Mar 30: Nothing compares 2 US, says Sportradar

Sportradar Q4, Boyd Gaming, Gaming Realms and IGT analyst notes +More

Earnings+More

Mar 30, 2022

Good afternoon. Welcome to today’s newsletter.

Sportradar exceeds Q4 guidance

Deutsche Bank assesses Boyd Gaming’s deal for Pala Interactive.

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Sportradar Q4

Q4 revenue up 41% to €152.4m ($172.2m) and adj. EBITDA rose 14% to €21.4m ($24.2m).
FY21 revenue up 39% to €561.2m ($632.4m) while FY adj. EBITDA was up 33% to €102m ($115.3m).
Q4 US revenue up 92% to €23.2m ($26.2m).

Landmark: The full-year figures comfortably exceeded guidance (range €553m-€555m) helped by a doubling of yearly revenue from the US. CEO Carsten Koerl said Sportradar is seeing the benefit of its “early investment” in the “explosive” sports-betting opportunity.

Carsten Koerl: “What we see already is we are getting operational leverage. We are decreasing our losses as the market doubles on a revenue basis. That’s great. That doesn't compare to any market in Europe.”

Ontario: Koerl said Sportradar had received licensing. “We’re bullish,” he added.

Props: Koerl noted that the focus of US sports consumers on individual players would bring some “very interesting differences and benefits” which, he noted, “play to Sportradar’s strengths”.

Looking at potential convergence between media and betting, he added “I think we will see a new format of interactive betting combining player-related data with the audio-visual experience”.

Carsten Koerl: “We believe placing bets will be as much a part of the social fabric as watching a game itself.”

Russia/Ukraine warning: Koerl said the company was monitoring developments with regard to the war in Ukraine. In terms of potential disruption, he noted that should the company have to exit the Russian market, it would mean forecast EBITDA for 2022 would fall from between €123-€133m to “no less than” €110m.

Carsten Koerl: “We see no impact as of now, but we (the €110m) would be a worst-case scenario, if we had to stop our business immediately.”

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Boyd Gaming analyst update

Connect the dots: The team at Deutsche Bank suggested the $170m deal for Pala Interactive doesn’t indicate a new strategic direction but gives Boyd greater scope in icasino as and when there is further legislative momentum.

Boyd is “likely to take a patient approach” and will use the Pala PAM and casino and poker platforms to “deliver customers profitably” from its B Connected loyalty program.

No loss: They note that Boyd has no tolerance for loss-making. “Net-net, to the extent the transaction doesn't influence Boyd’s capital return strategy or hamper the focus on the efficiency of the core business, we see the transaction as largely complementary to the longer-term potential opportunity set.”

Talking point: The move by a relatively minor icasino player to own its own tech poses some interesting questions for other PAM suppliers such as GAN and White Hat Gaming.

Save the date…

Gaming Realms analyst update

Profitable realm: The UK-listed games provider has announced it has gone live with Loto-Quebec with a range of Slingo-branded scratch cards. Analysts at Peel Hunt point out the company also has a license in Ontario.

“Operators are taking Slingo into new markets and growing Gaming Realm’s revenue,” they add. They suggest “material profitability (is) just over the horizon”.

Pinchpoint launch

The Department of Trust, a former subject of our Startup Focus feature, has launched a new fortnightly newsletter called the Pinchpoint which will discuss aspects of the debate around how the cost-of-living crisis will affect UK gambling and the debate around affordability measures.

Sign up below.

IGT analyst update

Fun-da-men-tal: Further to meeting management, the team at Credit Suisse said they “sounded strong on the fundamentals of the business” and implied raised guidance for 2022 to $4.1-$4.3bn and operating margins of 20-22%.

CS however estimates that “there are ~$110m of incremental headwinds relative to when the guidance was originally provided in November (FX, Omicron, supply chain, sale of the LISPAY business)”.

Don’t let me be misunderstood: The guidance maintenance since Nov21’s IGT investor day “implies that the core business is performing ahead of original expectations”, added CS.

“We don’t think this is well understood. Further, we think the FY guide could prove to be conservative (as Omicron eases).”

Newslines

Down by the river: Rush Street Interactive has appointed Bruce Caughill as managing director, Canada. The group’s BetRivers brand is set to go live in Ontario on Monday.

Check raise: AGCO has issued a new mandate for Ontario’s new online gambling licensees, the Responsible Gambling Council's RG Check Accreditation Programme. The program is already required at land-based gambling venues in the province.

In the loop: Fubo Gaming has canceled its rental contract for office space in downtown Chicago. The group was due to lease out workspace in the Loop area of the Windy City and go on a hiring spree as COVID restrictions drop.

B2B hub: Pinnacle has obtained a license for its B2B business in the European gaming hub of Malta. The regulatory move by the group is aimed at developing its Pinnacle Solution B2B activities to “unlock partnerships in a number of new territories, with particular focus across Europe and Latin America”.

What we’re reading

Order! Hansard’s transcript of the gambling-related harm debate in the House of Commons from yesterday.

On garda: Irish police warn on match-fixing.

Rotten to the core: Australian public enquiry hears of Star Casino malpractice.

"But it's extraordinary that Star is providing false letters to a bank is it not?" Naomi Sharp SC asked Mr Whytcross. "
Yes it's concerning," he said.
Ms Sharp went on: "It's extremely concerning from an anti-money laundering and counter-terrorism perspective isn't it?"
"Yes it is," Mr Whytcross answered.