Shake of things to come

HG Vora makes final case for change to Penn shareholders

May 23, 2025

Activist lays out ‘key questions’ for board on digital way forward.
In +More: Aristocrat hits Interblock roadblock.
IAC sees MGM Resorts as a “forever asset,” says Truist.
Sector watch looks at the old world of retail financial trading.

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?

The shake up

Blunder and fries: Activist investor HG Vora has laid out its final case in its efforts to effect change at Penn Entertainment, including taking a final swing at the “strategic blunders” of the current CEO Jay Snowden and chair David Handler.

Via a 116-page presentation deck and accompanying website WinAtPenn.com, HG Vora urged shareholders to ignore Penn’s attempts to limit the vote at the AGM to two board seats vs. the originally planned three seats.

👀 In another courtroom: Notably, in a similar activist action this week, a court in Delaware found that the board at a company called Ionic Digital breached its fiduciary duties in attempting to cut a board seat “not for a valid corporate purpose but as an inequitable defensive measure.”

Note: HG Vora has brought its case in a Pennsylvania court, not Delaware.

Tuning out: Central to HG Vora’s case is what Penn Entertainment should do next with its digital business and the questions that need to be answered as to next steps, starting with ESPN Bet, which the analysis showed underperformed during the recent NFL season.

It pointed out ESPN Bet’s average monthly users declined 27% between Q423 and Q125, down to 560k.
Meanwhile, in the last “critical” NFL season, ESPN Bet’s first full season, app download lagged the competition, producing 1 million sign ups but coming behind six other competitors.

Time to call it a day? The presentation suggested the board must answer the question as to whether the partnership should continue beyond the three-year break next year.

“If so, how can Penn restructure the deal and right-size the cost structure to accelerate breakeven and increase profitability?” it asked.
“If not, can ESPN Bet be sold or otherwise monetized?”

No, Canada: With the recently launched Hollywood standalone iCasino app, HG Vora questioned whether the leadership team can be upgraded, with more “experienced” online personnel being drafted; while with the Canadian-facing theScore, it questioned whether Penn was the “right owner.”

Pointing out theScore was performing well in a non-core market for Penn, it asked whether the cost structure was appropriate and questioned “how much opportunity exists for growth in Canada.”

You don’t know what you’re doing: The theScore buyout and the disastrous Barstool venture, along with the 10-year $150m-a-year ESPN Bet guarantee, are central to HG Vora’s charge of value destruction against the current Penn board and management.

It said the “flawed” strategy has cost the company $4bn and generated over $1bn of losses, not including the $850m Barstool writedown.
The activist said the shift away from a highly profitable B&M business model to online occurred despite the company having “no clear product advantage or internal expertise.”

Gone, not forgotten: This has led to a deteriorating shareholder returns outcome, with the shares having lost $19bn of value since their peak in 2021 at $136 vs. the current share price of $16.15, a near-90% drop.

Meanwhile, HG Vora said adj. EBITDAR has fallen 22% compared to 2019, margins have contracted by over 1,000bps and net leverage has risen from 2.4x to 5.5x.

Change is gonna come: HG Vora closed its argument by saying that to “ensure the next five years do not look like the last five under the leadership of Messrs. Handler and Snowden change is urgently needed.”

Penn’s milkshake brings all the boys to the yard: Away from its activist investor trauma, Penn has announced a partnership with Shake Shack, which will see the burger chain open outlets at 10 Penn regional casinos.

Omnigame is reshaping iGaming by offering a full-spectrum service—game studio, platform provider and operator in one. It creates unique, player-focused games with integrated mechanics that engage recreational players. This approach is proven with success on pip.dk.

Ready to partner with the innovators? Explore more at Omnigame.com.

+More

Block chain: Aristocrat’s bid for ETG supplier Interblock appears to have hit a roadblock, with the two companies reported to be unable to agree on a valuation. According to IAG, the deal is currently on hold despite having apparently been signed, sealed and delivered just a matter of weeks ago, with the Australian games provider baulking at the $1.3bn price tag. The report suggested it is only willing to go to $1.1bn.

Flutter Entertainment has launched an offering of $2.8bn of senior secured notes, with the proceeds due to go towards repaying the bridging loan used to secure the recent Snai transaction.

Clarion at your convenience: The PE owners of Clarion Events, Blackstone, are reported to have put the business up for sale and are hoping to raise as much as £2bn. Blackstone originally bought the business in 2017 for £600m. Reuters reported that a roll call of PE houses have expressed an interest in buying Clarion, including CVC, KKR, PAI Partners, Ardian and Hillhouse Investment.

Premature articulation: It appears that Kalshi CEO Tarek Mansour jumped the gun on having done a deal with Elon Musk’s xAI, with the company deleting its social media mentions of the tie-up and issuing a statement to say that “details of the announcement had not been mutually confirmed.” What is certain is that Kalshi has been issued with another cease-and-desist letter, this time from the authorities in Arizona.

Read across

Sabre rattling: The UK Gambling Commission’s latest attempt to frighten off English football clubs from having sponsorship dealings with largely Asian-facing gambling entities, with warnings about offshore gambling, are likely to have little effect, according to legal sources. In Compliance+More.

+More careers

The big move: Adam Felman is the new CFO at High Roller Technologies, having previously fulfilled the same role at Digital Gaming Corporation until its B2B assets were sold to Games Global. Felman will replace Matt Teinert who has been in post since May 2023.

Esportes da Sorte in Brazil has hired Hugo Baungartner as chief business officer. Marco Falchetto has resigned as a board member at Bet-at-home and will be replaced by Claus Retschitzegger, who was previously director of legal, public affairs and corporate communications. GR8 Tech has appointed Edward Smyshliaiev as CTO.

Director of Licensing – Alderney
Director of Marketing Intelligence – Ras al Khaimah
Finance & Operations Director – US / Eastern Standard Time Zone

Earnings edit

Better Collective

Thrill of Brazil: Despite the overall revenue shortfall for the quarter, Better Collective claimed Brazil was performing ahead of post-regulation expectations, with the country delivering €10m of revenue in Q1. But this was down €7m vs. the prior-year period.
See yesterday’s Earnings Extra (PRO subscribers only).

IAC ♥️ MGM Resorts

Til death do us part: Major shareholder in MGM Resorts, Barry Diller’s IAC, sees its holding in the casino giant as a “forever asset” and will continue to play an active role in deciding the company’s strategy, particularly online.

Such are the conclusions from the team at Truist, who met with IAC's COO/CFO Christopher Halpin and finance SVP Mark Schneider.
Diller himself has a board seat at MGM, while former IAC CEO Joey Levin occupies another seat around the table.

Specifically, Truist said IAC has been very active on the board, advising on M&A and digital strategy, and has taken on a consulting role with BetMGM, “right-sizing” that company’s product and market strategy.

An open relationship: MGM aside, the analysts noted IAC has “explored” further deals in the real-money gaming space, pointing out that “while it will run M&A opportunities by MGM, there is no formal exclusivity agreement between MGM and IAC.”

They added that IAC does hold valuable gaming licenses, thus meaning there are no barriers on potential ownership stakes.

Puts & takes

Caesars Entertainment: Las Vegas continues to prove the doubters wrong, with 96% occupancy across the Caesars estate, reported the team at Macquarie after meeting with CEO Tom Reeg. “Bottom line, Caesars remains positive on the outlook for Vegas, as the city remains a sought-after location with more demand than supply,” the analysts wrote. In digital, meanwhile, Reeg believes the momentum will continue, with Caesars’ newest app, Horseshoe Casino, “gaining steam.”

Gambling.com Group [Nasdaq: GAMB] is fueling the online gambling industry with unmatched performance marketing solutions. Leveraging proprietary technology, a diverse portfolio of premium websites, and the newly acquired consumer-facing OddsJam and B2B service provider, OpticOdds, $GAMB connects operators to high-value players across the globe.

Positioned as a dynamic leader in the sector, Gambling.com Group is an engine of growth and profitability, backed by a proven track record of driving revenue for operators in sports betting, iGaming, and beyond.

Visit our investor page to see why it’s the platform behind the industry’s most successful operators.

Octoplay's Jackpot Hunt has gotten so big that we couldn't fit it in our banner.

Connections

The big deal: PrizePicks has been named as the official DFS partner of MLB’s Houston Astros, with a multi-year deal that will feature digital and in-stadium activations at the team’s Daikin Park stadium. This is the fourth recent deal between PrizePicks and MLB teams after similar partnerships were announced with the Padres, the Braves and the Giants.

Swedish-based tech provider Random State has received a license in Ontario, its first license in North America. Stakelogic’s online casino games are now available on Starcasino’s platform in the Netherlands. The online slot developer 1spin4win’s games are now available on Gamingtec. Games Global’s Gold Blitz Ultimate slot game is now available via BetMGM in Pennsylvania, Michigan and New Jersey under an exclusive content partnership. Scoreconnect and Optimove have partnered to launch Telegram Play meaning users can now place bets, view promotions and receive updates using the Telegram platform.

Sector watch – financial trading

It’s a London thing: With all the excitement being generated by prediction markets in the US in recent months, the global reach of existing B2C financial trading operations elsewhere can often be forgotten, or at least fade into the background.

Until recently the leading providers were all UK-listed, including IG Group, CMC Markets and the relative newbie Plus500.
However, as per E+M last week, the similarly UK-focused eToro has opted for a New York IPO.

Plus sizes: Back with the London-listed firms, it is Plus500 that reported most recently, with a Q1 update published in late April showing revenue falling 5% YoY to $206m while EBITDA was off by 9% to $93.8m.

However, both revenue and EBITDA climbed sequentially by 13% and 23% respectively, helped by the volatile trading conditions that prevailed in the first three months of the year.
The extent of the heightened trading levels caused by the market see-saws in Q1 is demonstrated by the falling numbers of new clients, both sequentially and YoY, alongside the data for ARPU, which rose 18% over the quarter to $1,577.

What is striking about Plus500 are its attempts at global expansion. The company has US presence in the futures market, and in March it announced the acquisition of Indian financial services outfit Mehta, which operates a suite of futures, options and cash equities trading products.

Meanwhile, in January the company obtained a new regulatory licence in the UAE from the Securities and Commodities Authority.
Also, during the quarter Plus500 launched its multi-asset offering for the Japanese retail market, comprising new OTC products based on indices, equities and ETFs.

Sweet dreams: Recall, Robinhood has its own international ambitions with a UK-facing offering, and it is clear the retail financial sector is going global in a way that the pioneers of the UK spread-betting sector at the turn of the century could have only dreamed.

Increase Operator Margins with EDGE Boost Today!

EDGE Boost is the first dedicated bank account for bettors.

Increase Cash Access: On/Offline with $250k/day debit limits
No Integration or Costs: Compatible today with all operators via VISA debit rails
Incremental Non-Gaming Revenue: Up to 1% operator rebate on transactions
Lower Costs: Increase debit throughput to reduce costs against ACH/Wallets
Eliminate Chargebacks and Disputes
Eliminate Debit Declines
Built-in Responsible Gaming tools

To learn more, contact Matthew Cullen, chief strategy officer: Matthew@edgemarkets.io