. The previous weekly limit was €500.
Kaizen Gaming’s Betano OSB brand is now live in Ontario, while Pinnacle is set to launch in the province this week.
What we’re writing
On film: Scott Longley on the betting potential offered by advances in videotech for Covers.com.
What we’re reading
Mirror, mirror on the wall: Business Insider looks at the illegal online gambling market in China.
Coming on stream: The NBA and Microsoft have slashed streaming latency to 12 seconds on the NBA app.
Soul mining: Producing cryptocurrencies harms the environment, but what of US banking and major corporations?
On social
Calendar
Oct 25: Boyd Gaming, PointsBet
Oct 26: Betsson, Kambi, Churchill Downs
Oct 27: Evolution, Kindred, Red Rock, VICI, BlueBet
Contact
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com