💰The billion-dollar mortgage
GLP stumps up nearly $1bn to fund Bally’s Chicago casino build
Bally’s shares rise as the company secures deal with gaming REIT.
In +More: a curious SPAC, Downtown Grand up for sale.
Analysts at JMP make Flutter their top online pick.
Startup focus is Playbook Fusion.
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A monster deal
Deep dish: Bally’s has secured nearly $1bn in financing from gaming-centric REIT Gaming & Leisure Properties to go towards the $1.8bn needed to complete its significantly reworked planned casino in Chicago. GLP will also acquire the land for $250m before development begins, bringing the total Chicago investment to $1.19bn.
Also included in the $1.59bn new package are the sale and leaseback of two further properties, Bally’s Kansas City and Bally’s Shreveport.
Additionally, GLP has secured better terms for the previously announced Bally’s Lincoln Casino Resort deal, with the purchase price falling to $735m from $711m and the yield rising to 8% from 7.6%.
Good for the cash: Funding for the deal will be on a staggered basis and comes from cash in hand and operational cash flows, an existing cash revolver and the proceeds from potential capital markets activity.
Planting a flag: All in all, GLP will receive a blended cash yield from the transaction of 8.3%. For GLP, the team at Macquarie suggested the deal would give the predominantly regional gaming REIT a “flagship destination asset” while also expanding its relationship with Bally’s to 10 properties across nine states.
The team at Truist noted the GLP-owned/Bally’s operated structure for Chicago could provide the template for the Tropicana site in Las Vegas and, potentially, New York.
Keys to the castle: Recall, Bally’s took possession of the site of the casino on the former Tribune Publishing site in downtown Chicago on July 5. The reworked single-phase plans include a 500-room hotel tower. The property is set to open in 2026.
The deal resolved one of the overhangs for Bally’s, which saw its share price rise nearly 7% on Friday, leaving it just under 14% up on the week. But Truist noted it does raise the question of what happens next with the bid from major shareholder Standard General.
The team suggested Bally’s could benefit from being a private entity while the Chicago build goes through development.
Then following a deleverage it could re-enter the public markets.
🚀 Bally’s gets a booster shot
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+More
(Very) late to the party: A Montreal, Canada-based provider called Mazaii is to seek an IPO via a merger with the Relativity SPAC, which values the company at $500m. Mazaii is led by Eli Baazov, brother to David Baazov who previously ran Amaya.
The owner of the Downtown Grand in Las Vegas is looking for a buyer. The property is owned by real estate investment firm CIM Group and operated by Fifth Street Gaming.
RIP: Flutter has announced the passing of David Power, the co-founder with Stewart Kenny and Vincent O’Reilly of Paddy Power.
The week ahead
On Friday, Evolution will update the market, with the usual set of revenue and EBITDA growth numbers clouded only by the recent news of a strike among its workers in Georgia. Betsson will also report on Friday; its most recent news concerned the obtaining of a license in Peru.
Career paths
GR8 Tech has appointed Artur Ashyrov and Oleksandr Feshchenko as deputy CEOs. The current CEO, Evgen Belousov, will shift his duties to “strategic and visionary initiatives.”
Nominative determinism: Holland Casino has appointed Hans van Slooten as director of operations.
🎯The top pick
The new no. 1: Flutter is the best of the online bunch, with the largest brand in the US, “best-in-class” management and offering investors a hedge against US regulatory action, as well as a global footprint that generates $2bn of EBITDA growing at a high single-digit rate, according to the analysts at JMP.
The team last week noted that Flutter and FanDuel would benefit from the continuing stream of market exits.
Rich get richer: The JMP team added that FanDuel, with 46% OSB share and 27% in iCasino, will be able to drive incremental and monthly players and revenue as companies pull back. “Flutter/FanDuel is the most equipped through its global platform, strategy and balance sheet,” the analysts added.
“Flutter has the pieces, not just a single database or brand, to drive an advantage over mid- and small-scale competitors.”
More takes
Pick and mixed: Heading into Q2 earnings season, the team at Jefferies disagreed with the argument that Las Vegas has peaked and suggested the quarter just gone turned out better than anticipated for some.
Notably, the team said MGM Resorts and Caesars would have benefitted from earlier comps and exiting room supply while state data suggested May was up 3% YoY and commentary indicated a “strong” June.
In regionals, however, the picture is cloudier. Mature markets are normalizing, while in Macau the barrier of Chinese macro concerns continues to niggle.
Rush Street Interactive: Colombia’s appearance in the Copa America final last night vs. Argentina (which ended in a 1-0 defeat for Los Cafeteros) will have provided a boost to RSI’s Colombia-facing business, suggested the analysts at Macquarie.
Macquarie estimates RSI generates ~13% of revs from the country, and while the analysts expected low OSB hold they saw the potential for strong customer acquisition.
In North America, meanwhile, the team didn’t see anything that would “slow RSI down,” with growth apparent in its three largest iCasino states and evident “strength” in Delaware.
Wynn Resorts: The US business is set to deliver another “solid” quarter with continued strength into the July 4 holiday season, according to the analysts at Deutsche Bank, who have raised their US estimates.
However, with the Macau business thought to be shipping share, the team have trimmed their forecast there, but not enough to change their overall optimistic view.
By the numbers – Kansas
Carry on wayward son: The team at Jefferies pointed out that among the nine states to have reported full Q2 data, Kansas is the only one that breaks out free bet data, with the numbers showing the share of handle percentage falling 0.4 ppts to 2.9%.
Among the market leaders, the figures showed FanDuel cutting free bets by 0.3 ppts of handle, DraftKings down by 0.6 ppts and BetMGM cutting generosity by 3.1 ppts.
Tie me up: The team added that Kansas is one of the few states where DraftKings consistently leads FanDuel by handle, which in Q2 stood at 46% vs. 31%. But at the NGR level, the two were neck and neck at 44% vs. 42%.
🎁 As the analysts said, while DraftKings receives a significantly higher share of stakes in Kansas, FanDuel’s structural margin and generosity efficiency are such that it ultimately generates broadly similar revenue from the market.
Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.
Venture playground
Startup focus – Playbook Fusion
Who are you? The brainchild of former Inspired Entertainment CCO and industry veteran, Steve Rogers, Playbook Fusion is based in Manchester, UK.
What’s the big idea? Rogers believes sportsbook operators are missing an opportunity to engage a large audience of sports fans and bettors. This includes those who are simply sports fans, gamers who enjoy management format titles, virtual sports players looking for ownership over their teams and fantasy sports players seeking round-the-clock action.
These are players who are highly unlikely to walk into a retail betting shop but are engaged with mobile and video games, social media and streaming.
The level of ownership, persistent progression and the ability for skill development within Playbook Fusion’s games will allow operators to tap into this lucrative audience.
The company’s first game will be a football title and is slated for demo in Q4.
What they say: “Playbook Fusion aims to change the game for sportsbook content,” says Rogers, “to offer something truly unique by bringing together the worlds of betting and video gaming in a never-seen-before format that will allow operators to engage new audiences while providing fresh experiences to existing players.”
Funding backgrounder: The company is privately funded.
Growth company news
WagerWire has launched itself into two more verticals with FantasyWire and Wire Media. CEO Zach Doctor suggested this was a “natural evolution” for the company, which he co-founded in 2021.
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Calendar
Jul 19: Evolution, Betsson
Jul 23: Red Rock Resorts
Jui 24: Kambi, Kindred, Churchill Downs (e)
Jul 25: Churchill Downs (call), GLP (e), Boyd Gaming
Jul 26: GLP (call)
Jul 30: IGT, Red Rock, Caesars Entertainment
Jul 31: MGM Resorts, Rush Street
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