Incoming
Robinhood goes big on March Madness offering
CEO Vlad Tenev hails prediction markets as “truth machines.”
In +More: Michigan, Pennsylvania February data.
Caesars appoints Icahn reps to board, talks up digital “strategic options.”
Venture playground: In focus is platform provision newbie Elantil.
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On target
Ain’t no stopping us now: Robinhood has made a definitive move into 50-state prediction markets with a full slate of March Madness NCAA Championship markets less than a month after aborting a similarly high-profile Super Bowl offering.
That first attempt appeared to be halted under advisement from the Commodity Futures Trading Commission.
This time around, Robinhood said it was launching after having been in “close contact” with the financial trading regulator.
Phamming the flames: Industry analyst at Prediction News, Christopher Gerlacher, said it was likely Robinhood and Kalshi have been “pushing for this behind the scenes” at the CTFC, and that acting chair Caroline Pham could be “paving the way” for Trump appointee Brian Quintenz’s tenure too.
“He argued that all events are commodities, so this could be an early decision Pham is implementing before Quintenz is confirmed and moves into the chair role,” he added.
You Vlad me at hello: The financial trading operator’s CEO Vlad Tenev tipped his hat in the direction of the ideological arguments that have surrounded prediction markets since the presidential election, when he said via a posting on X they were “truth machines.”
“At the most fundamental level, they are the application of capitalism to the pursuit of truth,” he argued.
The Robinhood share price rose 7% on the news on Monday but gave up 5% yesterday on renewed Trump tariff fears.
Alongside the March Madness markets, Robinhood has also launched with markets on the moves of the Fed funds rate and Tenev promised more would follow.
“We’re starting with politics, economics and sports, and we will continue to broaden the coverage over time,” he said.
In comparison, another recent prediction market new entrant, Crypto.com, only offers long-term markets on the NBA and three long-term European soccer outcomes.
Get a room: The Robinhood Derivatives offering comes "initially" via a partnership with licensed futures market provider Kalshi, which recently received a cease-and-desist letter from the Nevada Gaming Control Board.
Its CEO Tarek Mansour hailed the deal, saying his company “did it with elections and now we will do it with sports.”
“Together we will change the world of finance and trading,” he added.
Separately, Kalshi yesterday announced a hook up with AI-based search engine provider Perplexity, which will see the integration of betting odds and live game predictions directly into the search engine results.
Shaker maker: Analysts at Morgan Stanley suggested last week that prediction markets might provide the biggest shakeup to the US sports-betting market since the repeal of PASPA and argued that Robinhood could emerge as a major player.
This week the Bank of America team suggested the OSB sector “so far” appears to be taking a wait-and-see approach.
Their read is that the industry “may lean more positive” on prediction markets being complementary rather than trying to litigate against them.
But they admitted state regulators and the tribes “may see them differently.”
Meanwhile, according to a proprietary user survey undertaken on behalf of the analysts at Mizuho, two-thirds of Robinhood users are also OSB consumers and 78% of them said they would use Robinhood for sports betting were it offered.
The BofA note suggested Robinhood has 7.9m monthly users vs. 3.7m at DraftKings and 3.5m at FanDuel.
Bells, whistles to come: The BofA team also cautioned against the argument put forward by the likes of Flutter CEO Peter Jackson that as a single-only product, prediction markets are “vanilla” and “lack the richness” of the full sportsbook experience.
“Product developments could be surprising if prediction markets are allowed to grow unfettered,” the BofA team argued.
Chris Grove from EKG echoed the sentiment. “We may need to re-evaluate what products we assume are possible or viable on an exchange backbone,” he said.
“There’s arguably never been this kind of economic incentive to port high-margin products like SGPs to an exchange.”
Ball in your court: As for the CFTC, all eyes will be on the upcoming prediction markets roundtable, which will be convened by new chair Brian Quintenz either later this month or in April.
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+More
In it to win it: The bids for the main lottery in Italy have been submitted, according to Italian gaming news source AGIMEG, which reported that IGT and Flutter’s Sisal, in conjunction with the Brookfield-owned Scientific Games, are going head-to-head. Jefferies said the regulator would now examine the technical proposals of each bid in a process that could take several months, before bid amounts are revealed publicly.
Michigan: February data showed iCasino up 18% to $223m while OSB GGR rebounded to $46m, a 50% YoY increase, on handle that fell 6% and hold of 12.1%. Promos rose 7% to $19m or 41% of GGR. DB analysts suggested a big jackpot win during the month on DraftKings helped explain its 450 bpts iCasino market share drop to 12.5%.
Pennsylvania: iCasino revenue for February was up 12% YoY to $207m while B&M gaming was down 8% to $257m. Sports-betting GGR fell by 24% YoY to $36.9m while net revenue tumbled by 63% to $10.4m, no doubt due to the Philadelphia Eagles Super Bowl win and not helped by the 31% increase in promos. Hold was down 260 bps to 5.1% due to the Eagles win.
Unlucky for some: Bet365 is now live in Tennessee and Illinois ahead of the start of March Madness, the company’s 12th and 13th states.
Australian horseracing betting services provider BetMakers has renewed its partnership with UK Tote through 2029 to provide its core wagering platform. BetMakers said the deal would generate revenue of at least A$4m ($2.5m) a year.
Icahn do attitude
Icahn do: Activist investor Icahn Enterprises – which became a “sizable” investor in Caesars Entertainment last June – has been granted two seats on the board of the casino giant for its general counsel Jesse Lynn and CFO Ted Papapostolou.
Founder Carl Icahn said he hoped to work with management to “maximise value” for all shareholders.
This includes “exploring strategic alternatives for the company’s underappreciated digital business.”
Spin me right round: One potential alternative discussed by Caesars CEO Tom Reeg on the company’s recent Q4 earnings call (paywall) would be to spin out the digital business, suggesting there were “dollars left on the table.”
Responding to the news, the analysts at Jefferies suggested a prerequisite for any move would be to “establish an EBITDA trajectory.”
They noted the timing of the aspirational target of $500m has “shifted” from 2025.
I come not to bury Caesars: The analysts went on to say that the question is now whether Caesars can “establish a value” for the digital business, given its “formative earnings power,” or whether the unit would be “better served as a separate entity with independent strategies and resources.”
Worth noting are their comments that Icahn has a “past track record” of value capture and the “apparent amicable nature” of his involvement.
Icahn said in the press release he has “great respect” for Reeg.
Quick takes
Penn Entertainment: Investor enquiries are all about the termination option for ESPN Bet, according to the analysts at Stifel, who have moved to reduce their price target on the shares due to the current economic uncertainty. The team believe the best option for Penn would be to terminate the deal in 2026, pivot to iCasino with the Hollywood brand and sell theScore in Ontario.
March Madness: The team at EKG suggested the backdrop of slowing handle growth – see Monday’s ‘The teardown’ for handle trends over the course of the NFL season – will mean regulated handle for the NCAA tournament will be 32% lower than last year at ~$2.62bn. EKG forecasts that 40% of handle during March Madness will come from in-play betting, up 2.5 ppts YoY.
Earnings edit
Inspired Entertainment
Ready for the close up: A digital performance that was the “star of the show” helped push Inspired revenues in Q4, but seemingly at the expense of the virtual sports business, which the management team admitted had suffered due to attention being turned elsewhere.
Now, with the company more clearly turning its attention to what remains of a revenue mainstay, Inspired said a retuned virtual sports business has hit an “inflection” point in the current quarter.
The company also extolled the potential for the product in Brazil where it has already launched with two of the market leaders in Betano and bet365.
As night follows day: Meanwhile, the company also promoted the potential for iCasino to gain a wider regulated footprint in the US, saying it was an “inevitability.”
A full Earnings Extra on Inspired was sent to E+M PRO subscribers yesterday.
In brief
Sharplink Gaming: The gaming affiliate provider saw revenues drop 26% to $3.66m while net losses from continuing operations fell to $4.47m. CEO and chair Rob Phythian said the company remained committed to the strategic move into the affiliate space, pointing to the recent buying of a 10% stake in Armchair Enterprises.
Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.
Venture playground
In focus – Elantil
Who are you? The newly launched Elantil, says founder and CEO Jonathan Gauci, is “not just another iGaming platform – it’s a fundamental rethinking of how an operator’s infrastructure should work.”
“I built Elantil out of frustration,” he says. “I’ve seen first-hand how limited today’s platforms are: they’re slow, inflexible and filled with hidden inefficiencies.”
So, Gauchi put together a team with over 100 years of combined industry experience, and “set out to fix what’s been broken for too long.”
What’s the big idea? “It’s a platform built to remove barriers… that finally puts operators in control,” claims Gauchi. The system has also been created to “adapt to new markets that don’t even exist yet.”
It is built on four key pillars, including an operational management system, a marketplace of plug-and-play tech and platform solutions, a casino and sportsbook builder and a real-time data platform.
KPIs: Elantil went live with its first client “in record time,” says Gauci, and with several more in the pipeline has created a “buzz” and “noticeable industry recognition.”
Growth company news
Kero Gaming has secured its latest partnership deal with the Flutter-owned Serbian sportsbook MaxBet, which will see the two work together on a new watch-and-bet offering to MaxBet customers called FlashBets.
Games aggregator QTech Games has teamed up with Raw iGaming for content provision.
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Upcoming earnings
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Mar 20: Gambling.com, Bragg Gaming
Mar 21: Allwyn
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