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: Yesterday, Gan Limited (GAN) announced that it has initiated a strategic review process to assess a range of strategic alternatives to maximize shareholder value. The intention is to complete the strategic review process in a timely fashion. However, there can be no assurance that the review process will result in pursuing or completing any transaction, and no timetable has been set for completion of this process. The company will provide updates, as appropriate. Shares were down 14% following the news.
Northland raised the firm’s price target on Gan to $2.50 from $2 and reiterated a Market Perform rating on the shares after the company reported Q4 revenue that was ahead of the firms estimate, but missed on profitability. Management did not provide 2023 guidance as the company announced that it has launched a strategic review process that it expects to be "swift" and reach a resolution in the "very near future," the firm noted.
Bally’s (BALY) announced a multi-year partnership with Minor League Baseball that makes Bally’s the first-ever national media rightsholder and exclusive fantasy and gaming partner of MiLB. This wide-ranging, multimedia partnership provides Bally’s with live broadcast and exclusive free-to-play gaming content rights across its digital platforms and strategic partner channels, which, when coupled with Bally’s innovative social and interactive features, will provide MiLB fans with a unique in-stadium and at-home experience. Under the terms of the partnership, Bally’s receives the right to use MiLB’s official marks in marketing as well as in-park signage, broadcast, and digital exposure.
Sportradar (SRAD) announced the integration of its ad:s technology into Snapchat, the Snap (SNAP) owned visual messaging app, creating a new channel for betting operators to engage and acquire customers using the sports technology company’s paid social media advertising service. Expanding the ad:s paid social media advertising solution to Snapchat allows Sportradar to connect sportsbook operators with customers amongst the app’s audience of 375M active daily users and over 750M monthly active users. Snapchat’s advanced age and location targeting capabilities guarantee that only legally qualified audiences are reached. Developed specifically for the sports betting and iGaming industries, Sportradar’s ad:s paid social solution uses artificial intelligence to provide operators with a deeper understanding of their customers and the means to serve personalized advertisements to individuals across Snapchat’s ad offerings. Using data driven automation and programmatic technologies, ad:s instantly generates millions of advert creatives and targets their delivery to sports bettors of legal age on social media.
In regulatory filings, DraftKings (DKNG) disclosed that its co-founder Jason Robins sold 300K shares of common stock for $5.32M and Matt Kalish sold 269K shares of common stock for $4.77M on March 27. Additionally, the company announced that DK Horse, the digital gaming operator’s first-ever horse racing product, has launched in twelve states and expects to launch in additional states by the Kentucky Derby on Saturday, May 6. The standalone, DK Horse-branded app allows eligible customers to access pari-mutuel wagering on horse racing. In November 2022, DraftKings and Churchill Downs (CHDN) announced a multi-year agreement pursuant to which CDI’s subsidiary, TwinSpires, agreed to power the advance deposit pari-mutuel wagering technology for DK Horse.
Entain (GMVHF) announced that it has been selected by TAB New Zealand as its preferred partner for a 25-year strategic arrangement. "Entain was selected based on a wide range of criteria, including operational expertise, cultural alignment with TAB NZ and its commitment to uplifting TAB NZ’s harm minimization and responsible gambling efforts. The proposed strategic arrangement, and timing of completion, remains subject to approval from the New Zealand Minister for Racing. Further information, as appropriate, will be provided after the completion of the Ministerial approval process," the company stated.
Nevada reported February statewide gaming win was up 11.15% to $1.24B. The state also noted that Las Vegas Strip gaming win increased 18.92% to $712.46M versus last year in February.
GAME INSIDE A GAME: NFL stadium sportsbooks will take bets on game days as early as next season, Sam McQuillan of Legal Sports Report confirmed Tuesday, citing multiple league sources. Team owners voted to permit NFL stadium sportsbooks to take bets on gamedays, during a league meeting on Monday. The change, first reported by The Athletic, is set to take effect for the 2023 season. The Washington Commanders are the only NFL franchise with a physical sportsbook on stadium premises. Beyond that, the Arizona Cardinals, New York Giants and New York Jets have ones located just outside their gates.
EARNINGS RECAP: Aside from the company’s strategic review, Gan also reported fourth quarter earnings yesterday. The company reported Q4 EPS of ($3.46) as compared to analyst estimates of (12c). The company’s Q4 revenue of $36.9M, was right in line with consensus. Dermot Smurfit, CEO of GAN, stated: "Our fourth quarter continued to show strong B2C KPIs as we grew active customers by nearly 50%. We also ended the year with solid momentum in our B2B sports betting business as we announced our partnership to support WynnBet at Encore Boston Harbor and had a highly successful launch last month. This marks our third GAN Sports client in the U.S. and we maintain a healthy pipeline of potential future partners for the platform. At the same time, it has become apparent to us that the capital requirements to gain market share for initiatives such as SuperRGS as well as in certain competitive markets for sports betting like Ontario, Canada do not provide a path toward achieving an acceptable ROI in a reasonable period of time. As such, we have elected to allocate capital away from these endeavors and toward more appropriate growth strategies. Accordingly, we are focused on leaning into the value that GAN Sports has demonstrated thus far and being a market leader in emerging Latin American markets through our B2C operations. Lastly, as part of our commitment to improving our returns for shareholders, we have launched a formal strategic review process to evaluate options available to hasten our path to better profitability metrics and a more attractive return profile. We hope to complete this process in a timely manner and will certainly provide updates as appropriate."
ANALYST COMMENTARY: Deutsche Bank raised the firm’s price target on Wynn Resorts (WYNN) to $134 from $128 and maintained a Buy rating on the shares. The firm said that given the risk of a U.S. recession and the uncertainty of the ramp in Macau, Wynn shares are already pricing in "some fundamental disruptions." Should Wynn re-establish its historical multiple, the firm sees $26-$71 of potential upside in the shares, should its estimates prove accurate within a 10% range. It expects management to begin to provide considerably more color on the opportunity in the UAE in the coming months and believes "this is likely to spur investor interest in the opportunity."
Barclays raised the firm’s price target on Flutter Entertainment to 14,000 GBp from 11,000 GBp and kept an Equal Weight rating on the shares.
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), 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).
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