Mar 9: 888 sorry and enjoys record '21

888 FY, Century Casinos, Full House Resorts Q4, Newlines +More

Earnings+More

Mar 09, 2022

Hello, on WE+M today:

888 apologizes for regulatory failings that led to record fine and announces record figures for 2021
Earnings in brief: Century Casinos acquires The Nugget in Reno, Full House has more skins up for grabs.
Newslines +More

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888 FY21

Group revenue up 15% to a record of $980.1m.
Adj. EBITDA up 6% to $165m, Adj. EBITDA margins flat at 17% and -1.5 ppts due to increased US investments.
Regulated markets constant at 74% of group revenues, 17% revenue growth from those markets, expect to reach 80% in 2022.
Balance sheet at +$174.5m but no dividend in 2021.

First, an apology: CEO Itai Pazner kicked off the analyst call by apologizing for the £7.8m fine the group received from the UK Gambling Commission last week.

Itai Pazner on the UKGC fine: “It’s not something we’re proud of, because we do see ourselves as a responsible operator. We completely recognise there were clear issues in our policy that didn’t work properly and we take full responsibility.”

Record breakers: Beyond the failure of its CSR policies and “regulatory headwinds”, Pazner said the group had experienced a record 2021 with its key European markets of UK, Italy and Spain growing 18% “despite marketing restrictions”. Alongside the US, the “growth markets” focus will be on Germany, Netherlands and Ontario.

Pazner on growth markets: “Germany, the Netherlands and Ontario represent a TAM of ~$10bn. We have experience, brand presence, teams and marketing materials, everything that it takes to make them part of our portfolio of growth opportunities.”

“We have launched sports betting in Germany and have applied for a gaming license there, Ontario we have been there since day 1 and we are working to relaunch in the Netherlands in the Summer. They are the most significant global opportunities alongside the US.”

Levelling out: CFO Yariv Dafna would not give guidance on US losses in 2022, but said he expected to see growth from additional state launches and existing Colorado activity. He said it “makes sense” that 2022 would be “peak losses”, but the markets “should not assume there will be a significant drop in 2023, but after that we expect to see a decline”.

Work to do: The group is planning to launch its own brands in the US and said the Sports Illustrated-branded sportsboook would be going live in another three to four states in 2022.

Pazner on further SI integration: “To monetise that we must do a lot of work: integrating content, creating customer flows and leveraging all those great assets that SI has: events, brand partnerships, ticket sales (SI Tickets launched recently) to tighten up integration, reduce CPAs and increase loyalty through the unique experiences that we can offer to SI sportsbook customers.”

What they said

CFO Yariv Dafna on 888’s decision to suspend dividends in 2021: “There is no sense in doing that and then coming back straight away and asking for more money from shareholders to complete the William Hill acquisition. “

Pazner on WSOP launching with GG Poker in Ontario: “The (US) deal with Caesars is ongoing and about to launch in Michigan. Their deal with GG in Ontario is separate, we have an exclusive deal with them in the US, there is nothing to read into that (GG Poker) deal.”

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Earnings in brief

Century Casinos: Q4 net operating revenue was up 27% YoY to $107.3m, adj. EBITDA was up 36% to $24.9m. FY net operating revenue was up 28% to $388.5m, adj. EBITDA was up 102% to $97.9m. Century acquired the Nugget Casino Resort in Reno Sparks, Nevada, for a total price of $195m, which includes 50% of the Nugget Property Company and 100% of the operating company. It expects to close the transaction when it receives its Nevada Gaming license in the next nine to 12 months. The Nugget recorded $33m in EBITDA and $100m in revenues in 2021.

Full House Resorts: Q4 revenues of $43.2m vs. $13.3m in Q420, adj.EBITDA of $7.9m vs. $9.8m. FY21 revenues of $90.6m vs. $62.5m, adj.EBITDA rose to $47.2m from $19.7m in FY20. The group expects to complete the construction of Chamonix Casino Hotel Cripple Creek, Colorado by Q223 and said it had received much interest in the sports betting skin in that will be available at the Waukegan, Illinois casino that it is due to open this Summer. The group added that it will have one OSB skin available in Indiana and Colorado from May onwards due to Churchill Downs’ decision to exit the market.

Newslines

Mack the knife: Genius Sports has signed an official sports data, engagement and integrity partnership with the Mid-American Conference (MAC), an NCAA Division I Conference that sponsors championships in 24 sports. MAC is the first conference to strike such a deal and will get Genius Sports’ full suite of data collection, tracking, fan engagement and marketing solutions. Genius will be reporting its FY results Friday morning EST.

Another fine in the wall: The UK Gambling commission has fined Sky Betting and Gaming £1.1m for sending promotional emails to customers who had self-excluded or opted out of receiving marketing. The group’s online casino brand Sky Vegas sent a promotional offer to 41,395 self-excluded customers and 249,159 customers who had unsubscribed from marketing emails. UKGC said the “fine would have been a lot higher had Sky Betting and Gaming allowed any of the self-excluded customers to actually gamble”.

Launching Arizona: Betfred has launched its mobile betting app in Arizona. The group has partnered with the We-ko-Pa Casino Resort and is also operational in Colorado, Pennsylvania and Iowa.

Falcon down: The NFL has suspended the Atlanta Falcons wide receiver Calvin Ridley until at least the end of the 2022-23 season for betting on NFL games. Ridley bet on games during a five-day period in November, using Hard Rock’s sportsbook app while it was live in Florida at the time. The sportsbook flagged up the event and notified the NFL. The league found no evidence that inside information was used or that Ridley’s bets affected the integrity of the games.

Bowl opportunities: Sportradar has signed a strategic advisory deal to pursue opportunities in sports betting with the organization behind college football's post-season Bowl games. Part of the deal includes educational efforts about sports betting. The NCAA already has a data deal with Genius Sports, though the official line is that it does not cover distribution to sportsbooks.

North country brag: Ontario has approved Bragg Gaming to provide sports betting technology in the province. The license is one of the first awarded by the Alcohol and Gaming Commission of Ontario in regards to the province's April 4 launch date for legal online sports betting.