It’s complicated
The story at Bally’s isn't getting any simpler
Analysts complain about lack of focus as M&A masks earnings miss.
In +More: DraftKings’ Railbird files first sport prediction market contracts.
Hedge funds rake in over $2.3bn, but Dart buys further into the Flutter story.
Venture playground: iBankroll’s Tilt, Prelude raise, First Pitch line up revealed.
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Tangled
Chill out, whatcha yellin’ for? Bally’s Corporation’s equity story has rarely been more tangled following a Q1 earnings statement that missed EBITDAR consensus by 14%, with weakness spread across every reporting segment.
Revenue of $756m did grow 28% YoY but that was driven by the addition of Casino Queen and Intralot (now Bally’s Intralot).
Strip out the M&A and the underlying picture darkens considerably.
Lay back, it’s all been done before: The Casinos & Resorts business was the most disappointing, according to the team at Stifel, who said it recorded “the ninth segment miss in the past 11 quarters” and attributed the poor performance to a “dilution of strategic focus.”
The team noted that Bally’s attempted the integration of Casino Queen and Intralot alongside turnaround efforts at the Star in Australia (where Bally’s now has a stake) and casino-resort development efforts in Chicago, NYC and Las Vegas.
New competitive supply in Shreveport and Dover offset the ramp-up at the converted boat-to-land properties in Baton Rouge and Marquette.
And if you could only let it be you will see: The Intralot deal, only one quarter into life as a combined entity, is already showing the strain. UK iCasino revenue grew 10.5% on a constant-currency basis as smaller competitors pulled back promotional spend ahead of the April 1 tax hike.
This is encouraging, but B2C margins compressed 300bps QoQ on higher compensation and content/platform costs.
Stifel warned that Street estimates remain “anchored to mitigation targets that we view as ambitious.”
They added that “sequential margin contraction is unexpected and adds further downside risk.”
I like you the way you are: Bally’s Intralot confirmed its preliminary Q1 earnings this morning, showing revenues of €268m and adj. EBITDA of €100m, with the newly consolidated Bally’s International Interactive business contributing €184m to revenue and €72.7m to adj. EBITDA.
The company will conduct its Q1 earnings call once the Athens stock market closes later today when it will give more details on the progress of the UK business, which it said saw an 11.5% revenue in April, the first month of the new 40% RGD tax regime.
Robeson Reeves, CEO, said about the Evoke discussions that the company would be able to “provide more color in the next few days.”
The company previously sought an extension on the talks until June 8.
Dressed up like you’re somethin’ else: Back with Bally’s Corporation, Macquarie was more constructive, noting “expectations for lower future marketing spend while also grabbing market share from smaller players.”
North America Interactive grew revenue, easily outpacing market GGR, but slipped back to a $7m EBITDA loss after briefly hitting profitability in Q4.
Stifel conceded the optics were “challenging” but stayed “cautiously optimistic that Bally’s is maintaining return discipline for incremental spend.”
Why’d you have to go and make things so complicated? Then there is the project pipeline. Chicago topped out in April and is now guided to early 2027. Stifel still expects the spend to come in around $2bn against a $1.7bn budget. The $4bn Bronx casino reached a milestone with the $500m New York license fee and $115m golf course payment now completed.
It takes the all-in spend to roughly $750m before construction even starts this summer.
In Las Vegas, however, the project remains stalled with, in the words of the analysts at Citizens, “no movement in construction nearly two years after the demolition of the old site.”
And you take what you get: Unsurprisingly, with such a crowded to-do list, the focus very much remains on a stretched balance sheet. Citizens puts lease-adjusted leverage at 7.5x for 2025, easing only modestly to an estimated 7.2x in 2026 and 6.4x by 2027.
They forecast free cash flow not turning positive until 2027.
Macquarie noted that the upcoming projects “still need to be largely financed (loan, sale-leaseback, etc)” and Stifel pointed to “well north of $5bn planned spend still left.”
Citizens added that lease-adjusted leverage would “remain elevated whether Las Vegas happens or not over the course of the next several years, with limited assets left to do a sale-leaseback if needed for funding.”
Promise me, I’m never gonna find you fake it: Bally’s chair Soo Kim has a track record of finding the money – Citizens credited him with “his ability to find funding for projects and initiatives” – but the runway is narrowing.
In cutting its price target, Macquarie summarized that Bally’s “continues to be very nimble in terms of portfolio construction, but with several major growth initiatives going, the future earnings power of the company remains clouded for the time being.”
Citizens stayed neutral, citing “moving pieces, project openings and the cadence around the digital build-out, along with ongoing cost-saving initiatives and a lack of guidance.”
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+More
Wax on the tracks: DraftKings-owned Railbird Exchange has reportedly filed its first sports prediction market contracts ahead of a planned May 27 listing date. The filings include winner, spread, prop, stat, achievement and head-to-head markets across major sports and also suggested a yet-to-be-unveiled brand name, DKeX.
Earnings debrief
Build a moat: Kambi’s Q1 numbers told the story of operating leverage starting to show through – one that investors warmed to. Speaking to E+M, CEO Werner Becher said that, strategically, with its turnkey and modular offering and now with added AI advances, the supplier is at the forefront of a changing landscape.
See yesterday’s Earnings Debrief edition (PRO subscribers only).
The big short
Shake your money maker: Short-selling hedge funds have cashed in to the tune of $2.3bn from the falls in the year-to-date of the major online operators Flutter Entertainment and DraftKings, according to a report from data provider S3 Partners.
Flutter is down over 57% YTD having shipped over $17bn of market cap, while DraftKings is off by over 31%, losing ~$5bn of value.
Easy pickings: Both companies have been laid low by the rise of prediction markets and the indications that even in OSB states there is an albeit low single-digit element of cannibalization taking place.
In a wilder sense, however, the rise of prediction markets hurts the previous story about the inexorable expansion of regulated OSB.
The sudden emergence of an alternative form of sports-event wagering, particularly in currently non-OSB states, puts a dent in the story of the inevitability of regulated OSB.
Race to the bottom: Flutter and DraftKings YTD
Making off like bandits: As reported by the FT, the S3 Partners report estimates that hedge fund short sellers have made paper profits of $2bn from their bets against Flutter, $350m from DraftKings and a further $35m from betting against Entain.
The UK-listed firm is down over 30% YTD and is now valued at £3.44bn.
The FT made the point that a number of hedge funds have appeared on the shareholder register at Flutter, including DE Shaw and Two Sigma Investments, which have both built up ~2% short positions.
The paper added that other funds that have taken short positions against Flutter so far this year include AQR Capital Management, Marshall Wace and Balyasny Asset Management.
Meanwhile, Marshall Wace (again), Millennium International Management and Capital Fund Management have all been involved in shorting Entain.
Poison arrow: In related share-buying activity, billionaire investor Kenneth Dart has in the past few days upped his stake in Flutter to over 27.5% after a spate of equity-based swaps deals via a Cayman Islands-domiciled entity.
Separately, it has been reported that funds controlled by Canadian investment bank CIBC now control 5.3% of Flutter’s shares.
CIBC did not previously appear on the Flutter shareholder list.
All apologies: Flutter CEO Peter Jackson has not directly addressed the issue of the company’s tumbling valuation although, speaking at a JP Morgan investor event post the recent Q1 earnings, he did admit that FanDuel had entered 2026 a “smaller business” than it should have been.
DraftKings, similarly, didn’t answer any direct questions about its falling share price but like Flutter has a share buyback facility in place.
In Q1, DraftKings bought back $100m of shares as part of its $2bn buyback authorization.
Flutter, meanwhile, initiated a $250m buyback in early March as part of its ongoing $5bn authorization, which is valid until 2027.
Octoplay has launched in Georgia through a strategic partnership with Adjarabet, the country’s leading operator. 🇬🇪
Venture playground
Funding news
iBankroll
Leaning in: iBankroll has announced Monkey Tilt is its latest Bankroll-as-a-Service (BaaS) partner, allowing the operator to offer $1m per-round blackjack and $6m maximum win on slots without the need for holding reserve capital.
Back in November 2024, Monkey Tilt raised $30m in a Series A funding round led by Pantera Capital and with the participation of Polychain Capital, PokerGo, Hack VC, Dream Ventures, Accomplice, Mirana and Josh Hannah from Augmentum.
It is led by Las Vegas-based CEO and co-founder Sam Kiki, who said the deal frees up capital for growth.
Speaking to E+M in October last year, Hayden Bowman, co-founder of iBankroll, said the BaaS offering was designed to “smooth variance and manage exposure within agreed parameters, enabling operators to settle on expected margin.
Prelude
Just the start: FDJ United’s VC arm is among the backers of Paris-based startup ID verification and fraud prevention provider Prelude, which has raised $20m in a Series A funding round.
FDJ United Ventures participated alongside lead funder 20VC, along with Singular, Seedcamp and Deel.
The Paris-based company said the funding will be used to expand its telecom partnerships, broaden API coverage across Europe and invest further in machine learning-driven fraud detection capabilities.
Founded in 2023 by former Zenly employees Matias Berny and Quentin Le Bras, Prelude’s infrastructure is designed to help digital platforms authenticate users through phone verification, device intelligence and behavioral data.
The company positions itself as a “trust layer” for the AI-driven internet, where bots and fraudulent accounts are becoming increasingly sophisticated.
First Pitch line-up
Five go to Florida: Five startups have been selected to take part in the First Pitch competition at SBC’s upcoming Summit Americas event in Fort Lauderdale. They include:
Insight Play AI, which deploys AI agents as customer service representatives for operators, providing both text and voice support.
Odditt, a platform that helps sportsbooks, prediction markets and DFS operators offer ready-made combo and parlay bets.
OddsBlaze, a real-time sports-betting data platform that gives operators, traders and product teams fast access to odds, market movements and betting APIs.
ParlayX, a prediction market aggregator designed to help sports-betting syndicates compare opportunities and act on market insights more efficiently.
The Sharps, a bankroll tournament platform that combines the strategy and competitive structure of poker with sports handicapping.
Growth company news
DeGaming has launched a blockchain-native gaming platform focused on improving transparency and trust across the online gambling sector. Central to the offering is its proprietary Glass Vault technology, which provides real-time proof of funds and independently verifiable visibility into balances, transactions and payouts. The platform also offers Bankroll-as-a-Service. Former RAW iGaming, Videoslots and NetEnt executive Ulle Skottling has been appointed CEO to lead the company’s commercial expansion.
Upcoming earnings
May 27: Bally’s Intralot
May 28: Genius Sports Earnings Debrief
Jun 2: High Roller Earnings Debrief
Jun 4: Allwyn
Jun 5: Meridian Earnings Debrief
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