Bet On It: Ohio surpasses $1B spent on sports betting in first month

Melco and Accel report fourth quarter earnings, Kentucky may be next to introduce legislation, 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: Macau’s gaming bureau reported February gross revenue from games of fortune in the region was up 33.1% year-over-year to 10.32B patacas. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).

MGM Resorts (MGM) and BetMGM, a joint venture between MGM Resorts and Entain (GMVHF), announced a five-year contract extension with the British Columbia Lottery Corporation, or BCLC, and its responsible gaming program, GameSense. The program, which BCLC first licensed to MGM Resorts in 2017, enhances MGM Resorts’ and BetMGM’s guest and customer service models by focusing on conversations with players about how to gamble responsibly. IN a separate announcement, MGM Resorts and BetMGM launched MGM Riches, the companies’ first custom slot experience that can be played both online via BetMGM and as a traditional slot game at MGM Resorts properties throughout the U.S. Developed in collaboration with Everi Holdings (EVRI), MGM Riches is a multi-denomination, multi-level progressive slot game offering players two themes – ‘MGM Riches Triple Ruby’ and ‘MGM Riches 5x Sapphire.’ Gameplay is consistent whether in-person at 15 MGM Resorts destinations across the country or online via BetMGM’s iCasino platform in Michigan, New Jersey and Pennsylvania. The game is scheduled to launch in West Virginia in the near future.

In a regulatory filing, Boyd Gaming (BYD) disclosed that its CEO Keith Smith sold 100K shares of common stock on February 27 in a total transaction size of $6.48M.

Nevada reported January statewide gaming win up 17.99% to $1.27B and that Las Vegas strip gaming win was up 25.74% to $713.22M versus last year.

Bragg Gaming (BRAG) announced that it has launched its new content and Remote Game Server, or RGS, technology with Caesars Sportsbook & Casino (CZR) in New Jersey. The launch expands the reach of Bragg’s new proprietary content in the U.S. and further demonstrates continued progress for the company’s North American expansion strategy. The roll-out of Bragg’s new content with Caesars in New Jersey extends an existing collaboration between the two online gaming companies in North America as Bragg also provides iGaming content to Caesars’ players in New Jersey and Michigan through its Spin Games RGS. In addition, the company launched its new content and RGS technology with Caesars in Michigan last year. According to H2 Gambling Capital, the interactive casino market in New Jersey is on track to generate $1.8B in gross win in 2023.

OVER A BILLION: Bettors across Ohio spent $1.1B on sports gambling in January, the first month sports gambling was legal in the state, according to Max Filby of The Columbus Dispatch, citing figures released by the Ohio Casino Control Commission on Tuesday. Those bets translated to $208.9M in revenue for sportsbooks across the state. Ohio has a 10% tax on sports betting revenue, meaning the state made approximately $20.89M in tax revenue from January wagers. Ohioans walked away with more than $883.6M in winnings, data shows. Sportsbooks also gave away nearly $320 million in promotional credits, many of which were advertised to prospective gamblers for months throughout Ohio

BLUEGRASS STATE BILL: Kentucky Representative Michael Meredith believes the sports betting legislation he is sponsoring has a strong chance this year, Pat Evans of Legal Sports Report reported. Despite the state’s legislative session concluding at the end of March, Meredith is “cautiously optimistic” his bill will be signed into law. The House Licensing, Occupations & Administrative Regulations Committee will reportedly hear his HB 551 next week. Meredith feel like he has the 60 House votes to achieve the three-fifths majority required in odd-numbered years. Should it pass the House, Senate Majority Leader Damon Thayer told LSR he is ready to advocate for the legislation in his chamber. According to Evans, Meredith said legislators could work on the bill during the 10-day veto recess before the final days of the session since Governor Andy Beshear is a sports betting backer. “We get a little bit longer runway,” Meredith said. “I think there is plenty of time to get it done.”

EARNINGS RECAP: Melco Resorts fell shy of analyst expectations in its fourth quarter earnings release both in terms of earnings per share and revenue. Despite more relaxed travel restrictions in China and Macau, the company still noted the impact of such limitations. Lawrence Ho, CEO, commented, "Our results for the fourth quarter of 2022 continued to be impacted by the travel restrictions imposed across mainland China and Macau. However, we are encouraged by the increased visitation and volume that we have seen since the travel restrictions between mainland China and Macau were relaxed on January 8, 2023. Our recent performance reinforces our belief in the return of pent-up demand and our view that Macau will continue to develop as a leading international destination for entertainment and leisure. We are honored to have been awarded a gaming concession to continue to operate in Macau for the next 10 years. We greatly appreciate the consideration given to our proposal and our investment propositions that we believe will continue to build on our existing strengths in entertainment and non-gaming attractions. We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau, and will continue to work with the Macau government, the community, and stakeholders to contribute to the city’s development as a leading global tourism destination."

Accel Entertainment (ACEL), on the other hand, surpassed analyst consensus in its Q4 report. The company ended 2022 with 3,598 locations; an increase of 39% compared to 2021 and 23,150 gaming terminals; an increase of 70% both due primarily to the acquisition of Century Accel CEO Andy Rubenstein commented, “We are pleased to report another strong quarter of results which led to a record full year 2022. The integration of Century is well underway and we remained focused on continuing to grow our business both organically and inorganically. Our asset-light and hyper-local business model remains compelling and continues to give us a truly unique competitive advantage in the industry as we further cement Accel’s position as the preferred choice in distributed gaming.”

ANALYST COMMENTARY: Morgan Stanley raised the firm’s price target on Flutter Entertainment (PDYPY) to 16,400 GBp from 16,100 GBp and reiterated an Overweight rating on the shares. In addition, JPMorgan analyst Estelle Weingrod lowered the firm’s price target on Flutter Entertainment to 15,100 GBp from 15,900 GBp and keeps a Neutral rating on the shares.

Susquehanna raised the firm’s price target on Churchill Downs (CHDN) to $286 from $283 and maintained a Positive rating on the shares. The analyst said we think the stock’s primary value drivers are the underlying performance of its core HRM assets in Kentucky and Virginia in particular, and the timing of when its aggregate $1.9B in capital projects layer- into earnings.

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: revenue, responsible gaming, Las Vegas Strip, gaming win, content, launch, sports gambling, Ohio, first month, Kentucky, legislation, HB 551, earnings