Bet On It: Massachusetts sports betting tips off head of NCAA Tournament

Genius Sports falls following Q4 results, Georgia senate punts on bill this year and other notable stories in the sports betting and iGaming space

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: NeoGames (NGMS) announced that its subsidiary, Pariplay will launch content with DraftKings (DKNG) in New Jersey. Wizard Games’, NeoGames’ in-house casino games studio, content will be available to DraftKings customers in the Garden State, including the Spirit of Mustang and other localized titles for the US market. DraftKings also has access to a large selection of top performing third-party games, including content exclusively available through Pariplay. Initially launching in New Jersey, Pariplay expects to also take its content live with DraftKings in Michigan and West Virginia, with a longer-term view to bring its portfolio to additional jurisdictions, pending agreement, licensure and regulatory approval.

Second Spectrum, a Genius Sports (GENI) company, and the National Basketball Association announced a multi-year partnership expansion naming Second Spectrum an Official NBA League Pass Augmentation Provider and an Official NBA Team Basketball Analytics Provider. The league and Second Spectrum will also work together to research and develop "Dragon", a next-generation technology platform that will track "mesh" data, which aims to synthesize millions of on-court basketball data points. The NBA will use Second Spectrum augmentation technology to create automated, enhanced graphics based on optical on-court basketball data for alternate telecasts available on NBA League Pass. The alternate telecasts will feature advanced team and player statistical insights integrated directly into the stream, enriching the experience and providing viewing optionality for analytics-focused fans. Additionally, all official NBA tracking data will continue to be integrated into Genius Sports’ world-leading basketball insights and analytics engine. Genius Sports will also continue to provide its services to all 30 NBA teams who rely on Second Spectrum’s precise machine learning for key basketball insights and decision-making.

Melco Resorts & Entertainment (MLCO) has entered into a share repurchase agreement with Melco International Development and Melco Leisure and Entertainment Group Limited, a wholly-owned subsidiary of MIDL, pursuant to which the company will repurchase 40,373,076 of the company’s ordinary shares from Melco Leisure. The aggregate purchase price is $169,836,073.04, which represents a per share price of approximately $4.2067. Closing of the Transaction is subject to the satisfaction of customary conditions. At the closing of the transaction, the facility agreement with MIDL pursuant to which a $250.0 million revolving loan facility was granted by the company as lender to Melco International as borrower will also be terminated following the settlement of all amounts due thereunder by MIDL to the company. A repayment of $200M by MIDL to the company was already made in January 2023. In addition to the privately-negotiated Transaction, the Company’s previously announced $500M share repurchase program remains in effect, of which approximately $412M remains available for future repurchases under the program. Entry into the share repurchase agreement in respect of the Transaction was unanimously approved by the disinterested members of the Audit and Risk Committee of the company. The Audit and Risk Committee engaged independent financial and legal advisors to assist in its evaluation process. Prior to the transaction, Melco Leisure owned approximately 727.7M shares, or approximately 53.1%, of the company’s outstanding shares. Following the Transaction, Melco Leisure will own approximately 687.4 million shares, which, following the cancellation of the repurchased shares, will represent approximately 51.7% of the company’s outstanding shares. The company will continue to be a subsidiary of MIDL, and the financial results of the company will continue to be consolidated in the financial statements of MIDL.

BetMGM (MGM) is now an Official Sports Betting Partner of the Boston Red Sox. This marks BetMGM’s first relationship with a Massachusetts sports team and the first sports betting partnership for the Red Sox. The announcement comes ahead of the state’s impending mobile sports betting launch. As part of the partnership, BetMGM signage will be featured at Fenway Park including on the iconic Green Monster, the ballpark’s left field wall. BetMGM will have a suite at the stadium and curate VIP fan experiences including access to batting practice with premium seats, alumni appearances, and ceremonial first pitches. Co-branded content will be integrated across both the Red Sox’s and BetMGM’s digital and social platforms.

Bragg Gaming (BRAG) announced that it launched its new content and Remote Game Server with Resorts Digital Gaming, or RDG, in New Jersey. Proprietary content such as Fairy Dust and Dreamy Genie from Bragg’s Atomic Slot Lab studio, as well as new exclusive premium content from the company’s partner studios is now available to RDG’s New Jersey customers.

MASSIVE: BetMGM (MGM) announced the launch of its mobile app in Massachusetts, giving customers access to a variety of online betting options and benefits tied to MGM Resorts’ destinations nationwide, including MGM Springfield. "The debut of sports betting in Massachusetts has delivered an incredible amount of excitement and activity to our retail Sportsbook at MGM Springfield," said BetMGM CEO Adam Greenblatt.

WynnBET (WYNN) announced that its online sports betting platform is live in the Commonwealth of Massachusetts. Players can download WynnBET on the Apple and Google Play Stores or register for an account.

DraftKings announced plans to launch its online sportsbook in Massachusetts on March 10 pending licensure and receipt of regulatory approvals. Upon launch, Massachusetts will become the 21st U.S. state in which Boston-based DraftKings offers its online sportsbook. Beginning March 10, eligible customers in Massachusetts will have the opportunity to place bets on DraftKings Sportsbook across numerous sports and teams. "It was just over 10 years ago when we launched DraftKings from a spare bedroom in Watertown, and now, we are proud to have the opportunity to deliver a safe and legal sports betting product to millions of diehard sports fans across Massachusetts," said Jason Robins, DraftKings’ co-founder, CEO and chairman. "This launch will mark a major milestone for our company, and we’re proud to become the hometown sportsbook for customers in the Commonwealth."

BETTER LUCK NEXT YEAR: Georgia lawmakers are again thwarting plans to legalize sports betting, rejecting the effort that had been backed by Atlanta’s sports teams and business leaders, MIchael King of CBS News Atlanta reported. The state Senate on Monday rejected a constitutional amendment that would have allowed voters to decide whether to legalize sports gambling, while the state House never took up a bill that would have authorized sports gambling without such an amendment. The failure of the bills Monday, the deadline for bills to pass out of their original chamber and "cross over" to a new chamber, means it’s improbable that any sports gambling measure will pass this year.

MACAU AND VEGAS: BofA told investors that Macau is recovering faster than anticipated driven by "strong premium" mass play, Macau margins could surprise to the upside given lower employee counts, but operators still see the market more as a revenue story than a cost story in the medium term, the firm noted. Vegas demand and domestic margins are stable despite inflation headwinds elsewhere. Early dynamics appear to favor Wynn and MGM Resorts, according to the firm. Wynn pre-announced January and February Macau revenues of $391-395M & property EBITDA of $94-98M, implying margins of approximately 24-25% vs. our 22.5%. Additionally, according to BofA, Las Vegas fundamentals are as good as any time post-COVID, with March setting up to be one of the best months ever aided by NCAA events and entertainment). Despite recent ADR records on the Strip recently, further upside can come from groups/conventions and robust events. Costs seem manageable, despite an upcoming union contract negotiation and inflation pressures hotel operators are calling out.

10,000: Entain (GMVHF) has hit the milestone of 10,000 games available on the Entain Platform across slots, table games, live casino, and non-traditional, skill-based games. With a record number of active customers, growing by 7% in 2022, Entain’s customers are flocking to the group’s brands as it continues to broaden its product offering. In 2022 alone, Entain added almost 2,500 new games to its brands globally, including BetMGM in the U.S. That is at least 35% more than the prior year, compounded by the opportunity in Ontario, Canada, and Entain’s rapid growth across regulated markets. Last year, seven out of 10 customers played one of the new games that were added to the Entain Platform. Meanwhile, across the pond, Entain doubled the content available to BetMGM customers in regulated US states, and over a quarter of BetMGM’s gaming revenue last year came from new games.

IGAMING CONFERENCE: As operators push towards EBITDA profits beyond 2023 the future legs of growth will center on products development along with structural improvements in win margins, Morgan Stanley told investors in a research note. While investor conversations have largely centered on the pace of promotions, higher parlay mix as a percent of bets should be drivers of higher win margins. One operator highlighted newer state cohorts have adopted higher margin products at a higher rate than earlier states, which should provide an upward lift to win rates. For example, hypothetical win rates on live games typically run 5-7%, but parlays can run 10%-30% depending on legs.

GENIUS SPORTS EARNINGS: Genius Sports reported mixed fourth quarter results earlier today. "Our 2022 results demonstrate our commitment to executing the financial and strategic plan we outlined in our Investor Day at the start of 2022, and we have successfully delivered on our forecast each quarter," said Mark Locke, Genius Sports Co-Founder and CEO. "We remain relentlessly focused on balancing investment in our highest growth initiatives, while still demonstrating the unique operating leverage of our business model. Following our consistent execution in 2022 and the maturation of our technology investments, the stage is now set for 2023 to capture the immense opportunity ahead of us, afforded by the global competitive position we have built to-date." The company also provided FY23 revenue guidance that came in just a hair shy of analyst’s consensus. Shares were down 4% in pre-market trading.

ANALYST COMMENTARY: Argus upgraded DraftKings to Buy from Hold with a $22 price target. The firm expects DraftKings’ revenue to increase to $3.1B in 2023 from $323M in 2019 as more states legalize online sports betting and consumers allocate more of their income to wagers, the analyst tells investors in a research note. Argus is confident in DraftKings’ long-term growth prospects given its declining customer acquisition costs and ability to grow at 20% or higher over the next several years.

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) and Wynn Resorts (WYNN).

Keywords: content, launch, expansion, NBA, repurchase, Red Sox, New Jersey, Massachusetts, Georgia, sports betting, legislation, legal sports gambling, Macau, Las Vegas, games, iGaming, win rate,