Sep 23: Weekend Edition #65
Playtech H1 call, PlayUp SPAC merger, SBC Summit Day 2, analysts in brief, Twitch slots ban +More
It’s been a consequential week for the world of gambling-related streaming as it appears that the work of regulating the space has been outsourced to Amazon. However, the confluence of cryptocurrencies, gaming and streaming is like the dotcom era on steroids and clearly not a phenomenon that will be going away. Expect actual gambling regulators to start getting involved quick smart – but whether they can corral an ecosystem that is properly beyond reach is a different question.
Playtech H1 call
Chairman at Playtech says there is “absolutely no pressure” to sell Snai.
Responding to analyst questions over the future of Playtech’s B2C business Snaitech, chairman Brian Mattingley said “if there was an opportunity” to realize shareholder value with its Snaitech B2C business in Italy, the board would look at it. But he emphasized that “at the moment we don’t think the market is right”.
Recall, in the wake of the failure of the TTP takeover bid, there were rumors that Snai could be sold with Entain the name in the frame.
The comments came after the B2C business at Playtech, which is largely the Italian-facing Snai business, saw adj. EBITDA growth of 143%. Playtech has now raised Snai’s medium-term EBITDA target to between €300m-€350m.
Playtech was not so positive on the UK. “I’m relatively bearish on the UK market,” said CFO Andrew Smith.
“It is not going to be the driver going forwards.”
Product-wise, CEO Mor Weizer noted that live casino provider concentration was “very concentrated”. “The choices are limited. In the US it is only Playtech and Evolution and everyone will want both,” he claimed.
Noting the claims of the short-seller report on Evolution, Weizer said a comparison between the two companies was “not apples to apples”.
“We decided not to operate without licenses in Europe,” he said. “Our focus is on regulated markets and legal operators. I’m not tarnishing anyone.”
Fantastic voyage: In terms of potential M&A, Weizer noted Playtech “would consider’ M&A to expand Snai. Generally, he said Playtech is in a “fantastic position”, with leverage at less than 1x.
“For the first time since the pandemic, we are in a fantastic position in terms of the balance sheet and we have the means to do M&A in B2B and B2C,” he said.
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The Australian-based operator will be seeking a Nasdaq listing via a SPAC deal.
SPAC, back: The strategic review at PlayUp has concluded with the company seeking a merger with the IG Acquisition Corp (IGAC) SPAC, which will value PlayUp at $350m. The deal is expected to close in Q1 next year. A standby equity purchase has also been concluded with a fund managed by Yorkville Advisors Global to provide $70m of liquidity.
We’ll wait: IGAC is headed up by Christian Goode, previously president at Genting Americas, and he will now take on the role of CEO for the US at PlayUp. It raised $300m via a listing nearly two years ago.
Bradley Tusk from IGAC is a venture capitalist and will be the chairman.
Daniel Simic, PlayUp founder, will remain as overall CEO.
Risk on: PlayUp has had a troubled 12 months. At the turn of the year, a legal issue with former US CEO Laila Mintas blew up around a potential takeover by crypto trading firm FTX.
What we’re listening to
Chamath Palihapitiya on the All-In podcast on shutting down two SPACs: “When we launched these things, the stock market was in a different place. Looking at deals, it has gotten harder and harder to find a good risk/reward.”
Twitch gambling ban
The Amazon-owned streaming platform bans unregulated slots streaming.
Getting twitchy: Via a Twitter posting, Twitch signaled a crackdown on unregulated streaming on its site saying that it would prohibit the streaming of slots, roulette or dice games featuring gambling sites that were “not licensed in the US or other jurisdictions that provide sufficient consumer protection” as of October 18.
The posting namechecked Stake.com, Rollbit.com, Duelbits.com, and Ropobet.com.
Awks: Notably, Stake.com (which features as the shirt sponsor at Everton Football Club) is licensed by the UK Gambling Commission. Stake in the UK operates via a white label with Isle of Man-based TGP Europe.
Backgrounder: According to TwitchTracker, gambling is the 10th most popular type of content on the platform. Chris Krafcik from Eilers & Krejcik noted that in the US Barstool is the most prominent casino streamer at present; while in New Jersey, Resorts is working with the Slot Squad. Meanwhile, LeoVegas (recently bought by MGM) owns streaming site casinogrounds.com.
🍿 What we’ll be saying: E+M’s Scott Longley will be hosting a panel next week at iGaming NEXT in Valletta entitled ‘The affiliate debate: do streamers have too much control?’
SBC Summit Day 2
Sportradar CEO says more data means better betting options for players.
Data power: The depth of sports data and how it is consumed is one of the fundamental differences between the US and European markets, Sportradar CEO Carsten Koerl said during his fireside chat on Thursday morning.
“The US will be the biggest market in the world and with data embedded deep into the DNA of players there,” he told the audience. “More tracking data gives us the edge on predicting outcomes.”
“It’s down to CPU power: more data points, low latency and deep data that combine to produce better odds.”
Simulation vision: The time when players will be able to sit in simulated F1 cockpits and lean into the live race and bet on it at the same time is not as far off as people think, said Koerl. “Sony and Microsoft are there already and we should be thinking about it.”
Pros and cons of being public: Asked about life as the CEO of a newly listed company, Koerl said he wasn’t worried about profitability in the US because the group “will execute on it”. When it comes to everyday matters, he said there were two very different aspects to it.
Love and hate: “At times I hate it. Every day I have an army of analysts asking the same questions and I try to explain, but can’t use projections because it’s against SEC rules.”
“We can have $600m in the bank but can’t use it for M&A because I have to prove it’s going to be accretive.”
“The second is so exciting. I own 84% voting shares and you can’t imagine how good board meetings are. We can give directions and people act on them. That’s why we listed and it’s great.”
First Pitch – and the winner is: Kero Sports, whose founder Tomash Devenishek told E+M: “Part of the reason for the win at SBC First Pitch has been our early deals to deliver the Kero stack as a real money product to operators, which have been a major milestone for the company.”
Overcoming hurdles: On the following panel, David VanEgmond from Bettor Capital said that some of the best innovation “comes because of the regulatory challenges”.
“I don't think we can walk regulation back,” he added, suggesting regulated regimes “are only going to get more stringent”.
“That is maybe where you need to invest more product resources, smoothing AML journeys. You can’t wish away regulation in this industry.”
Non-Core: A US panel saw Gareth Core, product director at FanDuel, say retail would continue to play a strong part in the group's strategy. Daniel Graetzer, CEO of MaximBet, meanwhile, admitted his company wasn’t competing in the same rarefied atmosphere as the top-tier operators.
“Market share is not necessarily the biggest sign of success. You can pick small states, build market share and develop a nice EBIT. ”
Rich pickings: William Woodhams, CEO of Fitzdares, said “the number one reason to go into Canada is Canadians, they love to bet, they’re cool and they’re rich”. But Martin Lycka, head of regulatory affairs at Entain, said the jury is out on Ontario’s advertising ban on promos and inducements.
😱Caesars led the sector south on Thursday
Analysts in brief
Boyd Gaming: In their initiation note on Boyd Gaming, the team at JMP noted that currently Boyd’s partnership with FanDuel was driving its online growth but, with the deal for Pala Interactive pending, it will give the company optionality over its Stardust iCasino product in a market that long term could reach a TAM of $21bn at maturity.
Red Rock: Also looking at Red Rock’s new build plans, the team at JMP suggested that historical returns on new builds and high barriers to entry are “underappreciated” by investors. They also noted that in the Las Vegas locals market Red Rock has exposure to “one of the healthiest” in the US, with elevated home prices, wage growth and above-average population growth.
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Maryland will launch with OSB in October or November after the state’s Sports Wagering Application Review Commission agreed to approve individual sportsbooks on a rolling basis instead of waiting for a universal launch date. A number of operators, including Caesars, BetMGM, FanDuel, Barstool Sportsbook, and BetRivers, already have retail sports-betting licenses.
Take the pledge: Bally’s Corporation, BetMGM, DraftKings, Entain, FanDuel, and MGM Resorts International are among the operators that have agreed to a first industry-led responsible gaming standards effort with a 12-point pledge.
In other streaming news: According to the latest ratings, Amazon’s debut Thursday Night Football program surpassed expectations, bringing in 13.2m viewers.
GiG co-founder Ben Clemes is set to head up the company’s US efforts from the second quarter of next year as part of its broader North American expansion strategy.
Under the table: In the Alvin Chua trial, an associate of his told the court that Suncity had developed a system for under the table betting.
Sep 28-29: iGaming Next, Valletta
Scott Longley firstname.lastname@example.org
Jake Pollard email@example.com