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: Caesars Entertainment (CZR) announced its Caesars Sportsbook app is officially available for download and sign-up by eligible sports fans in Louisiana.

Drive by DraftKings has announced that it has raised its first venture fund of $60M, which is backed by high-profile owners, organizations, investors and athletes across the sports and entertainment industries. Raised in just six months, the fund is oversubscribed by 20% with notable investors including: The Kraft Group (New England Patriots), Jones family (Dallas Cowboys), DraftKings (DKNG), Todd Boehly (Los Angeles Dodgers, Los Angeles Lakers, Los Angeles Sparks), Madison Square Garden Sports (MSGS)  Madison Square Garden Entertainment (MSGE), Arctos Sports Partners and Mike Gordon (Fenway Sports Group), the company stated.

Las Vegas Sands (LVS) reported a Q3 earnings miss on Wednesday, falling short of analyst expectations. While both EPS and revenue came short of the mark, the company pointed to increased COVID-19 restrictions. "While heightened pandemic-related restrictions impacted our financial results this quarter, we were able to generate positive EBITDA in each of our markets. We remain enthusiastic about the opportunity to welcome more guests back to our properties as greater volumes of visitors are eventually able to travel to Macao and Singapore," said Robert Goldstein, chairman and CEO. "We also remain deeply committed to supporting our team members and to helping those in need in each of our local communities as they recover from the impact of the COVID-19 pandemic." "We remain confident in the eventual recovery in travel and tourism spending across our markets. Demand for our offerings from customers who have been able to visit remains strong, but pandemic-related travel restrictions in both Macao and Singapore continue to limit visitation and hinder our current financial performance." The company's consolidated adjusted property EBITDA of $47M did come in significantly higher year-over-year though. Deutsche Bank analyst Carlo Santarelli lowered the firm's price target on Las Vegas Sands to $65 from $73 and keeps a Buy rating on the shares post the Q3 results. The analyst believes Las Vegas Sands has a favorable medium- to longer-term risk/reward profile, but he sees uncertainty created by the concession / gaming law process and Covid-19 policies.

Scientific Games (SGMS) announced that the Missouri Lottery has awarded it a new, five-year primary contract with option to extend for up to five years. Scientific Games has been the Missouri Lottery's primary instant game supplier since its start-up in 1986. The company launched the Missouri Lottery's first digital player loyalty rewards program in 2012.

Penn National Gaming (PENN) announced that it has completed its previously announced acquisition of Score Media and Gaming (SCR) for total consideration of approximately $2.0B in cash and stock. The Class A shares of theScore will be delisted from the Toronto Stock Exchange and theScore intends to apply to cease to be a reporting issuer in Canada.

In a notice to the London Stock Exchange, DraftKings noted the announcement made by Entain (GMVHF) relating to the extension of the deadline, under Rule 2.6 of the City Code on Takeovers and Mergers, for DraftKings either to announce a firm intention to make an offer for Entain in accordance with Rule 2.7 of the Code or to announce that it does not intend to make such an offer in accordance with Rule 2.8 of the Code to 5:00 p.m. London time on November 16, 2021. "DraftKings will continue to engage in discussions between both companies and to conduct more substantive due diligence and analysis regarding its possible offer. DraftKings looks forward to exploring potential benefits that could derive from this possible combination for its and Entain's shareholders, including: Expansion into regulated and regulating markets; Accelerated product growth; Innovation in new and existing verticals. DraftKings further notes that while it progresses its discussions with Entain, it also continues to remain very focused on opportunities in the high growth North America market. This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the Code. There can be no certainty that an offer will be made nor as to the terms on which any offer will be made. A further announcement will be made as and when appropriate," DraftKings stated.

The Mashantucket Pequot Tribal Nation, Foxwoods Resort Casino and DraftKings announced that online and mobile sports betting and online casino launched in Connecticut after successfully completing the required soft launch testing which began a week ago. Now all customers 21 years of age and older in the state of Connecticut can place a variety of sports bets and play casino games such as slots, blackjack and roulette using the co-branded Foxwoods and DraftKings Sportsbook and Casino app on their mobile device. The Mashantucket Pequot Tribal Nation and DraftKings will be holding a virtual press briefing to officially kickoff and welcome online sports betting and iGaming across the state.

SEPTEMBER WEAKER THAN EXPECTED: As more states finish reporting sports betting data for September, the nationwide pictures has become more clear. Roth Capital analyst Edward Engel noted as states report sports betting and iGaming data for September, some investors are beginning to acknowledge downside risks to the second half of 2021 outlook. While the NFL season boosted online sports betting handle from this summer's lull, he doesn't believe the lift is enough to meet 2H21 forecasts, particularly in Q4, Engel told investors in a research note. As state data continues to roll in, he expects more investors to bring down Q4 numbers as industry momentum appears to be slowing, the analyst added.

In New Jersey, based upon filings with the Division of Gaming Enforcement, total gaming revenue for September was $453.6M compared to $323.3M in September 2020, reflecting a 40.3% increase. Casino win for September was $248.5M compared to $190.6M in September 2020. Internet gaming win was $122.6M in September compared to $87.6M in the prior period, reflecting an increase of 39.9%. Sports wagering gross revenue was $82.4M for the month. For the year-to-date period, the industry's total gaming revenue was $3.44B compared to $1.94B, reflecting an increase of 77.4%. Internet gaming win increased 44.2% to $988.7M when compared to the prior period. Sports wagering gross revenue was $557.8M. Casino win for the period was $1.9B.

While there was sequential improvement in a lot of major states, Engel said the results were still not up to par. "We believe growth rates in major states were disappointing, where these 2-3yr old markets should not be slowing relative to underlying seasonality," he said. He also noted that in a situation where Q4 results miss his firm would need to revisit 2022 estimates.  In that scenario, we'd prefer being short as investors question whether growth might be closer to maturity than previously expected, Engel told investors. The analyst concluded that names like Rush Street Interactive (RSI) and Penn National (PENN) shares are more insulated from a reduction in industry forecasts. 

Craig-Hallum analyst Ryan Sigdahl, on the other hand, called Q3 sports betting and iGaming industry growth strong. However, the analyst points out that aggressive spending has caused a divide in investor sentiment. The analyst wrote to investors that he sees a clear deviation happening in spend: DraftKings/Caesars/PointsBe (PBTHF) continue to aggressively spend and focus on user growth, FanDuel (PDYPY)/MGM (MGM) a bit more moderate while maintaining leadership in OSB and iGaming, respectively, IN a research note to investors, Sigdahl summed up the lay of the land for operators as follows:

• Penn National and Barstool Sportsbook are gaining market share despite more disciplined spend
• DraftKings taking share Of handle, but spending and promoting aggressively
• FanDuel remains a leader but lost a little market share sequentially
• Rush Street Interactive maintaining market share despite lower spend
• Strong first month of NFL is good for Genius Sports (GENI)

U.S. GAMING MARKET RECOVERY: Zachary Silverberg of Berenberg initiated coverage of five gaming stocks with Buy ratings on Tuesday, calling the market flush with opportunity. The companies were Penn National, Churchill Downs (CHDN), International Game Technology (IGT), Scientific Games and FuboTV (FUBO).  Silverberg said he expects his firm's coverage universe will benefit from the growing market recovery in retail gaming and improving social outlook surrounding other gaming sector segments like digital and sportsbook. The analyst noted a preference for names with "strong growth profiles" and conservative balance sheets that "appear to be undervalued." Silverberg told investors based on findings from Berenberg's proprietary survey, and the rebound in casino revenue and customer spend per visit, he believes that retail gaming has recovered and strengthened beyond pre-pandemic levels with further upside potential given the anticipated growth in 2022.

FLORIDA DEFEATS FIRST LAWSUIT: A federal judge has struck down a lawsuit filed against Governor Ron DeSantis and the Seminole Tribe over the gaming compact signed in the Spring, Mary Ellen Klas of Tampa Bay Times reported. This ruling has provided the state a win with the first of three legal battles for sports betting in Florida. U.S. District Court Judge Allen Winsor ruled on Monday that West Flagler Associates, which owns Magic City Casino in Miami and Bonita Springs Poker Room, did not have the right to sue the state because it could not prove that the compact negatively affected the parimutuels. “The Parimutuels point to nothing that the Secretary does under the Compact that enables the Tribe to offer online sports-betting,” Winsor ruled. Gary Bitner, a spokesperson for the Seminole Tribe, called the ruling “an important first legal victory for the State of Florida and the Seminole Tribe and we look forward to future legal decisions in our favor.” While the first lawsuit victory remains important, there are still two other pending lawsuits attempting to thwart sports betting in the Sunshine State. In September, West Flagler Associates reportedly filed a lawsuit against U.S. Secretary of the Interior Deb Haaland, asking that court to enjoin the sports-betting portion of the state’s compact with the Seminole Tribe of Florida. West Flagler alleges that the 30-year agreement with the state illegally violates federal law, specifically the Indian Gaming Regulatory Act, which requires that any state-sanctioned gambling occur on tribal land.In the federal court effort to stop the expansion of gambling in Florida are business leaders Armando Codina and Norman Braman and the No Casinos organization. Codina and Braman came together with No Casinos in its attempt to pass Amendment 3 to the Florida Constitution in 2018, which requires that any expansion of gambling get statewide voter approval.

SLOW AND STEADY IN MARYLAND: Pat Evans of Legal Sports Report reported that two additional casinos are making progress in the Maryland sports betting process, but mobile sports betting talk remains minimal. The Maryland Lottery and Gaming Control Commission approved Ocean Downs Casino and Hollywood Casino for alternative licensing standards on Thursday. The casinos have already obtained Maryland gaming licenses. They join three other casinos waiting for the Sports Wagering Application Review Commission, or SWARC, to award Maryland sports betting licenses. The retail sportsbooks can then open once the Maryland Lottery and Gaming Control Agency approves their internal controls and operational requirements. The SWARC had originally scheduled to meet October 14, but postponed without rescheduling a new date. The postponement delayed the potential licensing of three casinos that received alternative licensing standards on October 6 including: MGM National Harbor, Horseshoe Casino Baltimore and Live! Casino and Hotel Maryland. MLGCA Director John Martin said he expected retail sportsbooks to open by late fall 2021. When the SWARC might award the five casinos awaiting approval is still up in the air.

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 National (PENN), Rush Street Interactive (RSI), Scientific Games (SGMS), Score Media (SCR) and Wynn Resorts (WYNN).