You say you want a revolution
Speed of predictions rise catches OSB sector off guard
Polymarket's US return signals further competitive pressure for OSB market leaders.
In +More: Quintenz delay, BofA ups DraftKings’ estimates.
Earnings: Kambi, Evoke, BetMakers and Raketech.
Venture playground: The in focus company is CrowdCover.
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Revolutionary intent
You tell me that it’s evolution: Polymarket’s return to offering services to US customers, following the acquisition of CFTC-licensed exchange and clearinghouse QCEX for $112m, heaps further pressure on the OSB leaders to formulate a response to the startling rise of prediction markets.
Watching brief: “I would imagine every single company will get a question again on prediction markets and I expect their response will be that they remain keen observers for now,” said Jordan Bender, analyst at Citizens.
Blindsided: But this observer status is becoming harder to maintain as the speed of prediction markets-related developments gains further momentum, suggested Chris Grove from EKG.
He argued that gambling operators are “used to watching threats approach in slow motion at the state level.”
I love the sound of breaking glass: But prediction markets have – since before the November elections and with increasing velocity after – come “crashing through at the federal level, leaving gambling stakeholders stuck staring at the wrong screen.”
“It was clear that the Trump ecosystem was likely to be incredibly bullish on and supportive of prediction markets for economic, political and philosophical reasons,” Grove added. “And then, it was.”
Yet, this breakneck speed of development also carries huge risks, with a regulatory backdrop that is – perhaps deliberately – far from settled and a route to profit that is as yet obscure. It helps explain the reluctance of the operators to commit.
Rough rider, no you don’t want nada: “The uncertainty is the problem,” said Bender. “What happens if there is a change in administration three years down the track? The prediction markets are the wild, wild west.”
The economics are also uncertain. “People understand it is an opportunity but what does the income statement for predictions look like?” Bender added. “You can't spend $150m-$200m without 100% certainty the product is in it for the long run.”
Wallflowers: As it stands, neither DraftKings nor FanDuel have committed on prediction markets (despite rumors) but Grove thinks the pair have “no choice but to secure some kind of option to participate.”
“I’d be furious as an investor if they stayed staring from the sidelines,” he added.
Semi-skimmed: As to what form that involvement might take, both Grove and Bender agreed that, on their own, prediction markets – even with the added enticement of sports – might be a limited product. “Prediction markets feel a bit thin as a long-term standalone business,” said Grove.
Bender echoed the thoughts of Flutter Entertainment CEO Peter Jackson that they have a limited appeal vs. “full-fat” betting.
“For the betting consumer, it’s like a grocery store,” he said. “Do you want to go into a shop to buy one thing you need, or do you want to go into a shop which has everything you need.”
The price of everything: But rather than Kalshi or Polymarket being the ones posing the major threat, again both Grove and Bender agreed on where the real competitive threat comes from.
“Sportsbooks should absolutely worry about competition from ‘everything apps’ such as Robinhood or Coinbase that bundle trading, crypto, prediction markets and possibly even traditional betting into one tidy package,” said Grove.
“I don’t know whether Polymarket has that trading crowd,” said Bender. “But I can see Robinhood as more of a competitor.”
More the merrier: As Grove pointed out, the intentional linkages between crypto, trading and prediction markets highlights that “all those things are gambling, if not by the letter of the law.” Offering gamblers more ways to gamble is “usually superior to offering them fewer ways to gamble.”
“You don’t see any Vegas casinos deciding to specialize exclusively in blackjack,” he added.
“If I’m a sportsbook and I can’t offer crypto trading, I definitely don’t want to compete against a sportsbook that can offer crypto trading.”
Further reading: Meme stocks are back.
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+More
Left at the gate: Brian Quintenz’s Senate confirmation as the new head of the CFTC has been delayed after a member of the confirmation committee failed to make the meeting due to a missed flight.
Fixture pile-up: DraftKings announced yesterday it will report its earnings after hours in New York on August 6, with the call coming the next day – which is also slated to be the day that both Flutter Entertainment and Penn Entertainment report. Also reporting on August 7 are Super Group, Wynn Resorts and Full House Resorts.
Gaming & Leisure Properties has appointed former Deutsche Bank analyst Carlo Santarelli in the newly created role of senior VP of corporate strategy and investor relations.
Evolution said it has extended the deadline for the completion of the acquisition of Galaxy Gaming to October 18. The deal, originally set to close last week, has been caught up in the process of receiving regulatory approvals.
By the numbers
Michigan: OSB GGR rose 44% in June to $44.6m on handle that rose 9% to $303m, implying a hold of 14.7%. Promos rose 20% YoY to $14.1m, iCasino GGR was up 31% to $241m. FanDuel retained #1 in sports with 41% and regained the position of top spot in iCasino on 26% share.
Puts+takes
Bank of America has raised its Q2 revenue estimate for DraftKings to $1.5bn, 6% above the consensus, and adj. EBITDA to 24% above the Street at $290m. The team said the material beat would be driven by favorable hold in May and June.
Read across
Disney and the NFL are reported to be close to a deal for ESPN to buy certain of the league’s in-house media assets, including the NFL Network and NFL RedZone, and in return the NFL would take a stake in ESPN, according to Front Office Sports. Such a move would have implications for Penn Entertainment’s ESPN Bet JV as well as NFL data rights supplier Genius Sports.
Earnings
Kambi
Smashed: The sportsbook backend supplier’s Q2 adj. EBITDA dived by 50% to €3.7m and revenues were down 12% to €40.5m, figures that CEO Werner Becher said “came against a backdrop of challenging market conditions” and tough comps.
The company also blamed adverse forex movements and regulatory disruptions in the Netherlands and Columbia.
The share price fell over 7% in early trading.
See today’s Earnings Extra edition to be sent later this morning.
Evoke
Brighter later: Keeping an eye on the bottom line, the operator behind William Hill and 888 said that “robust” cost control along with an “increasingly efficient” business model had delivered a 43% midpoint improvement in H1 adj. EBITDA to £163m-£167m.
The company said this came after an improved revenue performance in Q2 even though the growth was a relatively slim 5%. This helped drag H1 revenue to an increase of 3%.
The brief trading update said online revenue rose 6% in Q2, while retail “returned to growth” following the rollout of 5,000 new gaming machines across the estate.
The company remains committed to its FY25 expectations for revenue growth of 5-9% and an adj. EBITDA margin of at least 20%.
Investors warmed to the news, sending the shares up 11% on the day, helping to send them back to the levels before its poorly received FY24 results.
The company will report its full H125 numbers on August 13.
BetMakers Technology
Soaring: The Australian-based tote and fixed-odds horseracing tech provider saw Q4 FY25 revenue rise 9% to A$22.6m ($14.8m) while adj. EBITDA of A$3.2m represented a record quarterly outcome, up 164% sequentially. It was the second consecutive quarter of free cash flow. During the quarter, BetMakers agreed to acquire Las Vegas Dissemination Company and completed an A$11.5m share placement to fund the deal.
Raketech
Snoring: Revenues for the gaming affiliate slumped by 54% to €7.8m with adj. EBITDA suffering a similar fate, diving by 55% to €1.9m. The company blamed the poor outcome on “continuing challenges” at its sub-affiliation business.
Stoiximan of the hour
It’s all Greek to me: The Allwyn-owned Greek lottery, betting and gaming operator OPAP has taken full control of online operator Stoiximan by snapping up the 15.5% of the shares it didn’t already own from the founding shareholders for €192m in cash.
The move follows the departure of founder George Daskalakis, who also founded Kaizen Gaming, who announced earlier this month he was stepping down to concentrate his energies on the latter firm.
OPAP first acquired a controlling stake in Stoiximan in 2018 and subsequently increased its interest.
Auf wiedersehen: At the same time, parent Allwyn has also announced that another subsidiary, Casinos Austria, has exited from B&M casino businesses in Germany and Australia.
On July 1, the company said it sold 10 casinos in Lower Saxony for gross proceeds of €67.7m.
Hooroo: On July 11, Allwyn said it accepted a €54m offer for its 42% interests in the Reef Hotel Casino complex in Cairns, Queensland, held through Australian-listed Reef Casino Trust.
On that note: Separately, Allwyn also announced a debt refinancing via the issuance of €500m in senior secured notes. The proceeds will go towards paying down the remaining outstanding debt from a previous €500m refinancing, which was due in 2027.
Earlier this month, Allwyn secured a €2.15bn credit facility,
Accompanying that announcement, the company gave a brief trading update saying that in Q1 the business was trading “broadly in line with our expectations” despite the economic uncertainty.
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Venture playground
Funding news
Better late than never: Sports data and analytics provider Odditt has belatedly announced it closed a funding round last fall, led by Four Okes Digital and including investments from industry veterans Chris Kape and Ron and Alon Segev.
It has also appointed former DraftKings executive Dan Malone as a strategic advisor.
The subject of a previous E+M in focus, the company was founded by Matt Bresler, and leverages advanced statistics aggregation tech and proprietary data collection methods to deliver insight‑rich sports data feeds.
Growth company news
Out of the (water) closet: ALT Sports Data has appointed Neale Deeley as SVP of Sportsbook. Deeley spent over eight years at Sportradar, most recently as the managing director, US Betting.
Odds provider nVenue has launched new live and micro-market products for soccer leagues in Europe, South America and North America. The expansion also includes full coverage leading into the 2026 FIFA World Cup.
Sportsbook backend provider Inplay Matrix has partnered with Marble Magic to launch the first marble racing game that allows real-money wagering through a sportsbook. The licensed game will offer favorite and underdog odds, in-play betting functionalities and live streamed races.
Another previous in focus company, Pixiu Gaming, is set to help lottery provider Scientific Games add Monopoly and Battleship iLottery games to its content hub following its recent exclusive licensing agreement with Hasbro.
In focus – CrowdCover
Who are you? CrowdCover is a live streaming app that merges the creator economy with sports betting to create engaging social experiences. The Miami-based startup was founded by Max Goodman and former NFL player Mel Bratton, and describes itself as the ‘Twitch for sports bettors.’
What’s the big idea? The platform turns every wager into a ticket to join exclusive live rooms hosted by creators. Users must bet the selected game for the room on their sportsbook to gain access.
Creators and affiliates unlock a new way to grow, engage and monetize their audiences by building watch-along communities.
Live stats, odds, leaderboards, betting tools and handicapper picks are all available within each room, along with other personalized features coming soon.
CrowdCover also features an influencer marketplace on its backend enabling creators to connect with brands for sponsorships, get paid and manage their accounts.
“Our approach is grounded in the cultural reality that creators often have more sway than institutions,” says Goodman.
KPIs: CrowdCover recently launched publicly on the Apple App Store after more than a year of beta testing. Goodman says the company’s KPIs focus on the goal of being the ultimate retention and acquisition tool for operators, affiliates and creators.
Funding backgrounder: The company is currently self-funded and will be seeking strategic partners as it scales.
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.
Upcoming earnings
Jul 23: Churchill Downs, Las Vegas Sands (call)
Jul 24: Boyd Gaming (call), Churchill Downs (call)
Jul 25: GLP (call)
Jul 29: BetMGM, Red Rock Resorts, Caesars, Brightstar Lottery
July 30: MGM Resorts, Robinhood, Hacksaw, Rush Street
Jul 31: VICI Properties (call)
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I’d love to see a Venn diagram of prediction markets players against OSB, and even against sweeps. Are they all fishing in the same pond?