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: Oryx Gaming, a Bragg Gaming (BRAG) company, has introduced its content in the UK for the first time after going live with 888casino just weeks after receiving its supplier license in the country, the company announced. A selection of games from Oryx's exclusive RGS offering have been added to 888casino in the UK including games developed by Oryx's in-house studio and titles from Gamomat. Egyptian Magic, the debut title from Bragg's soon-to-launch proprietary game development studio, Atomic Slot Lab, will also be made available to local players.
MGM Resorts (MGM) is rolling out its reimagined loyalty rewards program, MGM Rewards, on February 1, unlocking access for both gaming and non-gaming guests to the company's 20-plus destinations across the country, offering more ways to earn and new benefits. "For the first time, non-gaming customers will join their gaming counterparts and have the benefit of earning a currency - MGM Rewards Points - redeemable for complimentary food and beverage, entertainment, hotel stays and more. All members can now earn Points on nearly all expenditures at MGM Resorts destinations, integrating both non-gaming and gaming activity," the company has said.
Macau's gaming bureau reported December gross revenue from games of fortune in the region was up 1.8% year-over-year to 7.962B patacas.
Elys Game Technology (ELYS) announced the voluntary delisting of its common shares from the NEO Exchange in Canada as part of the company's corporate strategy. The company has voluntarily delisted from the NEO at the close of trading on Wednesday, December 29, 2021, and its shares of common stock will continue to be listed and trade on Nasdaq under the symbol ELYS. "We are very grateful for the extraordinary professionalism of the team and leadership of the NEO Exchange in giving Elys the opportunity to list our common shares in Canada," stated Michele Ciavarella, Executive Chairman of Elys.
START SPREADING THE NEWS: The NYS Gaming Commission announced that four licensed mobile sports wagering operators - Caesars Sportsbook (CZR), DraftKings (DKNG), FanDuel (PDYPY), and Rush Street Interactive (RSI) - have satisfied all statutory and regulatory requirements necessary to accept and process mobile sports wagering activity and have been approved to commence operations with launch effective no earlier than Saturday, January 8 at 9 a.m. Eastern Standard Time. After that effective date, each licensee will determine when to accept wagers, based upon its business capabilities and readiness. The remaining five conditionally licensed mobile sports wagering operators continue to work towards satisfying statutory and regulatory requirements necessary to launch and will be approved on a rolling basis when requirements are met. Operators have each paid a $200M license fee have agreed to pay a 51% tax on gross revenues to the state of New York. The five operators yet to meet requirements are BetMGM, Bally’s Corp. (BALY), Wynn Resorts (WYNN)., PointsBet (PBTHF) and Resorts World.
BULLISH THESIS REMAINS: Craig-Hallum analyst Ryan Sigdahl told investors that “profitless prosperity” for online sports betting in the U.S. market has become an increasing concern amongst investors but believes these concerns are overblown when looking at early years in markets like the U.K and comparing to the long-term opportunity in the U.S. The analyst lowered price universally on stocks for which he uses 2030 estimates discounted back, primarily for a higher discount rate and lower EBITDA multiple given assumption of higher interest rates and increased uncertainty from current marketing/promotional spend. Sigdahl concluded that the bullish thesis on the sector remains. He rates shares of DraftKings, Penn National (PENN), and Rush Street Interactive a Buy. On the other hand, Sigdahl lowered his price targets across some companies primarily in the online gambling space as he assumes a higher discount rate with interest rates set to rise, and trims the long-term EBITDA multiple assigned. He rates shares of Genius Sports (GENI) and Sportsradar (SRAD) a Buy, and Gan Limited (GAN) a Hold.
COLORADO HIGHLIGHTS BIG MONTH FOR U.S. SPORTS BETTING: The Colorado Division of Gaming released their November 2021 monthly sports betting figures. The total online handle for November was down slightly to $469M compared to $483M in October 2021. However, total online gross gaming revenue was up to $36.6M compared to $28.2M in October 2021. Total online handle and GGR in November were up 106.7% year-over-year and 107.3% year-over-year, respectively. Total online handle and GGR both made up over 98% of the total wagers placed in November, with a total online win percentage of 7.8%. In November, total online sports wager declined 3% from October. American professional football was the top sport bet on with $138M in total wagers, while basketball holds 26% of the total wagers and NCAA Basketball rounding out the top three. Benchmark analyst Mike Hickey noted football saw a solid rebound in their Hold percentage, jumping just above 10% for November vs. 4% in October and above their November 2020 Hold of 8%. Matthew Waters of Legal Sports Report noted that Colorado lets operators deduct promotional spending, so after the $17.4M deducted in November, Colorado was left with $19.3M in taxable revenue. The majority of November’s record revenue came from parlays. Bettors wagered $83.8M on parlays with operators keeping $17.1M, or a 20.4% hold. Notably, this month already set a new U.S. sports betting monthly revenue record despite there being three states left to report November figures. Reported revenue stands at $588.2M, which is up 123.1% from November 2020. Arizona, Delaware and Illinois are yet to report.
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).
