Welcome to The Fly's latest edition of "Friday Parlay", where we look at news and activity in the sports betting and iGaming space.
LATEST SECTOR NEWS: Jefferies analyst David Katz downgraded Wynn Resorts (WYNN) to Hold from Buy with a price target of $81, down from $111, on Friday, citing what he expects to be an "elongated," more protracted Macau recovery and leverage that he sees limiting growth and returns compared to peers. Meanwhile, Morgan Stanley analyst Thomas Allen raised the firm's price target on Caesars (CZR) to $68 from $54 and kept an Overweight rating on the shares as he gives it credit for more permanent margin improvement with regional casinos' revenue and cost execution tracking ahead of expectations. Recent preannouncements from the company and peer Penn National (PENN) showed significant cost savings execution continued through Q3, noted Allen, who has also raised his price target on Penn shares to $63 from $55.
Also this week, DraftKings (DKNG) and Turner Sports entered into a multi-year agreement making the digital sports entertainment and gaming company the exclusive sportsbook and daily fantasy sports provider across select Turner Sports and Bleacher Report properties, excluding NBA programming.
NEW JERSEY SETS NEW RECORD: Craig-Hallum analyst Ryan Sigdahl reiterated Buy ratings on DraftKings, Gan Limited (GAN), Scientific Games (SGMS), and Penn National on Thursday after September sports betting wagers in the state of New Jersey exceeded last month's records with a "packed" sports calendar. Sigdahl noted that sports betting revenue in the state grew 14% month-over-month and 19% year-over-year, while wagers taken were another record at $749M, up 12% month-over-month and 68% year-over-year. The analyst believes that strong online results will further encourage prospective states to legalize iGaming as budget deficits increase and traditional casino tax revenues decline.
New Jersey's Division of Gaming Enforcement reported that total gaming revenue for September was $323.3M, compared to $303.5M in September 2019, reflecting a 6.5% increase. Internet gaming win was $87.6M in September, compared to $41.1M in the prior period, reflecting an increase of 113.0%. Sports wagering gross revenue was $45.1M for the month. Casino win for September was $190.6M, decreasing 15.1% from the same month last year. During September, the casinos operated with certain restrictions due to COVID-19, the DGE noted.
MICHIGAN GRANTS IGAMING LICENSE: Nevada-based gaming supplier Spin Games was granted a provisional internet gaming supplier license by the Michigan Gaming Control Board, Casino Beats reported. The receipt will enable the firm to deploy its proprietary and third-party iGaming content across Michigan’s licensed casino operator online sites, once internet gaming goes live. Michigan's timetable to legalize iGaming has reportedly been sped up due to COVID-19 restrictions in-person sportsbooks. The Detroit News reported that the head of the Michigan Gaming Control Board said that online gambling and sports betting could go live by late fall.
States that have legalized sports betting include Arkansas, Colorado, Delaware, Illinois, Indiana, Iowa, Michigan, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New York, New Mexico, Oregon, Pennsylvania, Rhode Island, West Virginia and Washington, D.C.
SPORTS BETTING ABROAD: The Regional Council of Darmstadt finally issued Germany's first federal sports betting licenses, according to iGaming Business. A total of 15 licenses had been awarded, with the council acting promptly after a court got rid of an April judgement that forced a halt to the licensing process. GVC Holdings (GMVHF) secured four online-only licenses for its brands. Other online-only licensees are BetVictor – which will also run sites branded for tabloid newspaper Bild – Greenvest Betting’s Neo.bet, Bet365 and Jaxx.
PUBLICLY TRADED COMPANIES IN THE BETTING SPACE INCLUDE: Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (PDYPY), Gan Limited (GAN), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn National (PENN), William Hill (WIMHY) and Wynn Resorts (WYNN).
