Bet On It: Entain acquires sports modeling company Angstrom Sports

Welcome to the latest edition of “Bet On It,” where The Fly looks at news and activity in the sports betting and iGaming space.

SECTOR NEWS: Marriott International (MAR) and MGM Resorts International (MGM) announced an exclusive long-term strategic licensing agreement and the creation of MGM Collection with Marriott Bonvoy, which will launch in October and encompass 17 of MGM’s resorts, representing more than 40,000 rooms in Las Vegas and other cities across the U.S. Beginning in October, several MGM Collection with Marriott Bonvoy resorts will be available for booking on Marriott’s digital platforms, including Marriott.com and the Marriott Bonvoy mobile app, with all properties expected to be available by the end of the year. These resorts will continue to be available on MGM Resorts’ channels, including MGMRewards.com and the MGM Resorts mobile app. The agreement between MGM Resorts and Marriott will also benefit members of both companies’ loyalty programs. Members of MGM Rewards, MGM Resorts’ acclaimed loyalty platform with more than 40M members globally, will be eligible to link accounts with Marriott Bonvoy and receive select member benefits. Members of Marriott Bonvoy, Marriott’s award-winning loyalty platform with over 180M members globally, will be able to earn and redeem points for stays at all MGM Collection with Marriott Bonvoy properties.

Entain (GMVHF) announced the acquisition of Angstrom Sports for a total consideration of EUR 81M plus contingent payments totaling a maximum of EUR 122M, payable over three years. Angstrom Sports is a provider of next generation sports modelling, forecasting and data analytics. Its simulation-based predictive modelling creates pricing and forecasting capabilities. The acquisition secures Entain as the only global operator with a full in-house suite of end-to-end analytics, risk and pricing capabilities for U.S. Sports betting products. The acquisition is expected to complete during Q3. Jette Nygaard-Andersen, CEO of Entain, commented: “We are delighted that Angstrom will be joining Entain, enabling us to accelerate the development of the Entain Platform. Their next generation forecasting, pricing and risk management capabilities will unlock significant opportunities across BetMGM’s US sports betting offering, particularly in the fast-growing markets of parlay and in-play wagering. This acquisition will provide our customers with an unrivalled sports betting experience underpinned by enhanced in-house data-analytics, a global platform and market leading brand.”

EARNINGS RECAP: Las Vegas Sands (LVS) beat expectations in it second quarter earnings report on Wednesday. Additionally, the company announced the resumption of its program to return capital to stockholders. The company’s quarterly dividend has been reinstated at 20c per common share. The next dividend will be paid on August 16 to Las Vegas Sands stockholders of record on August 8. The company noted that Q2 consolidated adjusted property EBITDA was $973M. Marina Bay Sands adjusted property EBITDA reached $432M, while Macao adjusted Property EBITDA Reached $541M. “We were pleased to see the robust recovery in travel and tourism spending underway in both Macao and Singapore progress during the quarter. We remain enthusiastic about the opportunity to welcome more guests back to our properties throughout the remainder of 2023 and in the years ahead,” said Robert Goldstein, chairman and chief executive officer. “In Singapore, Marina Bay Sands again delivered outstanding levels of performance in all segments, with mass gaming revenue reaching another record result. We remain energized by the opportunity to introduce our new suite product and elevated service offerings to more customers as airlift capacity continues to improve and the recovery in travel and tourism spending from China and the wider region continues. In Macao, we were pleased to see the ongoing recovery now underway in all gaming and non-gaming segments progress during the quarter. We remain deeply enthusiastic about the opportunity to continue our investments to enhance Macao’s tourism appeal to travelers from throughout the region, including to foreign visitors to Macao. Our decades-long commitment to making investments that enhance the business and leisure tourism appeal of Macao and support its development as a world center of business and leisure tourism positions us exceedingly well to deliver strong growth as visitation to the market increases and the recovery in travel and tourism spending proceeds. Looking ahead, our resolute commitment to making industry-leading investments in our team members, our communities and our market-leading Integrated Resort property portfolio positions us exceptionally well to deliver strong growth in the years ahead. Our financial strength supports our ongoing investment and capital expenditure programs in both Macao and Singapore, our pursuit of growth opportunities in new markets, and the return of capital to stockholders. We are very pleased to reinstate our quarterly dividend this quarter.”

Analysts from several firms responded to the Q2 report in various ways. Barclays, BofA and Argus lowered the  price target on Las Vegas Sands to $69 from $70, to $65 from $66 and to $68 from $72 respectively. Alternatively, Stifel raised the firm’s price target on Las Vegas Sands to $78 from $73. The recovery in Macau and Singapore continues to exceed the firm’s expectations and Stifel expects positive earnings revisions as the recovery and profitability in both markets is not fully embedded in current consensus, the firm told investors.

ADDITIONAL ANALYST COMMEMTARY: Credit Suisse raised the firm’s price target on Flutter Entertainment (PDYPY) to 19,870 GBp from 19,250 GBp and maintained an Outperform rating on the shares. 

Citi raised the firm’s price target on Genius Sports (GENI) to $9 from $7 and kept a Buy rating on the shares. Over the last month, Genius extended its partnership with Football DataCo and the NFL, the analyst told investors in a research note. The analyst believes the renewal of these two key partnerships without a competitive bidding process reduces the perceived risks that may have been an overhang on the equity. The new price target reflects “this de-risking and enhanced visibility,” writes Citi.

Macquarie initiated coverage of Melco Resorts & Entertainment (MLCO) with an Outperform rating and $16.30 price target. The analyst expects mass gross gaming revenue in Macau to return to 2019 levels in Q4, driven by the shift to mass. The firm initiated coverage of six Macau gaming operators, with Galaxy and Sands as its top picks due to their higher hotel room capacities.

B. Riley analyst David Bain last night initiated coverage of Gambling.com (GAMB) with a Buy rating and $14 price target. Much like Booking.com in the travel industry, Gambling.com participates in the hyper-growth online gambling sector with less risk, and does so profitably, the firm told investors in a research note. The firm says the company generates depositors for more than 200 business-to-consumer online gaming companies while its valuation implies a 19% discount to peers despite historical and expected forward organic growth well above them.

JMP Securities lowered the firm’s price target on Churchill Downs (CHDN) to $160 from $163 and reaffirmed an Outperform rating on the shares. Following a down April and May, June returned to positive growth for regional gaming, and the overall tone from recent property visits in Kansas City was “more of the same” in terms of the consumer, the analyst tells investors in a research note. Growth should remain muted throughout most of 2023, and JMP Securities is modeling gross gaming revenue flat to down 1% for Q3-Q4.

Jefferies raised the firm’s price target on DraftKings (DKNG) to $38 from $35 and held a Buy rating on the shares. The firm is updating its estimates for current trends in GGR and expenses and notes its view is “now positioned above the widely dispersed consensus average although not Street-high.” As DraftKings “continues to solidify its leadership role” in the U.S., the data points and catalysts should remain positive and the positive momentum should continue.

PUBLICLY TRADED COMPANIES IN THE SPACE INCLUDE: Accel Entertainment (ACEL), Bally’s (BALY), Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (PDYPY), Gambling.com (GAMB), Gan Limited (GAN), Genius Sports (GENI), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn Entertainment (PENN), Rush Street Interactive (RSI), Super Group (SGHC) and Wynn Resorts (WYNN).