Bet On It: Sports betting may be back in Florida with appellate court ruling

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: Churchill Downs (CHDN) announced that the company has not renewed the management agreement for Lady Luck Casino Nemacolin in Farmington, Pennsylvania and has completed the sale of substantially all of its assets at Lady Luck Nemacolin to Woodlands Fayette, LLC for an immaterial sum. Woodlands Fayette, LLC manages Nemacolin Resort and will manage Lady Luck Nemacolin effective immediately. All of the employees of Lady Luck Nemacolin were offered positions by Woodlands Fayette.

Nevada reported May statewide gaming win was down.84% to $1.29B. Nevada also reported Las Vegas Strip gaming win down 2.12% versus last year to $715.99M in May.

DraftKings (DKNG) announced on Wednesday that the company is no longer pursuing the acquisition of the U.S. business of PointsBet (PBTHF).

Blackstone (BX) is weighing offers for half of its interest in the real estate of the Bellagio hotel in Las Vegas, though it hasn’t committed to a sale, Bloomberg’s Christopher Palmeri and Kamaron Leach reported. Blackstone acquired the property nearly four years ago for $4.25B, the report noted, adding that Bellagio is operated under a long-term lease by MGM Resorts (MGM).

Super Group (SGHC) announced that it has been added to the Russell 2000 Index.

International Game (IGT) announced that the company reached an agreement with Dreamscape Companies to provide its IGT Advantage casino management system to the Rio Hotel & Casino starting Q4 of this year. In addition to deploying the IGT Advantage system, Rio Hotel & Casino will leverage IGT’s M5 content delivery solution to run Random Riches and Lucky Coin bonuses, IGT’s Mobile Host and Mobile Responder employee convenience apps will elevate customer service, while the Taxable Accrual solution will help optimize player self-service jackpot processing. Separately, its subsidiary, IGT Global Services, has signed a cross-licensing agreement with FDJ Gaming Solutions France, a subsidiary of FDJ Group which delivers B2B betting services, distribution services and interactive services for the gaming industry.

A WIN FOR FLORIDA SPORTS BETTING: A federal appellate court on Friday overturned a lower court ruling that thwarted the agreement that gave the Seminole Tribe a monopoly on sports betting in Florida, Mary Ellen Klas of the Miami Hearald reported.. A three-judge panel on the U.S. Court of Appeals for the District of Columbia Circuit unanimously concluded that federal gaming law allowed the state to enter into a 30-year agreement with the Seminole Tribe to control sports betting in Florida, add roulette and craps to the tribe’s casino operations and in return pay the state at least $2.5B over the first five years of the deal. In November 2021, Judge Dabney L. Friedrich of the U.S. District Court in the District of Columbia invalidated the deal, siding with West Flagler Associates, the former owners of Magic City Casino and current owners Bonita Springs Poker Room. It argued that the tribe’s sports betting and casino expansion deal violated federal Indian gaming law because, to get around a Florida constitutional amendment that prohibits the expansion of gambling outside of tribal land without voter approval, the agreement required the tribe to operate a so-called hub-and-spoke model for sports betting. The process moves all online sports bets from players located outside of tribal lands through the tribe’s servers.

ANALYST COMMENTARY: Susquehanna raised the firm’s price target on DraftKings to $39 from $36 and maintained a Positive rating on the shares. The firm now forecasts Q2 revenue and EBITDA of $790M and $25M, respectively, following DraftKings’ standout quarter-to-date performance, Susquehanna told investors in a research note.

Macquarie initiated coverage of Gambling.com (GAMB) with an Outperform rating and $13 price target. The firm said the company’s “unique” media offering, media assets and partnerships provide the potential for double-digit growth. Gambling.com’s scale, acquisitions and key partnerships with McClatchy and Gannett will help the company double its market share in North America over the next few years, Macquarie  told investors. The firm expects Gambling.com to outpace market growth in all regions, particularly in North America.

Stifel raised the firm’s price target on International Game to $38 from $32 and kept a Buy rating on the shares after revisiting International Game’s recently announced review of strategic alternatives for the Global Gaming and PlayDigital businesses following talks with industry participants and investors. The firm argues that there is “a larger set of addressable buyers than intuition would suggest,” that global gaming margin expansion potential and positioning for the hyper-growth iCasino content opportunity make International Game “an attractive target for both financial & strategic buyers,” that a standalone lottery business should re-rate higher and that a potential sale likely reads favorably for Buy-rated PlayAGS (AGS) and Everi Holdings (EVRI).

Melco Resorts & Entertainment (MLCO) was downgraded to Neutral from Buy at BofA.

JPMorgan raised the firm’s price target on Las Vegas Sands (LVS) to $72 from $71 and reiterated an Overweight rating on the shares. The firm increased Macau property level EBITDA estimates heading into Las Vegas Sands’ Q2 report next month and the release of June market-wide Macau gross gaming revenues. JPMorgan sees improved quarter-to-date trends, which it believes have largely outperformed investor expectations during a historically seasonal weak period between Golden Week and peak summer travel. JPMorgan sees little risk to Las Vegas Sands’ Macau recovery for the remainder of June as it hosts Jacky Cheung concerts at its Cotai Arena every Friday and Saturday.

Lake Street Capital Markets noted that it views Football DataCo as Genius’s Sports (GENI) most important league relationship, so last week’s news is an “obvious positive.” The firm told investors that the extension is evidence of Genius’s ability to take raw, in-game data and turn it into something useful for broadcasters and fans and is a winning strategy for maintaining league relations. Lake Street Capital Markets contends Genius is staying ahead of competition in using technology to drive value for leagues, teams, broadcasters, sponsors, and fans. The agreement shows the relationship is “sticky,” and it gives Genius another year to ingrain its technology into the FDC ecosystem.

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).