Feb 17: New Jersey defies the odds

New Jersey, Michigan Jan22, Tabcorp H1, Aspire G4, Wynn analyst update, Sportico fan engagement seminar, earnings in brief +More

Earnings+More

Feb 17, 2022

Good morning. A packed global agenda today.

New Jersey and Michigan reported sports-betting numbers for Jan.
Tabcorp update on its lottery demerger.
Aspire Global eschews ‘easy’ unregulated earnings.
We report back on the Sportico fan engagement seminar.

Across the great divide. Click here:

New Jersey Jan22

Sports-betting handle of $1.35bn, up 41% YoY.
Sports-betting GGR $60.2m, down 27% YoY but up 1.9% sequentially.
iCasino revenues of $137.8m were up 32.8% YoY and 3.5% MoM.
Land-based GGR of $183.6m, up 3.6% on Jan19 and 14.8% on Jan21

Smash and grab: One of the shibboleths of the short history of online sports-betting in the U.S. appeared to be smashed yesterday when New Jersey broke a new record for handle despite New York having opened up to mobile betting during the month.

And yet: Deutsche Bank noted that New York had opened after the majority of the College Bowl season and that NJ was likely helped by the tsunami of promos across the Hudson with border-crossing customers using NJ apps to hedge NY-sourced promo wagers.

Deutsche Bank: “Given New Jersey does not provide promotional metrics, it is also difficult to discern what, if any, promotional activity took place in New Jersey ahead of or around the launch in New York.”

Handle by sport: Football $340m, basketball $554m, parlays $268m, others $201m.

Market shares: Wells Fargo estimated the markets shares in sports-betting with FanDuel ahead on 61% followed by DraftKings (16%), BetMGM (8%), Penn (5%) and Caesars (4%).

**Sponsor's message: Spotlight Sports Group (owned by Exponent Private Equity) is a leading technology, content and media business specialising in sports betting. Working with the largest media companies in the world, including AS.com, Spotlight Sports Group offers fully managed solutions that allow publishers to maximise revenue across their highly valuable sports betting audiences.

For more information visit: spotlightsportsgroup.com

Michigan Jan22

Sports-betting handle of $532.7m, 3% up MoM.
GGR of $36.6m, up 2% MoM.
iGaming revenue of $121.2m, up 0.4% MoM.

Promo slo-mo: January promotional spend dipped significantly, down by 35% from December’s total or representing 45% of total OSB GGR vs. 68% in Dec21. However, as Wells Fargo analysts pointed out, hold at 8% was high in Jan22 vs. a lower hold in Dec21. But the lower promos will likely rebound with the Super Bowl in Feb, say EKG.

Retail ceiling: EKG noted that retail GGR in the LTM period has hovered between $16m and $35m but that Jan22’s $36m was flat YoY.

Toploader: By market share, FanDuel, DraftKings and BetMGM controlled ~84% of GGR. (Handle share was c75% - see DB chart below). EKG pointed out that the super-aggressive Caesars (at 3.3% GGR) hasn’t made as much of an impression in MI as elsewhere.

Maturing: For iGaming, EKG pointed out that another near-record month - helped by cold weather and a busy sports calendar for sports-led brands - means that monthly online per adult GGR is now trending ahead of Pennsylvania and closing in on the more mature - and wealthier - NJ.

Deutsche Bank noted Michigan’s land-based revenues were down 11.7% over the period to $99m while land-based GGR in neighboring states was generally up ~20%.

Aspire Global Q4

Revenues up 14.7% to €50.9m (+24% pro-forma to €42.6m),
EBITDA down 9.1% to €7.5m (+24% pro-forma to €7.7m).

Live M&A: CEO Taschi Maimon said the group had excelled at executing its strategy of controlling as much of the value chain by focusing on the key B2B segments: online sports betting, casino, bingo and, he added:

Taschi Maimon, CEO Aspire Global: “It is not a secret that we are on the hunt to acquire a live dealer company.”

US visa: The upcoming NeoGames acquisition will enable Aspire to accelerate the pace of U.S. deals it can sign with lottery operators, Maimon said. Note: Aspire’s PariPlay has been active in the U.S for the past two years and Maimon said BtoBet had “big plans” there as well.

Say it loud, say it proud: Maimon was keen to stress Aspire would not be distracted by the “easy money” to be made in unregulated territories.

Maimon on regulated markets: “We are not paying any attention to the black market, where we can do easy money and easy deals, I’m saying it out loud. Our focus on regulated markets means more tier 1 operators want to join the Aspire Global platform.”

Tabcorp H1

Revenue of A$2.93bn up 2.2%.
Adj. EBITDA down 14.4% to A$512m.

Oz Lottery: The demerger of the lottery and keno business remains on track, said CEO David Attenborough, and will complete in June. The business enjoyed a record first half with adj. EBITDA up 15.1% to A$358m.

Tie me kangaroo down: Wagering and media bore the brunt of the impact of Australia's covid containment measures with lockdowns meaning there were 45% fewer venue trading days vs. the prior year. Wagering and media adj. EBITDA fell 34.8% to $148m. Margins were reduced due to higher advertising costs while shops were shuttered. Gaming services static at A$21m.

Raketech Q4 earnings call

Solid air: Much of the Q&A focused on North America and Raketech CEO Oskar Mühlbach the focus was on securing “a solid footprint” in the U.S. and has established a division there with former GAN exec Danielle Parsons to head it up.

Organic growth is the aim, but “investing in and building organic growth takes time, so M&A is also attractive from that point of view to gain market share,” said Mühlbach.

Sub Club: U.S. revenues grew 149.5% to €2.6m thanks to the ATS buyout, but while New York “had a positive effect”, it wasn’t as pronounced as for other affiliates due to the ATS current subscription model.

Wynn analyst snap

Hurdle rate: Following Wynn Resorts' Q4s, the analyst at Macquarie noted the Wynn Interactive losses of $79 m in Q4 and the projected $40m loss in Q1 “highlight the difficulties in creating value for OSB/iGaming in the US.”

Sportico fan engagement seminar

Oh Superman: Talking on a Sportico seminar panel held yesterday afternoon, Karol Corcoran, the general manager for online sportsbook at FanDuel suggested a difference in the U.S. betting experience versus Europe was the degree of interest in the performance of individual players.

Karol Corcoran, sportsbook manager, FanDuel: “This player narrative has been the turbo boost for the same game parlay product. The trajectory and growth is stronger than what we have seen in other markets. It’s the Superman narrative.”

In-play catch-up: Carsten Coerl, CEO at Sportradar, suggested that the current inversion of the European model - with more pre-match than in-play in the U.S., wouldn’t be long-lasting. “It’s just catching-up,” he added. “It’s just a question of how fast.”

Can the delay: Corcoran noted, however, that latency problems, notably with TV viewers that have gone digital, were a practical issue. “How the customer consumes the sport and gets the latest betting info is not necessarily at the same speed,” he added.

Hi-frequency: Coerl said the task was to “get the same latency as the financial markets”. “But the technology is there,” he added. “Cloud computing can do this with zero latency.” Scott Kaufman-Ross, senior VP and head of gaming and new business ventures, NBA, agreed that ‘the technology is there” to enable the shift from linear to digital.

Corcoran said advances towards low latency would be a “big trigger moment for adoption”.

Further reading: The Super Bowl streaming delays measured.

Newslines

New games: Evolution will provide Sisal with a selection of online slots games from group companies netEnt and Red Tiger, extending the existing live casino partnership.

Ontario opposition: The Mohawk Council of Kahnawà:ke and the Six Nations of the Grand River have signed a Mutual Cooperation Agreement on Gaming to protect their rights to provide gaming in Canada. They will oppose the forthcoming regulation of online sports betting and gaming in Ontario in April and across the country more generally.

Boardroom level: FanDuel and Boardroom, the sports business site set up by Kevin Durant and Rich Kleiman, have signed a multi-year exclusive content-focused partnership spanning web, editorial, video, audio and social media.

Local hero: Spotlight Sports Group has announced a new partnership with U.S. media group Advance Local that will see it provide national and localized sports betting content, free-to-play games and latest scores. The partnership will be live across five of Advance Local’s 12 local media websites in states such as New York, Michigan and Oregon.