Shop front
Bally’s Intralot looks at franchising the William Hill estate
Franchising and large job cuts for evoke floated in Bally’s talks with investors.
In +More: Now Meta is working on a predictions market app.
Puts+takes: Boyd in the spotlight if Caesars, MGM Resorts deals go through.
Venture playground: PrizeKings puts the case for prize draws.
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Run for the Hill
Every little helps: Bally’s Intralot is telling investors it is considering a franchise model for the William Hill retail estate while also planning for substantial job cuts across evoke’s online operations, according to sources.
It is thought Bally’s Intralot, which until now has no experience of running UK retail betting shops, believes a franchise model would mitigate downside risk.
Such a model would enable Bally’s Intralot to shift leases, capex and shop maintenance onto franchisees.
Fatboy slim: Sources were skeptical that such a plan would be workable, however. While franchising works in other sectors that exist on fatter margins, in retail betting the starting point is much slimmer margins.
Then there are the regulatory issues, with the liability for any responsible gambling or AML breaches likely to fall on franchisor and franchisee alike.
“Imagine what the Gambling Commission would think about a bunch of franchisees running this,” said one industry analyst.
Boy in da corner: Franchising of retail betting is a more accepted practice elsewhere in Europe, but the examples from both Italy and Greece point to why it is unlikely to work in the UK market.
In Italy, the betting ‘shop’ is frequently a counter inside an existing bar, tobacconist or newsagent, capped at a quarter of the commercial space.
In Greece, OPAP – now trading under the Allwyn name – distributes via ~4,000 branded agencies whose operators work on commission.
Crucially, the network rests on a state-protected monopoly on land-based betting.
Italy’s counters trade under a concessionaire’s license rather than carrying the compliance liability themselves. Neither condition applies to a UK estate.
First cut is the deepest: Franchising is one idea being considered as Bally’s Intralot seeks at least £180m of cost savings once it gains control of evoke following its successful all-share offer to buy the business and take on its £1.9bn of debt.
It is thought the company will seek to achieve 75% of its savings in year one with the rest following in the next year.
Marketing optimization is thought to have been identified as making up a large part of the efforts, but a large element of the plan will see a reduction in headcount.
It is expected there will be 25% or more cuts to the online business, in line with recent efforts to streamline Bally’s Intralot’s own online business.
Shopfitters of the world: But it is the retail operation that could prove to be the most challenging part of the business to turn around. While Bally’s Intralot has experience to spare in iCasino, its knowledge of sports betting – and retail sports betting specifically – is non-existent.
One source with experience in UK retail betting suggested the case for making a success of retail would involve substantial investment in the shops.
“William Hill shops look tired,” the source added. “There’s been no money for investment,” they added of evoke’s stewardship of the business.
“Other bookmakers have been eating their lunch.”
The source added that to get the shops up to the standard of the likes of Paddy Power would cost ~£200k per outlet.
With William Hill now down to around 1,000 shops, a fit out program could cost up to £200m. “They can’t afford that,” the source added.
Early closing: The analyst suggested that even talking about franchising in retail was something of an admission of defeat. “What this says to me is that there is an absence of ideas,” they said.
If anyone had a real plan for retail growth, William Hill would “surely already be doing it,” they added.
The retail source said they had heard rumors that Bally’s Intralot “didn’t really want the shops at all.”
“They weren’t too interested; they had to take the shops as part of the deal,” the source added. “And maybe they’d be looking to offload them at some point.”
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+More
Zucker bet: Meta is reported to be working on developing a prediction markets app that would initially work on a video game points system but with the potential to expand into real-money gaming. According to The New York Times, the app is internally referred to as ‘Arena’ and would function independently from Meta’s social networking apps.
Expansions: Bill Foley, owner of the NHL’s Vegas Golden Knights, has formally launched a bid to secure an NBA expansion franchise for Las Vegas. Foley plans to base the team at T-Mobile Arena and said he is assembling a small group of minority investors. The NBA is considering Las Vegas and Seattle as leading expansion candidates, with franchise fees expected to range from $7bn-$10bn.
Deal talk
Bragg has closed a $1.3m private placement. The financing remains contingent on completion of the planned acquisition of Drayton International, expected in Q3. CFO Robbie Bressler, COO Morten Tonnesen and director Thomas Winter participated in the raise while Drayton’s Matt Davey also subscribed, with Bragg planning to appoint him chair upon closing. Last week, CEO Matevž Mazij offered up his resignation after failing to gain enough support from shareholders to reelect him to the board.
Gaming Laboratories International (GLI) has announced that funds managed by CVC will become the company’s first external investor, marking a significant milestone in the testing and certification provider’s 36-year history. GLI said the investment will support its next phase of growth. The company said founders James Maida and Paul Magno would remain involved.
Super Technologies (formerly Superbet) has agreed to acquire Romanian software developer Crafting Technologies as part of plans to establish a major technology hub in Cluj-Napoca. The deal will add Crafting’s engineering team and talent academy to Super’s operations, while creating an initial 50 new jobs.
Puts+takes
The only game in town: Boyd Gaming will be one of the stocks to benefit should Caesars Entertainment leave the public market, according to the analysts at Benchmark, who have reiterated their Buy rating on the Downtown and locals operator.
Boyd would become one of the few remaining publicly traded companies offering meaningful exposure to the Las Vegas market, alongside Wynn Resorts and Red Rock Resorts.
The analysts believe this scarcity value, combined with Boyd’s operational strength and acquisition optionality, could support further upside for investors.
People get ready: Benchmark argued that recent take-private proposals involving Fertitta Entertainment’s Caesars deal and Barry Diller’s People Inc’s approach to MGM Resorts International have increased investor focus on the underlying value of gaming real estate and operating assets.
The team added that Boyd is uniquely positioned to benefit from any resulting industry consolidation given its strong balance sheet and significant financial flexibility.
The company could emerge as a buyer of casino properties or other assets that may be divested as part of potential privatization transactions involving larger peers.
Such opportunities could allow Boyd to expand its portfolio while acquiring assets at attractive valuations.
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Venture playground
Funding news
Down Mexico way: The UK-listed small cap Gana Media has raised £750,000 through a placing and subscription, issuing 375 million new shares at a 5% premium to the company’s closing share price prior to the fundraising.
The AIM-listed group said the proceeds would be used to accelerate growth initiatives across its Mexican-facing sports-betting, casino and media operations.
Management said the fundraising would support increased investment in key projects designed to capitalize on growing customer acquisition and engagement trends.
Directors participated in the raise, with chair John Barker, CEO Mark Epstein and board member Stefano Loreti each taking substantial portions of the new shares.
Up for the cup: In a subsequent trading update, Gana said its Estadio Gana sportsbook and casino platform has significantly exceeded internal customer acquisition targets during the World Cup period.
Between the start of May and 19 June, the platform added 13,585 registered users, 212% ahead of its target of 4,358, with daily registrations accelerating from 101 in May to 549 in June.
Management attributed the growth to recent product launches, affiliate partnerships, influencer campaigns, its Android app, peer-to-peer betting and media initiatives.
ALT Sports Data (ASD) has raised $5m in a funding round led by Game Changers Ventures, with participation from existing investors including Relay Ventures and Scrum Ventures. The proceeds will support the continued expansion of ASD’s League Operating System. Based in California, ASD works with more than 30 sports properties globally, including Formula 1, the World Surf League, X Games, SuperMotocross, BKFC and Professional Bull Riders.
In focus – PrizeKings
Who are you? PrizeKings is the work of three alumni of Entain: Nick Batram, a former City gaming analyst turned board-level operator, Will Longton and Gary Nall.
Batram’s interest in the category started when he was at Entain. “I originally looked at it as a customer-acquisition tool for real-money gaming,” he says.
“But what you’ve seen with Omaze, and in the UK, is that it’s become its own vertical – it stands on its own.”
The choice of South Africa as its first market is deliberate, as the ‘bet small and win big’ recreational profile provides the product fit.
What’s the big idea? Batram argues the prize-draw format proven in the UK of low ticket price and outsized headline prize will travel. “Why shouldn’t prize draws work in every market?” he asks. “It’s low ticket, big win. People aren’t betting half their salary.”
But the qualifier is localization. “You can’t simply take a UK product and dump it in a market and say, right, that’s going to work in Africa or South America,” he says.
The company’s answer is a platform Batram says can be configured to suit each market’s regulatory requirements, sold under a brand intended to carry across borders.
“You need to create a brand, which is really difficult,” he says. “It needs to stand for something.”
He concedes the barriers to entry are low and competition will be fierce, and he is candid that the regulatory weather could change.
The category’s poster child remains Omaze, which Batram rates highly. “It’s done a fantastic job,” he says. “They’ve reached a chunk of the audience that gambling companies have struggled to.”
KPIs: This is early days, with PrizeKings having launched its first South African raffle only days ago: a Spot the Ball competition at R10 a ticket, which closes at the back end of next week.
That first draw lets entrants choose their prize precisely so the company can read demand across prize types.
Marketing is being kept deliberately small: a drip of spend on Meta and Google, with influencer activity going live this week.
“We’ll lose money on the first few raffles,” Batram admits, “because nobody knows who we are.”
Funding backgrounder: PrizeKings closed a seed round in March. The company has not disclosed the amount raised. Backers include Vyking, together with Betplay Capital and a group of individual investors drawn from operating and investing roles across the gaming industry.
PrizeKings acquired its platform from Low6, which took an equity stake in lieu of cash.
Next on the agenda is a Series A, which Batram says the company will pursue once it has the learnings from its first two South African draws, approaching new investors rather than relying solely on existing backers.
Growth company news
Taking a punt: Australian sportsbook Punt123 has launched enhanced customer experiences and increased bet velocity through OtherLevels’ live, contextual, personalized bet prompts. Using the OtherLevels Sports and Experience Platform and its existing integration with BetMakers’ Apollo sportsbook platform, automated live race and form information and personalized bet recommendations are now being delivered to Punt123 customers. These prompts reach users both in and out of session via the Intercom or Xtremepush app push platforms.
Tequity has announced the launch of Exclusives, a new product vertical that enables operators to create and roll out original games from scratch. Powered by Tequity’s infrastructure and experience, Exclusives offers custom-built games that are tailored to operator needs.
Avanti Studios is adding its live casino games portfolio to bet365’s platform. The games will initially launch in Spain before expanding into more countries, the company said.
David Pomroy, previously of Relx Gaming and before that Replay Gaming, has gone out on his own with Lucky Deck Gaming and a new “satirical” trust-first social casino, which, according to his LinkedIn posting, “leads with genuine narrative and treats players like adults.” He said the company is currently a self-funded team of three, preparing to activate monetization, introduce slots and launch on iOS.
Upcoming earnings
Jul 17: Evolution, Betsson
Jul 21: Hacksaw Gaming
Jul 22: Kambi
Jul 29: Churchill Downs (earnings)
Jul 30: Churchill Downs (call)
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