Bet On It: Macau gaming bureau reports big growth in March revenue

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 RECAP: Macau’s gaming bureau reported March gross revenue from games of fortune in the region was up 53% year-over-year to 19.5B patacas.

Meanwhile, Gan Limited (GAN) announced that Brian Chang has recently been named the company’s CFO. Chang had previously been serving in an interim capacity. Chang will be focused on guiding the company towards a timely closing with Sega Sammy Creation, Inc. Chang has served as the company’s interim CFO since November 2022.

Earlier this week, Stack Capital (STCGF) said it has entered into a strategic partnership with BetMGM (MGM). Pending regulatory approval, the partnership will allow BetMGM to utilize Prove’s Pre-Fill identity solution across its entire sports betting platform, including all of MGM’s U.S. land-based and online sports betting, major tournament poker, and online gaming businesses. Accelerated customer onboarding, enhanced security, and an improved overall customer experience are some of the benefits that Prove’s Pre-Fill identity solution will provide, enabling BetMGM to deliver a seamless and more secure betting platform for its customers.

STATE UPDATES: Fanatics Betting & Gamic has struck a partnership with the Tonto Apache Tribe, owner and operator of the Mazatzal Hotel & Casino, to officially enter the sports betting market in the state of Arizona, Covers’ Grant Leonard reports. The online sportsbook will now be available in 18 states across the U.S., the author notes. Additionally, Fanatics Sportsbook said it will begin migrating PointsBet’s platform in the state of Illinois after finalizing its $225M takeover of the Australia-based sportsbook, Sportshandle’s Chris Altruda reports.

Meanwhile, Minnesota State Senator John Marty has filed a third bill to legalize sports betting in Minnesota, though the legislation would come with a big tax rate and a major emphasis on responsible gambling, Sportshandle’s Benett Conlin reports. The bill includes a minimum tax rate of 40% and would allow up to 11 sports betting apps to go live in the state, the author notes.

Conversely, Sportshandle’s Conlin also reported that members of the Alabama House of Representatives are not pleased about the state Senate’s alterations to House Bills 151 and 152, which originally would have legalized sports betting and casino betting in Alabama. While stripped down versions of the measures seek to legalize a lottery in the state, the revised bill does not including sports betting apps or casino gaming, Conlin notes.

In other news, NBC News’ Katie Mogg and Aria Bendix reported that multiple state centers for problem gambling are noticing a significant rise in calls to their helplines. The circumstances around gambling addictions are also getting more severe, the authors say, citing directors of five problem gambling centers, a gambling researcher, and an addiction counselor. Gamblers are filing for bankruptcy, losing homes, or ending relationships, with callers skewing younger than normal, the authors note.

ANALYST COMMENTARY: On Wednesday, Jefferies raised the firm’s price target on Flutter Entertainment (FLUT) to 22,000 GBp from 19,500 GBp and maintained a Buy rating on the shares. The firm says that given “highly attractive return dynamics,” FanDuel will focus on customer acquisition, rather than a targeted profit level, implying a lower shorter term drop-through than U.S. peers. The firm, however, believes Flutter sits in a relatively better position to address the recent new topics of increased tax, VIP scheme scrutiny, and a potential ban on college betting.

Additionally, Wells Fargo initiated coverage of Flutter Entertainment with an Equal Weight rating and $210 price target after revamping GAAP/USD model and meeting with FanDuel CFO David Jennings and Director of IR Ciara O’Mullane. Most of the discussion centered on FanDuel, with Flutter reiterating its focus on the long term, particularly its approach to acquiring customers with positive LTVs/attractive payback periods, the firm notes. Wells also points out that the recent industry news flow has been negative.

Meanwhile, B. Riley resumed coverage of Genius Sports (GENI) with a Buy rating and $9 price target. The analyst believes Genius is one of the best ways to play “global, visible” online sports wagering growth. The stock is the firm’s “top pure play, real-money online gaming stock pick.”

Additionally, Mizuho initiated coverage of Wynn Resorts with a Buy rating and $131 price target. The analyst sees upside to estimates in Macau as the market recovers, and as Wynn’s properties display better than expected operating leverage, primarily at Wynn’s Peninsula asset. The firm also expects continued growth in Las Vegas, fueled by the expansion of the convention center, allowing Wynn to further optimize rates. The stock trades at a “compelling valuation,” the analyst tells investors in a research note.

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 (FLUT), 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).