Hornbuckle: BetMGM’s UK launch ‘the best test’
MGM’s aspirations, NFL promos examined, Better Collective fireside chat, startup focus – BetChill +More
Good morning. On today’s agenda:
MGM Resorts CEO defends BetMGM’s UK-first expansion plan.
Analysis shows NFL promos are up on 2022 – but for new users only.
Better Collective has no intention of holding back on M&A.
Startup focus: Stockholm-based sports-betting platform provider BetChill.
Don’t know what I want but I know how to get it.
MGM’s aspirations
CEO Bill Hornbuckle suggests the company ‘just happened’ to choose the UK for the first international launch of BetMGM.
Upfront and personal: CEO of MGM Resorts Bill Hornbuckle insisted his company had always been “clear” with its BetMGM JV partner Entain about its own international ambitions for online. “We want and need to be a digital player at scale,” he said during the Bank of America investor event late last week. “We’ve been clear about that since day one.”
He added that the choice of the UK as the first test market was driven by expediency rather than because it happened to be Entain’s home market.
“It’s a huge market with a lot of established players,” he said. “It’s not going to be easy to break into but we really want to try to test the validation of the brand and see if it’s meaningful.”
He added that MGM thought the UK would be the “best test”.
On the lookout: The medium- to long-term prognosis for BetMGM was good, Hornbuckle suggested. “We'll see what happens in the third quarter,” he added. “But the push next year will be money-making.”
He reaffirmed that neither MGM nor Entain envisaged having to inject any more “substantive reinvestment” into the business.
He again took the opportunity to praise Entain as a partner.
“I'll give them credit because they’re basically the technology partner [and have been] really focusing and getting some important things accomplished.”
“It’s absolutely in their best interest – and in our best interest – to focus everything we can here and, in fairness to them, they’ve been doing a very good job of that.”
He added that neither company was getting the credit from investors for BetMGM right now. “At some point, time will tell,” he said, somewhat gnomically.
“I like where we are; I like what it’s been designed to accomplish. Where we go from here, I think it’s somewhat unlimited.”
Putting the money to work: Asked about M&A, Hornbuckle noted that in Las Vegas MGM was “pretty full right now” having recently completed the buyout of the Cosmopolitan. If there were to be any utilization of the company’s cash pile of $2bn, he suggested it would be in the area of online.
“The idea of owning our own sports-betting technology is interesting,” he said.
“We would love to get in the live dealer business,” he added, mentioning MGM’s scale, scope, and brand.
Horn of plenty: Taking a brief tour around the world, Hornbuckle noted that contrary to recent reports the Osaka IR in Japan remained on track, while in Macau MGM China had managed to beat market share expectations and in New York the company was hopeful of gaining one of the three downstate casino licenses.
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NFL promos
Generosity levels ahead of NFL kickoff are up on last year – but for new users only.
A new you: Promotional spend ahead of the new season was “slightly” up on 2022 but, crucially, this was driven by offers to new users, according to analysts at Wells Fargo. Laying out the offers, the team found DraftKings saw the “most significant decline” while rival FanDuel was up on last year.
FanDuel was offering $200 in bonus bets across the majority of states vs. a typical $150 in bonus bets in 2022.
DraftKings, in comparison, was offering $200 in bonus bets vs. a typical $1k deposit match last year.
BetMGM made promotional offerings across states of either zero, $200 or $1,500 in bets vs. $1,000-worth in 2022.
Caesars offered the same promotion across the majority of states of $250 in bets vs. $1,250 in 2022.
Setting out the merch stall: Fanatics Sportsbook (now including the PointsBet operation in some states) was offering $100 of merchandise credits to new bettors, which, as the Wells Fargo team pointed out, is a lower implied value than the widely available $200 in bonus bets offered elsewhere.
“While still early, we believe this could portend well for the 2023-24 promotional environment not going back to irrational levels with new entrants, though this is subject to change, especially once ESPN Bet launches in November,” they added.
Summer slumber: The team also noted that in the states where promo spend is registered, there was a 16% YoY decline in July across Pennsylvania, Colorado and Michigan; when Maryland, Ohio and Arizona are added the MoM decline totaled 30%.
Screen time
Vision on: Wells Fargo noted the Caesars Sportsbook app featured a live stream of NFL SNF in gameweek one, an “incremental development in the OSB/media ecosystem”, the team suggested. Caesars is one of four operators with agreements in place with the NFL and its data and streaming partner Genius Sports.
These include Caesars, FanDuel, Fanatics and one other “smaller operator” (not named).
Strings attached: The analysts said their understanding is that the available streams are for nationally broadcast NFL games not blacked out in local markets.
The streaming is also limited to the apps (i.e. on either a mobile phone or tablet, w/o functionality to cast to a TV screen).
Wells Fargo added that they can envision more operators including NFL streaming over time and they didn’t believe the costs/product development lift are “overly burdensome”.
Winner, winner, TV dinner: “Embedding live NFL games and betting on a single screen without any noticeable latency issues is a marquee development in the sports-betting/media ecosystem and, over time, could potentially play a role in negotiations for sports media rights,” the team concluded.
NFL hold catalyst
Any given Sunday: One narrative for this season will be the extent to which the rest of the field catch up with FanDuel when it comes to hold percentage, suggested the analysts at Macquarie, who said DraftKings is “in a position to challenge… on any given week”, which should narrow the gap between the top two even further.
Note, last week DraftKings CFO Jason Park said this year was about “getting out ahead of FanDuel and creating some distance”.
The Macquarie team added, though, that “perhaps the biggest upside” could come from BetMGM, Caesars, Penn and RSI, which all have “more runway” to get to FanDuel’s levels of hold.
Market hold rates for July and August were at ~10% but the Macquarie team noted that, with activity set to rise ~70% sequentially in September, “much is still to be determined”. They believed the popularity of same-game parlays “places somewhat of a floor on hold rates”.
But they cautioned there was a very high hold in Sep22 due to favorable game outcomes.
“An expectation for sequential revenue growth again this year in Q3 may disappoint,” they added.
Further reading: “The 2023 NFL season will begin with 10 players suspended for sports gambling and will end with a Super Bowl played in close proximity to more than 60 legalized Las Vegas sportsbooks,” says the NY Post.
Datalines – New York
👀Apple scruffs: DraftKings posted a loss of $3.4m in the first week of September on handle of $116m vs. FanDuel’s positive GGR of $7.3m on handle of $122m. BetMGM and Caesars also managed small positives for the week of $1.7m and $1.5m respectively.
The handle data for August shows that DraftKings, with $447m, overtook FanDuel, at $409m, for the second time this year.
However, the positions were reversed in GGR terms, with FanDuel notching up $42m (a slight MoM rise) while DraftKings slipped MoM by 14% to $35.5m.
🍎 Top 4 New York GGR market shares Aug22 vs. Aug23
Collective effort
Jefferies analysts report back on a fireside chat with Better Collective CEO Jesper Søgaard.
Buy, build, rinse, repeat: The betting and gaming affiliate giant has completed 32 acquisitions in its listed lifetime and, according to the team at Jefferies, management at the business has no intention of stopping its M&A spree any time soon.
Jefferies noted that Better Collective focuses on targets that it can translate into revenue share and pointed out the company has “executed its transactions productively”.
The strategy has paid off, with the company achieving a CAGR of 33% while maintaining a low leverage.
In media res: Jefferies said Better Collective has proved adept at acquiring media assets and then taking the user base from the various platforms and delivering them to its sports-betting operator clients.
Adding in media partnerships, Jefferies reported that Better Collective’s reach nearly doubles from 170m sports fans to 300m+.
Analyst takes
Macau: The mass market has seen some subtle changes in the recovery seen to date, some of which could yet have a lasting impact on the market, suggested the team at Deutsche Bank. They believed the underlying trends are healthy, with spend per visitor well above 2019 levels and mass drop shares implying “likely upward momentum”.
On the negative side, though, the team said promo trends have also moved higher. Though normalizing, the figures “imply a more competitive mass market promotional environment has not evolved to date”.
Light & Wonder: Despite investor skepticism, analysts reported that the gaming supply giant continues to insist it will hit its target of $1.4bn of adj. EBITDA by 2025. Management held a series of meetings last week after which Jefferies said the “necessary growth drivers… do not appear to be heroic.”
Instead, they require “solid execution”.
On the SciPlay deal, the team at Truist reported management as believing the transaction would “clean up the company’s story, leading to a cleaner board structure and streamlined costs”.
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Startup focus – BetChill
The Stockholm-based sports-betting platform provider has big ideas.
Who are you? B2B sports-betting Stockholm-based platform provider BetChill was formed in 2015 by a bunch of online gaming luminaries including Etibar Namazov, Andrew Naudi, Edward Mifsud and Michael Schembri Parnis.
Funding backgrounder: The company has been entirely financed by Namazov but is currently seeking its first round of outside investment to “fuel its growth and expansion”. It is hoping to raise up to €1.7m.
“We believe that our offer represents a strong opportunity for investors to get in on the ground floor of a company with significant growth potential in the dynamic world of online sports betting,” Namazov trumpets.
What’s the game? He says players have the opportunity to bet on the team they think will generate the most points during a football match. “The game features a constantly moving graph that rises and falls in real-time, similar to stock trading,” he adds.
Points are generated in real-time based on the team’s performance on the field, and every action has the potential to impact the outcome of the game and your bet, keeping players on the edge of their seats.
“Whether players choose to cash out at any time or let the bet end automatically at the end of the event, they will be sure to have a thrilling and unpredictable gaming experience,” Namazov says.
“Our platform will introduce unique game mechanics, real-time elements and graph-driven experiences that create a dynamic and unpredictable betting environment.”
What will success look like? In the medium- and long-term, Namazov says he envisions becoming a prominent player in the global sports-betting B2B platform space. They seek strong growth, profitability and expansion into new regulated markets.
Growth company news
Konquers all: The iCasino games startup Konquer, founded by two former DraftKings execs, has completed two significant deals in the past fortnight. At the end of August it announced a multi-year deal with ODDSworks and it followed up last week with a licensing agreement with Galaxy Gaming.
The Los Angeles-based company was founded by Ashford Kneitel, CEO, and Aditya Singh, CTO.
Coming soon: Konquer will be the subject of an upcoming Startup focus.
Mojo working: The player trading startup Mojo has announced a new fantasy product that it hopes to use to expand its offering outside of its launch state of New Jersey.
Hot takes: A social platform and sports experience app called Takes has launched a beta offering and announced details of a recent $1.6m pre-seed raise from multiple investors, including Riccardo Silva, co-owner of AC Milan and Miami FC, and Carlo Pozzali, co-founder of MP & Silva.
Hub spot: The Florida-based startup DFS Hub has launched an online tool using data analysis to offer casual players a better chance against highly experienced DFS users.
Startup career paths: Triggy co-founder Stefan Thunberg will succeed Martina Åkerlund as CEO. On LinkedIn the company said it would be moving into new business verticals and would “continue to scale”. Åkerlund, who has been with the company for three years, will remain on Triggy’s board.
Further listening: Why there will never be another 200m subscriber app, via the More or Less pod.
Career paths
The big move: Flutter Entertainment has a new chair as non-executive director John Bryant takes over from outgoing board member Gary McGann. Bryant was formerly the executive chair and CEO of Kellogg Co.
Bryant will be in charge as Flutter attempts to transition – in stages – to a full US listing.
A new career in a new town: Blueprint Gaming has named former Bally’s Corporation executive Nick Wright as its new CCO. Better Collective has appointed ex-YouTube executive Brandon Boone as its VP for communications strategy and public relations in North America. Allwyn has a new global chief people and culture officer, as Naida Buljugic joins from Casino Austria. eSports Entertainment has given Michael Villani the job of CFO on a permanent basis.
Job title of the week: Cameron MacMillan is the new VP of VIP at Underdog Fantasy. MacMillan previously served as an advisor to Better Collective.
Newslines
Bally’s temporary Chicago casino took its first legal wagers from the public on Saturday.
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