Welcome to The Fly's latest edition of "Bet On It," where we look at news and activity in the sports betting and iGaming space.
POLLS WELCOME LEGAL SPORTS BETTING: Maryland, South Dakota and Louisiana are the latest states to approve sports betting. AP News noted that the successful ballot measures set up a situation where more than half the country could have legal sports betting by the end of next year. This comes three years after a U.S. Supreme Court ruling paved the way for all 50 states to adopt it. As more states push forward with legal sports betting, operators looking to get licensed are plentiful.
David Bain of Roth Capital noted a clear legislative gaming sweep is boon for the acceleration of sports wagering expansion and certain casino companies. The analyst said, "We believe wins also demonstrate casino gaming as continually/increasingly mainstream and a common, relatively bi-partisan budgetary bullet option for politicians/municipalities - generally positive for casino industry stock multiples." In Virginia, a state that is looking at an early 2021 sports betting launch, Lottery Director Kevin Hall said that an early 2021 sports betting launch remains the goal, while Deputy Director of Gaming Compliance Gina Smith said the Lottery got a “significant” number of sports betting applications during its two-week window, according to SportsHandle. The Lottery has not released the names of applicants, but reportedly players like BetMGM (MGM), DraftKings (DKNG), and FanDuel (PDYPY) are likely among them. Additionally, Caesars (CZR) and Rush Street Interactive (DMYT) already have casino partners in the state, so retail and mobile sports betting could potentially follow.
Q3 EARNINGS MISS: Both Caesars and Wynn Resorts (WYNN) reported Q3 earnings on Thursday night. The two companies fell short of Street estimates and shares were down for both operators after market close.
Caesars reported Q3 net losses of $926M compared to net income of $37M for the comparable prior-year period. Tom Reeg, CEO of Caesars, commented, "Our third quarter was a busy period for the company. We officially closed our merger with Former Caesars on July 20, 2020. We announced a recommended offer to acquire William Hill plc on September 30, 2020 and successfully raised $1.9 billion of new equity that closed on October 1, 2020. Additionally, 55 out of our 56 properties have now reopened and operating results continue to improve sequentially. Regional markets continued to outperform destination markets and we remain optimistic regarding an eventual recovery of travel and tourism in the U.S. and especially in Las Vegas."
Wynn Resorts is still feeling the impact from safety measures being taken in Macau as a response to COVID-19. "On the development front, we have made substantial progress advancing Wynn Interactive, our majority owned sports betting and online gaming subsidiary. During the third quarter, we launched online sports and casino offerings in New Jersey to an encouraging initial customer response. Beyond New Jersey, we have secured market access in numerous other states, and are in the process of applying for licenses on a standalone basis in Tennessee and Virginia. We are also in discussions with potential partners regarding additional access agreements in other jurisdictions. Our nationally-recognized brand and unique product-led strategy position us well to generate our fair share of this important, fast-growing business over the coming years," Matt Maddox, CEO of Wynn Resorts said.
MACAU OPERATORS LOOK FOR REGIONAL RECOVERY: Macau showed signs of recovery in October compared to a 90% drop in revenues in September. Macau's gaming bureau reported October gross revenue from games of fortune in the region decreased 72.5% year-over-year to 7.27B patacas. Maddox said, "... In Macau, visitation restrictions have begun to gradually and thoughtfully ease, allowing us to achieve EBITDA break-even in October. We are confident that Macau will continue to benefit from the return of consumer demand as we head into 2021."
PUBLICLY TRADED COMPANIES IN THE 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).
