Seismic
Fertitta’s deal for Caesars would reshape Las Vegas – again
The $17.6bn deal for Caesars Entertainment will have wider ramifications.
In +More: bet365 launches in France, Jenningsbet reaches 200 UK shops.
Las Vegas Sands’ Dumont bemoans lack of investor interest in Macau.
Robinhood CFO says Rothera JV will give it more predictions control.
Hard Rock Bet is growing – we know you know! And we want to bring in some more maestros to make beautiful music in our Sportsbook. You need to be among the very best in the industry to be considered for these roles. Are you up to it?
Earthquake
The shape of things to come: In accepting Tilman Fertitta’s $31-a-share offer, Caesars Entertainment could spark a transformational round of M&A that could have ramifications for major Las Vegas Strip rival MGM Resorts.
The deal announced yesterday would see Fertitta Entertainment pay ~$5.7bn and assume $11.9bn of Caesars’ debt, bringing the total value to ~$17.6bn.
It is priced at ~7.5x estimated 2026 EV/EBITDAR and 7x the 2027 estimate, while Jefferies said it was worth ~4.6x its 2027 adj. EBITDA estimate.
The $31-a-share offer is 49% above the prevailing share price when news about talks leaked in February.
All you can eat: Truist pointed out that the combination would be a “large, diversified” business with 60 domestic casino resorts, OSB/iCasino, retail sports betting at more than 200 third-party locations and 550-plus Fertitta Entertainment outlets, including more than 450 Landry’s restaurants.
The joint loyalty programs would also have an expanded footprint, enabling access across Las Vegas and dozens of smaller local markets, the analysts added.
On the chopping block: A fortnight ago, ahead of the announcement that agreement had been reached, the analysts at JP Morgan said that combining the Caesars portfolio of casinos with those of Fertitta’s Golden Nugget business would necessitate “forced and opportunistic” asset sales.
Of the eight Golden Nugget casinos, JP Morgan said there was overlap with Caesars properties in Vegas, Lake Tahoe and Laughlin in Nevada; Lake Charles, Louisiana; Atlantic City, New Jersey; and Biloxi, Mississippi.
Properties in Cripple Creek, Colorado, and Danville, Illinois, have minimal overlap, they argued.
ONO: They added that they believe all of the Golden Nugget casinos are wholly owned, but many of Caesars’ casinos in overlapping markets are leased, thus are “more difficult and less lucrative to sell.”
Totting up the potential sales, the team suggested there might be ~$2.5bn to be found from selling Circus Circus Reno, Eldorado Reno, Horseshoe Lake Charles, Golden Nugget AC and/or a property in Las Vegas.
Potential buyers identified by Truist include the cash-rich Boyd Gaming and Monarch.
The team at Macquarie said: “Strategically, this deal could act as a catalyst for broader M&A across the regional gaming landscape.”
Out on the floor: However, it is MGM Resorts where the analyst spotlight immediately falls. Like Caesars, its shares have been laid low for much of the past year over fears about the downturn in Vegas.
But the multiples involved in the Caesars takeout appear to provide a floor on US gaming valuations, suggested Stifel.
It could “give investors a reason to become more focused on free cash flow generation versus just earnings momentum,” the team added.
They said that based on the 7.5x multiple, MGM could be worth ~$55 a share vs. the current $43 level, representing a 28% discount.
Mr Brightside: The Truist team was even more bullish, suggesting the deal multiples imply a share price closer to $69. The analysts this week issued a Buy note on MGM, arguing that recent consumer surveys suggested the pessimism over the Strip’s near-term attractiveness was overdone.
“Barring worsening geopolitical/macro noise, we see the potential for upside revisions to Street earnings estimates,” the team wrote.
Don’t ask what iCahn do for you: Truist went on to say that MGM is “well positioned” to gain market share in the event of any disruptions given a lengthy Caesars/Fertitta deal closing.
Caesars said yesterday that no financing was needed for the deal, with 10 banks lined up to assume the debt financing.
But regulatory approvals would be needed and there is a ‘go-shop’ provision in place until July for any further potential bids.
Macquarie said the possibility of an “interloper” getting involved was low, although, as Stifel noted, the attitude of Carl Icahn, a major Caesars shareholder, towards the deal is unknown.
Further questions come from Fertitta’s stake in Wynn, where at 11% he is currently the largest shareholder.
Spinning wheel: Another consideration is whether the new ownership might consider a different path for Caesars’ digital operations. A spin has previously been one of the potential avenues spoken about by Caesars’ current management and the analysts believe the new owners might look at this as an option to raise further cash to pay off a portion of the debt.
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People pleasers: In a posting on LinkedIn, Greg Knight, co-founder with brother Julian of Jenningsbet, said the company now boasts 200 outlets following the opening of its latest betting shop. Talking about the resilience of UK high-street bookmakers, Knight said: “People enjoy people. They enjoy community and a shared pastime. Watching sport, betting on the outcome, having a natter and saying hello. That never went out of fashion, and it never will.”
Ainsworth Game Technology shareholders rejected proposed executive changes backed by minority shareholder Kjerulf Ainsworth during the supplier’s annual general meeting, including the nomination of Lawrence Levy to the board and calls to replace CEO Ryan Comstock. Birgit Wimmer was elected to the board alongside re-elections for Graeme Campbell and Haig Asembauer. Shareholders also rejected Novomatic-backed amendments to takeover rules in Ainsworth’s constitution.
Bet365 has officially launched its online sportsbook in France after securing approval from regulator ANJ. The company has also partnered with problem gambling support group ARPEJ as part of its launch.
Earnings in brief
Acroud reported 18% YoY revenue growth to €11.6m in Q1 while adj. EBITDA jumped 178% to €1.24m, as profitability improved across the business. Losses narrowed significantly to €373,000 from €3.26m a year earlier. However, NDCs fell 31% to 50,303.
Read across
This is my truth tell me yours: President Donald Trump weighed in on the side of the Commodity Futures Trading Commission in the debate over whether the federal authority should have jurisdiction over prediction markets and labeled those that believe the states should have precedence as “scum.” See yesterday’s Compliance+More.
The facts on the ground: As the industry waits for the UK Gambling Commission to confirm whether financial risk assessments will finally be written into the license conditions and codes of practice, the inconvenient truth is that the regulated market has been operating under a de facto affordability regime for years. See Tuesday’s C+M.
+More careers
The big move: gaming affiliate Gentoo Media has announced that CFO Mads Haugegaard Albrechtsen has resigned, with the company now seeking his replacement. Gentoo said it was “engaged in a close and constructive dialogue” with the departing CFO to “ensure a smooth and responsible handover of responsibilities.” CEO Jonas Warrer said Albrechtsen “played an important role” in the move towards Gentoo becoming a standalone company after the split with GiG.
Flutter’s Sportsbet has announced the appointment of Doug Brown as its next CEO, effective June 1. Current CEO Barni Evans is to take on an expanded regional role across the APAC region.
Head of Compliance – London
Head of CRM – Miami
PR Communications Manager – Lisbon
E+M PRO
Genius Sports Earnings Debrief
Print the legend: Three months on from the company’s Legend acquisition announcement, Genius Sports CEO Mark Locke is unrepentant and, in conversation with E+M following the company’s Q1 print, candid about the experience and the lessons learnt. And the story Locke tells is more compelling than the share price reaction implied.
See the Earnings Debrief edition to be sent out later this morning. (PRO subscribers only).
Mark Locke says the ‘ferocious’ share price reaction came as a surprise. See last Friday’s E+M.
Bally’s Intralot
Proof is in the pudding: Ahead of the introduction of the UK’s new 40% top rate for remote gaming duty, Bally’s Intralot CEO Robeson Reeves made much of the company’s ability to not just weather the storm but gain market share as others faltered. Two months into the new regime, the proof of the theory appears to be coming to fruition. While comment on the Evoke bid was limited, Reeves said the evidence from the performance of the existing business showed how the “strategic rationale” of any deal is “not difficult to follow.”
See yesterday’s Earnings Extra edition (PRO subs only).
Read ahead: Monday’s Earnings+More will take a look at Reeves’ claims regarding VIPs.
LVS’ Macau riddle
Riddle me this: The apparent obliviousness of investors to the attractions of the cash Las Vegas Sands is earning from its positioning in Macau is one of the dilemmas relatively new CEO Patrick Dumont is having to learn to live with.
Speaking to the analysts at Bernstein during their Strategic Decisions Conference this week, Dumont confessed to being perplexed by investor attitudes.
“I can’t tell you why the market isn’t viewing our cash flow with the same level of quality as we believe that it has,” he told the analysts.
“There’s a lot of people in this room that might be able to answer this question better than I can.”
Back yourself: The company’s response to the apparent lack of investor appetite is to buy back its own shares. “We’ve been buying back stock aggressively, and we’ll continue to do that,” Dumont added. “We think the valuation is low.”
The Macau recovery, he stressed, is premium-led, with new and younger high-value patrons replacing the unrated play that once dominated.
A three-year capex programme – the Venetian is under renovation now – underpins the path toward the company’s mooted $2.7bn-$2.8bn EBITDA ambition.
Quality control: In comparison, Singapore is an easier sell. Dumont didn’t dispute that Marina Bay Sands has become the world’s top premium gaming destination. “That’s what it seems like,” he said. “That’s what our goal was.”
He said the property’s ~52% EBITDA margin was a product of “the quality of investment and the type of patrons that are available in Singapore.”
The $8bn IR II expansion clears return thresholds even on aggregate spend, he insisted, anchored by a 15,000-seat arena meant to pull foreign visitation.
As Dumont put it: “I would love to have it open tomorrow.”
Soft2Bet Evaluates Alberta Market Entry to Strengthen Canadian Footprint
Soft2Bet has announced its intention to enter the Alberta iGaming market, pending regulatory approval. Leveraging success from its Ontario brand, ToonieBet, the company eyes a market projected to exceed $700 million at maturity. Soft2Bet is currently preparing for technical requirements under the iGaming Alberta Act, overseen by the AiGC and AGLC.
“We are committed to delivering localized, engaging experiences that reflect the unique preferences of each market,” said David Yatom Hay, General Counsel, Soft2Bet.
Connections
The big deal: Fanatics Markets has launched a co-branded FIFA World Cup 2026 prediction market hub in partnership with ADI Predictstreet, FIFA’s official prediction market partner. The platform combines event contracts, tournament news, official player data and in-app content, and is available across 23 US states and four territories through the Fanatics Markets app and website.
Playson has received licensing approval to offer games in the Philippines from PAGCOR. QTech Games will now offer BNG Casino’s full portfolio of content via an expanded partnership. Evoplay has announced a content partnership with Brazilian site F12.Bet.br. Stakelogic’s games are now available on Solcasino’s platform in Spain. Tipico has boosted its content offering in Germany through a new strategic partnership with PopOK Gaming.
Still overpaying for geolocation? Find out why over 25 operators have upgraded to GeoLocs!
’Hood’s Rothera plans
Taking control: Robinhood hopes its JV with Susquehanna will enable the company to grab more control of its prediction markets offering and see more of the economic benefit versus the current arrangement with Kalshi, according to CFO Shiv Verma.
Talking to analysts at the Bernstein annual strategic conference this week, Verma said that with the Rothera platform, Robinhood’s PM product would be vertically integrated.
Sayonara Kalshi? Verma noted Robinhood’s aim was on vertical integration. “The history of Robinhood is we usually partner for speed to market, and then we like to vertically integrate because you control the whole product engineering, you also control the better economics,” he said.
“When we do that, there is no reason in the fullness of time that most of our flow should go through our own exchange,” he added.
100% better off: Verma added that via controlling the product and the “engineering experience,” it means Robinhood would also “control the monetization.”
“The way it works today is the customer pays $0.02 per contract, $0.01 goes to Robinhood, $0.01 goes to the exchange,” he noted.
“When you control the entire piece, there’s a lot of things you can do.”
Pay it forward: But he added that Robinhood would pass the benefits of the improved economics on to its customers. “We’re going to take most of the value and pass it on to customers, and that’s going to allow us to have the best pricing in the market,” he promised.
He said the $0.02 per contract pricing structure was “not going to stay” and that the company would be coming out with “more innovative pricing.”
Life and death decisions: Asked what comes next with the prediction markets product, Verma noted Polymarket’s offshore offering was mostly non-sports and said Robinhood was adding assets all the time, albeit not at the rate of other exchanges.
“We have a couple of constraints,” he added. “We want to make sure it has good liquidity. If it doesn’t have good liquidity and customers won’t be able to get out, we don’t think it’s suitable. We also don’t list work contracts, death contracts, things like that.”
Meanwhile, he added that Robinhood was “seeing inbound enquiries about using the Rothera exchange, both domestically and internationally.”
“We’re talking to other jurisdictions where we already have licenses throughout the world to see if we can offer that as well, and they’re constructive. I think they’ll get there.”
Upcoming earnings
May 29: Genius Sports Earnings Debrief
Jun 2: High Roller Earnings Debrief
Jun 4: Allwyn
Jun 9: Meridian Earnings Debrief
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