‘Unsettling’: Insider questions role of Entain chair in CEO search
Insider breaks cover at Entain, Gambling.com’s ESPN Bet boost, Flutter and 888 in the week ahead, startup focus – Bettle +More
Fears voiced over Barry Gibson’s influence on new CEO choice at Entain.
In +More: the cannibalization debate, pt 97…
Gambling.com drives “spectacular numbers” of NDCs to ESPN Bet.
The week ahead: Flutter and 888 publish their earnings.
In Startups: Winible raise, the startup focus is Bettle.
This haunted world is killing me.
Insider voices Entain concerns
Deep throat: Insiders at Entain are worried about the influence of chair Barry Gibson over the new CEO search, fear the company is continuing the mistakes made under previous incumbent Jette Nygaard-Andersen and are scared MGM Resorts won’t end up making a bid for the company.
What we do in the shadows: Speaking to Earnings+More on condition of anonymity, a current employee said the “shadow of Jette still looms” and suggested the strategy of moving towards being a broader entertainment company rather than a gambling business “lives on.”
Recall, Nygaard-Andersen resigned with immediate effect in mid-December, since when board member Stella David has taken on the interim role.
David appeared to signal a back-to-basics approach on the FY23 earnings call, suggesting the attempt to fashion the company as a “broader entertainment company” had become a “distraction.”
All at sea: Speaking on behalf of a number of concerned employees, the insider noted the prolonged process for finding a replacement CEO was “very unsettling,” particularly given that Gibson, who is overseeing the process, was similarly in charge of deciding on the board’s appointment of Nygaard-Andersen.
When contacted by E+M, a spokesperson for Entain said the company was “making positive progress” in its search for a new permanent CEO.
“As you would expect, the board is conducting a rigorous process to consider both external and internal candidates.”
Bench him: Multiple sources suggested last week Gibson will eventually be replaced as chair by David but this is unlikely to happen without a permanent CEO in place, and the fear is what influence Gibson will have over that decision.
“I’m not sure he knows what the business needs,” the insider said of Gibson.
“It feels like the company has become trapped with this rhetoric about needing a FTSE 100 turnaround expert and this being an entertainment company and not a gambling company,” they added. “The fundamentals are being missed.”
Sources close to the company pointed out the appointment of a new CEO is a collective board decision and not one for the chair alone.
They added it would “make no sense” for Entain to suggest the company was against hiring top people with industry experience.
Self-disassembly
Here’s one we unmade earlier: Within Entain there is also concern over the chatter about a reversal of the previous bolt-on M&A strategy. As E+M revealed in early March, the company is thought to have put PartyPoker up for sale while it was subsequently revealed that, on the recommendation of board member Ricky Sandler from Eminence, Moelis has been appointed to oversee a review of possible disposals.
Flooding in: Sources last week told E+M the company has received “dozens” of indications of interest in various elements of the business. But the insider was scathing of what appeared to be a determination to undergo a public fire sale.
“The whole concept of trying to sell something like PartyPoker is almost an admission that you have measurably destroyed value there,” the insider argued.
“It was worth billions and they are selling it for perhaps £150m.”
Sources close to the company suggested “there is no reversal of the bolt-on strategy,” adding there is a review process that “may, but not necessarily” lead to disposals.
Be careful what you wish for: The insider said until recently the assumption within Entain was it was an “inevitability” that the company would eventually be sold to MGM.
“But what is scarier is that MGM isn’t pressing the button on that,” they added. “It feels like they want to replace us organically.”
Blame game: Investment sources last week said MGM Resorts management was “pretty pissed off” about both Entain’s performance and the attempt by David on the earnings call to blame the European downturn on “having spent too much time and energy on the US tech.”
“The fear is that MGM has lost interest because they can see it is a bag of spanners,” said the insider. “The greater fear is what happens if MGM doesn't buy us.”
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+More
Stats Perform has extended its data licensing partnership with sports-betting technology specialist Checkd Dev for the Opta feeds.
Cannibalization debate, pt 97…
Not letting go: Deutsche Bank said in its latest monthly online review that “while it may not be what some want to hear,” the team has been showing for some time “in one paragraph and one chart” how iCasino is “in fact having an impact” on B&M casinos.
“Let us again be very clear on another point,” the team added. “The aggregate pie is growing, no one is, or has ever, disputed this.”
“Thus, states are benefitting from the incremental aggregate tax dollars.”
Careers+More
IGT: Marco Drago is to step down as a director in May while his son Enrico will join the board, having previously been CEO at IGT PlayDigital. Gil Rotem, currently PlayDigital’s president of iGaming, will see his role expanded.
Star Entertainment in Australia has lost its CEO Robbie Cooke and CFO Christina Katsibouba, who have both announced they are standing down.
Catena Media has slimmed its board to six members, shuffling out three directors in return for two new faces, Erik Flinck and long-term Catena investor Dan Castillo.
Penn Entertainment has expanded its board from nine to 10 directors with the appointment of Anuj Dhanda. Dhanda is currently CTO for Albertsons.
SkyCity Entertainment has appointed Andrew McPherson as CIO, effective immediately.
Racecourse Media Group has announced the appointment of Ben Dowding to the new role of chief betting officer.
What we’re listening to
A tech disruptor: Playtech US chief commercial officer Marcus Yoder tells Bloomberg intelligence how Playtech’s SaaS business model works.
Capital Markets Forum – panel focus
Bolt-on out of the blue: One of the most topical panels at the Earnings+More Capital Markets Forum in New York on Monday May 6 will be the discussion entitled ‘No more worlds to conquer: what happens when the bolt-on deals dry up?’
However, as per our story this morning on Entain, a more timely question might be: What happens when an important cog in the wheel of M&A starts turning in the other direction?
Answering the questions: Discussing the issues of bolt-ons and M&A strategy on the day will be Thomas Nicholls, managing director for the strategic advisory group at PJT Partners, Adam Berger, partner at law firm Duane Morris, and James Brodie, head of international interactive at MGM Resorts.
The panel will be moderated by Adam Rivers, who now heads the betting and gaming practice at Alvarez & Marsal.
Remember, subscribers to Earnings+More get a discount to attend the event. Use the code EARNINGS 100. For tickets, click here.
Gambling.com’s ESPN Bet boost
Sportscenter of gravity: On the call with analysts last week Gambling.com CEO Charles Gillespie gave some insight into the previously reported influx of players into ESPN Bet in the first few weeks of its launch.
“We were able to drive fairly spectacular numbers of NDCs to ESPN Bet in Q4,” he said.
Recall, in recent comments at an investor conference, Penn Entertainment CEO Jay Snowden mentioned the ‘top of funnel metrics” were very strong for ESPN Bet.
You’re the one that I want: Still, Gillespie noted these new customers for a solus operator were less valuable to the affiliates than players sent to multiple operators in competitive new market launches. “In a new state launch, you get a bunch of different operators all launching in the same state at the same time,” he said.
“This was the opposite,” he added. “It was one operator launching in multiple states at the same time.”
“It's only fair and reasonable that they would not pay the same kind of full market rate.”
Less is more: The analysts at Jefferies noted Gambling.com brought in more NDCs than was forecast – 159k vs. a projected 98k – but at a less implied revenue per NDC of $204 vs. their $283 estimate.
The week ahead
Watch the greenbacks tumble: The big news this week will come from Flutter Entertainment with its first earnings announcement since it achieved joint listing status in New York. Notably, this will be the company’s first results stated in dollars vs. sterling.
Oops upside your head: As part of the switch in reporting currency, Flutter has also moved to GAAP reporting standards from IFRS.
While largely a technical procedure, the team at Jefferies noted it will allow for the first time a direct comparison between Flutter’s US operation and major rival DraftKings.
Jefferies see revenues for the business as a whole coming in at $11.8bn, while adj. EBITDA is forecast at $1.84bn.
Here we go round the mulberry bush: Also reporting this week is 888, which, as was pointed out in a recent note from the team at Peel Hunt, is likely to give company watchers a distinct sense of déjà vu. “A new management team presented a new strategy in 2022,” the analysts said. “Next week it is to happen all over again.”
Peel Hunt previously noted the “essentially whole new team” appointed by CEO Per Widerström, who come with “impressive CVs.”
“Strategy does not need to change much, in our view, it just needs to be executed.”
That was then: One piece of strategy already executed is the recent decision to can the partnership in the US with Sports Illustrated at a cost of $50m and place the future of its US operation under review. One of the architects of that deal told E+M that criticisms of the original deal aired following the announcement were an instance of “20/20 hindsight.”
This is now: With forecasts already lowered, the Peel Hunt team is not expecting any surprises on the financial front. However, the sting in the tail might come from the UK Gambling Commission and the establishment in the coming month of a new financial risk checks regime.
“We believe that 888 has anticipated future regulation,” concluded the analysts. “But we thought that about Entain, which then surprised us with a downgrade, so now we are not so sure.”
Also reporting this week: Playtech, Allwyn and Bragg Gaming.
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.
Analyst takes
Lottomatica: The team at Jeffries expects the re-regulation of the Italian gambling market, which is due to come into force in January 2025, to benefit the country’s leading operator Lottomatica. With the number of licensees chopped from around 200 to 50, Lottomatica will have less competition and plenty of takeover targets.
The analysts noted Lottomatica has increased its market share in the past five quarters and now stands just shy of 22%.
Online is now 52% of revenue versus 46% this time last year, which “could mean a re-rating in the near future.”
Funding news
Winible: The sports-betting influencer platform has raised $6m in a seed funding led by Inspired Capital and with participation from industry figures including Adam Wexler from PrizePicks, Kyle Christensen, ex-PointsBet, and 8VC founder and general partner Jake Medwell.
The platform is designed to bring sports-betting influencers ‘in from the cold’ by providing a “safe, secure, stable and professional platform.”
The company said it is signing up thousands of users every week without spending one dollar in marketing.
Winible was co-founded by Noah Traisman and previously received $500k in friends and family investment. It will soon be opening up an HQ in Miami. The company said it already has 100 of the top influencers signed up along with 75k active subscribers who have placed over $30m of bets.
Inside the raise: See The Startup Month on April 9 to hear from Traisman and Inspired partner Mark Batsiyan on Winible’s exponential growth hopes.
Growth company news
Cipher Sports Technology has launched a new service for bettors called Dimers Pro, which analyzes real-time data from over 20 leagues and, the company said, provides sophisticated sports bettors with information to inform their betting strategies. View Dimers Pro here.
Invincible: The AI-powered virtual-sports provider said the response to the beta launch of its Owners Club mobile horseracing game has been “overwhelmingly positive”, with an average of 392 NFT owners playing daily.
Players raced 693 NFT horses during the beta and purchased an additional 3,514 non-NFT horses within the two-week trial, averaging 17 horses owned by each player.
They participated in an average of 180 races per week and spent an average of 4 hours daily playing.
Sparket: The California-based sports-betting content platform has added Kent Young to its advisory board.
Startup focus – Bettle Fantasy Sports
Who, what, where and when: The Boston-based Bettle was founded by self-confessed season-long “fantasy sports nuts” chief product officer Dan Gentile and CEO Ty Masterson.
Funding backgrounder: The company raised a friends and family round in late 2022 when it launched an invite-only MVP. It then raised further cash from the same sources last year. This year it has launched a “proper” seed round and is talking to institutions.
“The primary focus with this round is to grow the team and then product investment and distribution channels,” says Gentile.
The pitch: “Season-long is the oldest and one of the largest forms of fantasy sports and it is continuing to grow and yet nobody is innovating for it,” says Gentile. “You get a better and more enriched weekly experience with your season-long roster.”
What will success look like? On the potential for an exit, Gentile says the management team is “keeping our minds open but not thinking about that right now.” “When we started this our stated aim was to build a sustainable daily fantasy product for season-long fantasy players,” he added.
“We think that’s a realistic goal. In the medium term we want to expand with partnerships and add more community angles.”
“We are product people. The fact that we can use our product experience on a fantasy product that we have wanted to use as players for years is enough for us.”
Calendar
Mar 26: Flutter, 888, Bragg Gaming
Mar 27: Allwyn, Playtech
May 6: E+M Capital Markets Forum
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