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Ohio opens – without Fanatics
BetFanatics fails to launch in Ohio, other Betr makes PointsBet bid, Genesis Global goes belly up, startup focus – Players Lounge +More
Welcome to the first newsletter of the year. On today’s agenda:
BetFanatics not among the Ohio debutants but betr is.
PointsBet confirms Australian Betr talks.
It’s all over for Genesis Global as it files for insolvency.
Call for Svenska Spel sports-betting and online gaming divestment.
Our first startup for this year is Players Lounge.
Ohio opened up to sports betting yesterday with all the big names available but with no sign of BetFanatics.
No show: The much-hyped opening of the Ohio sports-betting market went ahead yesterday with all of the big names going live at the stroke of midnight, including the Jake Paul-fronted micro-betting specialist betr, which made its sports-betting debut in a suitably social media-friendly fashion.
It hopes to be able to leverage Jake Paul’s 21m-plus followers on Instagram. See E+M Startup Month in September, which spoke to betr founder Joey Levy.
Betr has a deal with the Hall of Fame Resort & Entertainment Company for market access.
It has plans to enter Indiana, having gained market access there via a deal with Caesars and the Eastern Band of Cherokee Indians, which is also a major shareholder.
Betr joined the market leaders in offering the usual slew of sign-up bonuses, with FanDuel, DraftKings and BetMGM all offering $200 and Caesars going with a $1,500 deal.
Notably, DraftKings has already been fined $350k by the Ohio Casino Control Commission for sending promotional emails to underage gamblers.
You have to meet Mike: A notable absentee on day one was much-anticipated market entrant Fanatics. But the failure to hit the opening day deadline in Ohio is unlikely to dent confidence at the sports apparel turned betting operator. A late December article in the Washington Post quoted CEO Michael Rubin as suggesting “people say that I’m nuts” for suggesting Fanatics will be No. 1 in sports betting a decade from now.
Rubin believes Fanatics will be able to provide the “greatest cross-loyalty program in sports” by giving away merchandise.
He suggested “every bettor might get a percentage of every bet returned to them, win or lose, to buy merchandise” or anyone at a Lids store might get a free order if they signed up to a gambling account.
“Hey, open up a [betting] account and we’ll give you this order for free,” Rubin told WaPo.
“Market access has been too expensive. I want to be patient. We don’t want to be in a business we can’t make a billion dollars in,” he said.
On social: Man places a bet.
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PointsBet Oz sale talks
PointsBet has confirmed it is in talks with NTD, the company behind the Australian Betr, over a potential buyout of its Australian business.
Starting point: PointsBet issued a statement last week confirming a story in the Australian press over a reported A$250m bid from the company behind the Australian Betr (which is not to be confused with the US betr),
PointsBet said the talks encompassed its Australian betting business, adding that any potential transaction “will be assessed in the context of” its entire business.
In FY22 the Australian business generated net revenue of A$195.2m, up 30% YoY, and an EBITDA of A$7.7m.
Getting Betr all the time: The bidder is a joint venture between New Corp, BetMakers and Tekkorp and is led by ex-BetEasy boss Matthew Tripp. It previously made a A$1bn bid for the Western Australia TAB that came to nothing. The same consortium also made a ~A$220m bid for PointsBet Australian in June.
The iGaming operator filed insolvency proceedings on the last working day before Christmas, affecting 140 Malta employees.
Beginning of the end: In a letter published by the Times of Malta signed by Genesis Global co-founder Yoav Dotan, the company informed its Malta-based employees they had been made redundant and that it might struggle to pay their December salaries.
The insolvency follows the departure of previous CEO Ariel Reem and the closure of the company’s 14 UK-facing sites in early December.
Reem said on LinkedIn at the time that it was hard to summarize eight years “when building (a business) from scratch”.
An anonymous employee told the Times of Malta, “we knew this was coming as the company could not pay its dues”.
Regulatory failure: In Jan22 the company was levied with a £3.8m fine by the UK Gambling Commission and a warning about future behavior after “significant” AML and social responsibility failures were uncovered.
That followed a temporary suspension in Jul20, which was lifted in Oct20 after compliance improvements.
Genesis operated sites such as Casinoplanet.com, Genesiscasino.com, Sloty.com, Spela.com and Vegashero.com.
Spel it out
The Swedish government should sell its interest in Svenska Spel’s sports-betting operations, according to online gaming association chief.
Hoff with his head: In a letter published by Sweden's largest circulation daily Dagens Nyheter, Gustaf Hoffstedt, secretary general of the Swedish Trade Association for Online Gambling, suggested it was “difficult to find arguments” in favor of having the state’s continued involvement.
Hoffstedt referred to a 2017 government investigation that also suggested the “best alternative” was for the state to divest itself of Svenska Spel Sport & Casino.
He added that the new right-leaning government includes moderates who have “long advocated” such a divestment.
He pointed to how the state divested itself of Vin & Spirit in 2008 by selling the business to Pernod Ricard for SEK55bn.
What he says: “It’s high time for the government to cut (its) ties as a commercial betting and casino operator and focus on its unique role as legislator and rule setter.”
Meanwhile in Finland: According to a LinkedIn posting from gaming lawyer Antti Koivula, Finland’s minister of European affairs Tytti Tuppurainen has told local media “there is a unanimous view within the government on abandoning Veikkaus’ monopoly on digital games”.
EE’s new boss
Esports Entertainment has appointed Alex Igelman as its CEO.
Out with the old: Grant Johnson’s replacement in the hot seat at Esports Entertainment has been named as the gaming lawyer and former founder of FairP2P and Esports Capital Corp.
Igelman said Esports Entertainment was “making significant strides” in creating a “valuable esports brand” and is initially looking at some of its key owned assets to kickstart this process.
“The company also owns certain valuable assets and relationships in the esports sector and there is a substantial growing addressable domestic esports betting market for the company to take a leadership position in,” he added.
VICI: The gaming REIT capped off a “transformational” year with deals with Century Casinos, a new lease agreement for the Mirage with buyer Hard Rock, and the sale and leaseback of two properties from Foundation Gaming.
The team at JMP believed there is more to come with ~$4bn of liquidity and that, with more operators opting for the OpCo-only model, will “drive future deal flow”.
Tough crowd: Nevada revenues were down 7.6% overall to $1.22bn and Strip revenues dropped by 11.3% to $669.5m in November against a tough comparative from last year. Visitation was up 4.9% YoY, while convention attendance rose 45%.
The analysts at Wells Fargo said November was “solid” and consistent with operator commentary.
Slots enjoyed their best-month ever, generating $416m of all state revenue and up 2% YoY.
JMP analysts noted weakness in sports-betting handle, down 16% YoY for the second consecutive month.
“While too early to call, we believe the rapid legalization of sports betting in the US could be having an impact within the state,” they added.
Macau: Under the auspices of now passed zero Covid restrictions, Macau suffered its worst year since 2004 with revenues down over 50% to $5.25bn. December GGR came in at $435m, down 56% YoY.
Delaware: Online casino GGR dropped 1% YoY and 17.6% MoM to $987k, its lowest monthly total since February. Sports-betting GGR was down 16.7% YoY to $1.5m, while handle rose 17.2% to $10.2m.
Startup Focus – Players Lounge
Who, what, where and when: The Brooklyn esports-based wagering operator was founded by Zach Dixon and Austin Woolridge in 2014. The company has two products available via the iOS App Store enabling gamers to win money playing AAA games such as Madden, NBA2K and FIFA.
Funding backgrounder: The company raised $10.5m from a Series A round in July this year led by Griffin Gaming Partners, with participation from Comcast Ventures, Samsung Next, Vice Ventures and Sharp Alpha Partners among others.
The pitch: Players Lounge has already become the largest skill-games operator in AAA video games in the North American market, says Dixon. “Our first product has done $150,000,000 in bets over the past few years. Our new product is going to blow past that very quickly.”
He notes that it hired talent from various OSB names to scale their bet-against-the-house product, with hopes of “dominating the AAA skill-games vertical”.
“Early metrics for the bet-against-the-house product look significantly stronger than the head-to-head platform,” he adds.
What will success look like? “Over the short term, success to us means building the next Twitch,” says Dixon. “We're on the road to building a profitable unicorn and are very narrowly focused on executing within our sub-genre for now.”
The Week Ahead
Coming up: The Startup Month #6 will be sent tomorrow. Included in the latest edition:
What the experts are expecting from the betting and gaming sector startups in 2023, plus our 10 companies for ’23.
Our roundup of funding in 2022 reveals over $250m was invested over the course of the year in a total of 49 companies.
The Macau authorities have further eased travel restrictions, now no longer requiring people from overseas, Hong Kong or Taiwan to quarantine upon arrival. The Hong Kong-Macau ferry was set to resume operations on December 30.
Bleau is the color: Fontainebleau Development and Koch Real Estate Investments have secured a $2.2b loan from a lending consortium including JP Morgan, Blackstone and VICI Properties to complete construction on the Strip.
The Ohio For Responsible Gambling group has launched the ‘Pause Before You Play’ campaign ahead of the launch of sports betting this month, while Ohio Casino Control Commission director of problem gambling services Amanda Blackford encouraged consumers “to have fun” but “be responsible”.
Maverick Gaming has acquired Evergreen Gaming’s four casinos in Washington state for $80.5m.
What we’re reading
Carry on at your convenience: Gaming’s struggles against the advance of videogame gambling.
Jan 3: The Startup Month #6
Jan 10: Deal Talk #6
Jan 17: Due Diligence #3
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