Jan 19: BetMGM CEO: market getting smarter

BetMGM FY21 update, Full House Q4 preliminary results, Esports Technologies earnings guidance, Michigan Dec21, NeoGames/Aspire reaction.

Earnings+More

Jan 19, 2022

Good afternoon. Today the line-up reads:

BetMGM predicts revenues for this year of $1.3bn and EBITDA positive by 2023.
Full House Resorts preliminary Q4 numbers
The latest data from Michigan.

Can you get to that? Click below.

BetMGM FY21 update

The top line

Net revenue of $850m, ahead of company expectations and EBITDA losses expected at between $420m-$440m.
FY22 net revenue now forecast at $1.3bn.
Expected to be EBITDA positive by 2023, ahead of investor expectations.
Illinois and Louisiana launches expected Q1.
Investment into business by JV partners in 2022 at $450m bringing total investment to $1.1bn since 2018.

For us, the sky is just what we stand on: The standout for BetMGM has been the growth in igaming, CEO Adam Greenblatt said all the current live states “continued to surprise on the upside”. The company said it achieved 30% market share across all igaming states where it is active in the three months to Nov21. Note, in Michigan in Dec21 it achieved nearly 38% (see below).

Manhattan transfer: On the New York launch this past Monday, Greenblatt said the company was “delighted with how it’s gone”.

“We’ve broken all of our records,” Greenblatt added. “It was the best first day of any live launch. What I found particularly pleasing was our technology performed flawlessly and our acquisition funnel KPIs were very pleasing.”

A beautiful mind: Greenblatt noted that in terms of profitability, New Jersey was contribution positive for 2021 and Michigan had turned contribution positive halfway through last year with, across the business, “many months of positive EBITDA ahead of 2023”. Addressing the worries being expressed by investors over profitability across the market, Greenblatt suggested that “ultimately capital is rational and capital in this market is getting smarter”.

Mystery train: As for further legislative moves, while noting there was the potential for limited progress in igaming - he name-checked Indiana in particular - Greenblatt said the “sports-betting train is doing its thing”. On igaming, he noted that with the historical opposition of land-based casinos fading away, “the win is turning” for more states to look at regulation.

Instant analyst reaction: “Today’s update not only suggests MGM has an actionable plan, but also clearly defines a path to profitability,” said the team at Credit Suisse. “We think this clarity around profitability timing is both unexpected and ahead of expectations, and directly eats away at the bear case.”

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Full House Q4 preliminaries

The top line

Revenues predicted at between $43m-$43.5m with adj, EBITDA of between $7.3m-$8.5m.
FY revenue highest for eight years at between $179.9m-$180.4m. FY adj, EBITDA at between $46.6m-$47.8m.

Placeholder: Full House accompanied its early preliminary results with the announcement of the details of the $100m ‘The Temporary by American Place’ facility in Illinois. The facility will be funded by new debt. Full House also announced an increase in its investment in the Chamonix Casino Hotel under construction in Cripple Creek to $250m.

Esports Tech 2022 forecast

Projected revenues from December last year to September 2022 are forecast at $70m and will come from the recently acquired casino gaming brands bought from Aspire Global including Karamba and Dansk777. Aaron Speach, CEO, said the business will deliver “consistent cash flow” for the remainder of the year by growing esports revenues alongside the revenues from its traditional online gaming and sports-betting brands.

AGS Q421 select numbers

Take that to the bank: Ahead of a refinancing of its long-term debt, gaming machine provider AGS has released preliminary Q4 figures showing expected revenues of $68.4m-70.8m and adj. EBITDA of between $30.7m-$32.8m. The top range rises of up to 51% and 54% have encouraged AGS to seek ways of refinancing its revolving and term loan credit facilities on better terms and extending its debt maturities. The company is also looking at using the $50m of cash on the balance sheet as of year-end in connection with the refinancing.

Michigan Dec21

It’s a lock: Analysts at EKG noted that the top three sports-betting brands (FanDuel, DraftKings and BetMGM) took 76% of GGR of $35.9m with the second tier of Barstool (7.6%) and Caesars (7.5) trailing and then a third tier of eight brands all at or near 1%. However, they pointed out that FanDuel’s market share was slipping, down to 27.7% from 33.9% in Nov21.

Crashing the party: BetMGM appears to be the key beneficiary of the FanDuel market share slippage. In sports betting it held on to 27% of GGR, second overall behind FanDuel with 27.7% and ahead of DraftKings with 21.1%. In icasino, though, it was out ahead at 37.9%.

Off the charts: EKG also noted that igaming had a “remarkable year” with $1.09m of GGR despite a shortened January and “capped” by a record month in December.

“Colder weather, plus a busy sports calendar… undoubtedly helped lift December’s results,” the EKG team added. “We saw the same trend in New Jersey (where) December 2021 online casino GGR also hit best-ever territory.”

Promo wars: Deutsche Bank pointed out that promotional spend was up to 4.9% of handle and nearly doubled MoM to make up a record 68.5% of mobile GGR. EKG said FanDuel had lowered its promotional spend during the month, while DraftKings and Caesars had increased theirs, with Caesars online GGR share rising for the fourth consecutive month to 7.5%, its highest ever.

Massachusetts Dec21: Gaming GGR rose 15% vs. 2019 and 8.9% MoM to $95.7m. December included nine weekend days vs. 2019 and 2020. Wynn Encore GGR was up 15.6% to $62.4m vs. 2019 and +13.1% MoM. Penn National’s Plainridge Park GGR was up 8.3% vs.2019 +0.7 MoM to $11m .

UK crypto ads update

Raising understanding: The UK government has announced plans to legislate what it called “misleading crypto asset promotions”, bringing them into line with other financial advertising to ensure “they are fair and clear”. According to the government, research suggests that understanding of what crypto actually is is declining “suggesting that some users may not fully understand what they are buying”.

Newslines

Bored ape: Kindred’s Relax Gaming has agreed a new partnership with GAN to distribute Silverback Gaming’s content across its silver bullet platform. GAN acquired the Bulgarian-based slot developer in December.

Bee here now: Gambling.com has announced a media partnership with the McClatchy Company that will see the publisher of the Miami Herald, Fort Worth Star-Telegram and Sacramento Bee among many others leverage the affiliate’s betting content. The shares shot up 7% in pre-market activity yesterday.

On the nod: IGT has completed the final stages of Nevada regulatory approval for its cashless gaming wallet product. The supplier’s entire cash gaming solution has now been approved for full deployment.

For whom the bell toils: Chris Bell, former CEO at Ladbrokes, has resigned two board positions at Rank and XLMedia following his appointment as non-exec chairman at Nueva Codere.

Broad spectrum: Genius Sports has expanded its data supply contract with bet365 to include live streaming and data from the NFL and MLB and several global soccer leagues, including the English Premier League. The news didn't help the share price which fell nearly 5% to an all-time low yesterday.

It’s a deal: Playtech has extended its partnership with the production company Banijay for the rights to use the Million Dollar Drop brand for its online casino products and retained the rights for Deal or No Deal Bingo for another five years.

Always on: PointsBet has said it is the first U.S. sports betting operator to offer “live, in-game betting opportunities with zero suspensions across the core markets of spread and moneyline”. The group said it tested the technology during Saturday’s NFL Wildcard Playoff game between the Las Vegas Raiders and Cincinnati Bengals. The new system was developed by Banach Technology, a provider of pre-match and live betting products and trading services acquired by Pointsbet in March 2021.