Mar 24: Playtech extols Hispanic opportunity
Playtech FY, Zeal FY, Better Collective M&A +More
Good morning. In today’s edition:
Playtech produces possibly its last results as a public company.
There is life in German lottery for Zeal.
Affiliate Better Collective joins the Canadian betting fray.
Fare thee well, Miss Carousel. Click below:
Playtech FY
Revenue of €1.2bn up 12%, adj. EBITDA rising 25% to €317.1m.
B2B revenues up 11% to €554.3m; B2C up 11.3% to €993.7m.
Discussions with the TTB consortium (including CEO Mor Weizer) continue.
Likewise, the possible Caliente transaction is still being explored.
StandWithUkraine: With 700 people in the country, Mor Weizer began the earnings call by pointing to the efforts being made by the company and its employees to support its Ukrainian workforce, including relocation efforts either to safer areas of the country or elsewhere. He noted there is no critical B2B infrastructure within the country.
Mor Weizer: “The safety of our employees is the overriding concern.”
Latin rhythm: The increase in B2B revenues was driven by 64% growth to €101.3m in the Americas segment which includes the strategic partnerships with Caliente in Mexico and W Play in Columbia. Late last year it signed a strategic deal with Galerabet in Brazil.
Noting the potential for the Caliente deal, Playtech said the value of the call option on the Playtech balance sheet stood at €622m. Weizer noted Caliente was now PlayTech's number one B2B customer.
Northern skies: In terms of the US, Playtech recently launched with Parx Casino in Pennsylvania, New Jersey and Michigan and has opened two new live casino facilities in the latter two states. The company also signed an agreement earlier this year with NorthStar Gaming for Canada.
Mor Weizer: “I strongly believe we will be accelerating in the US. (Clients) want to extend and give their customers a broader offering.”
Calexico: On the potential for the Caliente/CaliPlay move into the Spanish-speaking market in the US, Weizer noted the Hispanic population in the US was over 60m. “The GDP of Hispanic speakers in the US is bigger than Mexico,” he added.
Italian renaissance: Noting the differing fortunes of the online versus the land-based businesses in Italy, Weizer said it was “becoming a truly online-led business.”
Andy Smith, CFO: “It’s flying at the moment. The numbers are so good.”
Datapoint: Weizer said live casino revenues came in at over €100m in 2021, achieving 35% EBITDA margin. Table capacity rose to 250 in Jan22 from 135 in Jan19.
Elephant in the room: CEO Mor Weizer spoke about an “eventful year” for Playtech which includes, of course, his joining with former CEO Tom Hall and the Hong Kong-based investor TTB in a potential bid for the company to take it private.
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Zeal Q4 and FY21
Billings up 1% to €656.5m, revenues and gross margins stable at €86.8m and 12.2% respectively.
Adj. EBITDA rose to € 27.7m vs. €12.7m FY20 thanks to lower marketing expenses (€22.4m vs €32.2m in 2020) caused by low jackpots.
Freedom pass: The group said the launch of its ‘freiheit+’ charity lottery has been very successful and full ownership of the product meant “it comes with higher margins than a normal brokerage business where we would get commissions from state lotteries,” CFO Jona Mattson said.
The group also signed a partnership for instant-win games with LOTTO Hessen. “It’s a small first deal but hopefully we will get other states interested in similar deals,” added Mattson.
Material appetite: The team at Peel Hunt said the low jackpots meant low revenues, but adj. EBITDA more than doubled and with guidance implying a “forward EBITDA multiple of 32x”, it showed “material investor appetite for exposure to the German market”.
Earnings in brief
OPAP FY21: GGR up 36.2% to €1.53bn, NGR up 41.6% to €1.04bn, EBITDA up 111.1% to €550.3m driven by post-COVID recovery and the reopening of the group’ retail operations. Leading Greek online betting and gaming brand Stoiximan was fully integrated at the end of 2020 and generated around €430m in additional GGR.
Better Collective M&A
Acquires Canada Sports Betting for up to €21.4m, €15.9m upfront.
Expects the business to generate €5m in FY22.
Forecast improvement: Better Collective said the acquisition in Canada would give the company a “strong foothold’ in the market ahead of the opening of Ontario on April 4. Allied to a “generally strong performance” in the first quarter, the extra revenues from Canada mean Better Collective has upped its EBITDA forecast for 2022 by €5m to €80m.
Further Canada news: Provincially-licensed online gambling brands can now advertise on Google in Canada, per a change in Google policy. Canadian Gaming Association President and CEO Paul Burns highlighted the updated Google rules on LinkedIn.
CBRE sports-betting update
Cut too deep: Looking at the recent performance of leading sports-betting-related stocks, the analysts at CBRE suggest that despite suffering from the wider risk-off market stresses, the sell-off has gone too far.
Decoupling: They note that investors need to separate global fears over inflation and rising interest rates from the still present growth story for the “entirely new sector” of sports-betting and gaming.
CBRE: "Global gaming companies should trade at a premium given their ability to, one, self-fund growth without significant opportunity cost; two, operate at scale resulting in higher margins and ROI; and three, benefit from omni-channel synergies related to marketing and cross-selling."
Boyd analyst update
Boy oh Boyd: After meeting with management, the analysts at Truist report the company is yet to see any impact of rising inflation and gas prices, though the longer the trends continue, the “more likely some negative impact will be seen”. While 2022 trends “look strong”, the Mar-May comparison will be tough.
What we’re writing
On Wagers.com: FOX’s limited sports-betting choices.
‘For all the talk on the earnings call, FOX Corp.’s choices seem limited. Either limit its ambitions to hanging on to a chunk of a listed FanDuel vehicle while raking in money from the rest of the sector via ad sales; or make one of the biggest gambles the Murdoch family has ever made on attempting to crack the top four in a hugely competitive market where others have huge structural advantages.’
Newslines
Wrist slap: The New Jersey DGE has fined BetMGM $25,000 for accepting two bets involving in-state college teams and events in 2021. The bets came in on a game involving New Jersey-based Rutgers University, and a Metro Atlantic Athletic Conference college basketball tournament game.
Now you see me: The Action Network reports that a well-known offshore online sportsbook went offline as of Monday, and isn't responding to customer queries.
Mobile squared: Esports and traditional sports-betting operator Rivalry has announced a range of mobile betting options on mobile games including Mobile Legends: Bang Bang, League of Legends Wild Rift, Call of Duty Mobile.
Just do it: Playtika has acquired JustPlay.LOL, which produces the multiplayer game 1v1.LOL. The acquisition diversifies Paytika’s product range by expanding its offering into the “action and battle royale genres”, according to the group’s statement.
Certified: Aspire Global’s player account management (PAM) and managed services platform has been certified by GLI for the US and Canada markets.
Inspection services: Sportradar will provide its monitoring and sporting integrity services to Sweden’s gambling regulator Spellinspektionen.
What we’re reading
From casino floor to bully pulpit: ESPN on Craig Carton and his role in preaching responsible gambling.
On social
Gimp.
Calendar
Mar 24: Gambling.com Q4
Mar 30: Sportradar Q4
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com