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: BetMGM, a joint venture between Entain (GMVHF) and MGM Resorts (MGM), announced a new pledge to prominently feature responsible gaming messages in its marketing and advertising campaigns beginning March 1, in alignment with the start of Problem Gambling Awareness Month. As part of the pledge, responsible gaming messaging will be featured within BetMGM's mobile app and within BetMGM advertisements ranging from billboard marketing to television, print and radio ads across the U.S. and Canada.

Elys Game Technology (ELYS) announced that the company has entered into an agreement with Partnersat7238thstse to operate a sportsbook at The Ugly Mug restaurant and bar situated at 723 8th St SE, in Washington, DC. "We are delighted to partner with Gaynor Jablonski and his team to operate a sportsbook at The Ugly Mug restaurant and bar conveniently located only blocks from Nationals Stadium in Washington, DC," stated Michele Ciavarella, Elys executive chairman. "By fostering partnerships in local establishments such as The Ugly Mug, Elys brings together vibrant environments with a professionally managed sports betting enterprise. This combination can connect fans and friends together to revel in sports events while enjoying a meal and beverage. We firmly believe that this successful combination can contribute economic benefits to small business entrepreneurs across the nation and boost resources for state and local amenities and infrastructure."

SHIPPING OUT OF BOSTON: According to Mike Mazzeo of Legal Sports report, PointsBet (PBTHF) withdrew its application as an online Massachusetts sports betting operator. The Massachusetts Gaming Commission announced the move during a meeting on Thursday. The company's spokesperson said in a statement to LSR, "You will have seen the outcome from the Massachusetts Gaming Commission meeting today where PointsBet made the decision to withdraw its application at this time. We have chosen this path to emphasize our continued focus on our 14 live states of the US (plus Ontario) and how we can best optimize those markets which provide an immense TAM for us to go after. We would like to thank the Massachusetts Gaming Commission for their consideration of our application, conducting extensive hearings, and deeming PointsBet suitable for licensure ahead of the launch of legalized sports wagering in the Commonwealth of Massachusetts."

EARNINGS RECAP: Three companies in the space reported fourth quarter earnings this week Bally's (BALY), Churchill Downs (CHDN) and Caesars (CZR). Bally's reported preliminary Q4 revenue last week and backed its FY23 revenue outlook this week. Robeson Reeves, incoming CEO, said, "As previously reported in our preliminary release of these financial results, we are pleased to have achieved record results in both our Casinos & Resorts and International Interactive segments. Our core businesses continue to generate fantastic cash flows. UK revenue grew 12% organically in the fourth quarter as regulations continue to play through, while in December, Asia saw positive year-over-year organic growth, proving that our initiatives to maintain a competitive advantage in that market are effective. We remain committed to taking a deep dive approach in North America to ensure that investments we make in sports have a near-term path to profitability. In iCasino states, we've increased our market share in both New Jersey and Ontario as we integrate this business in a scalable way." George Papanier, incoming Bally's President, said, "As previously noted, Casinos & Resorts saw continued momentum across the portfolio during Q4. We also broke ground on our temporary facility in Chicago, which we expect will contribute to the business in the second half of 2023. Though Atlantic City generated a loss during a slower Q4, it continues to progress, and we expect the property to be profitable in 2023. Significant capital expenditures toward property improvements will decrease in 2023 as we focus on generating cash flows to invest in long-term growth opportunities for the entire Bally's portfolio. Finally, business momentum continues to be strong into 2023, with no slowdown in the consumer, as we continue to closely monitor market macro dynamics."

Churchill Downs beat analyst expectations on revenue, but came up shy on its adjusted earning per share for Q4. The company noted a record year for revenue, net income and adjusted EBITDA in FY22. Churchill downs completed the acquisition of Peninsula Pacific Entertainment in its most recent quarter. The company said, "Net revenue for the fourth quarter of 2022 {in the Gaming segment} increased $39.4 million from the prior year quarter primarily due to $46.5 million attributable to the New York and Iowa properties acquired in the P2E Transaction and a $7.1 million decrease from seven of our existing wholly-owned properties in five states that was partially offset by growth at our Ocean Downs property in Maryland. Adjusted EBITDA for the fourth quarter of 2022 increased $13.4 million from the prior year quarter driven by a $17.9 million increase attributable to the New York and Iowa properties acquired as part of the P2E Transaction, a $1.2 million increase from our equity investments, and a $5.7 million decrease at our existing wholly-owned properties."

Caesars reported mixed fourth quarter results, but noted Las Vegas and Regional segments as strong points. Tom Reeg, CEO of Caesars, commented, "Our fourth quarter delivered another set of strong operating results as both our Las Vegas and Regional segments each set a new fourth quarter record for Adjusted EBITDA. Additionally, our Las Vegas segment set a new full year record for Adjusted EBITDA. Caesars Sportsbook delivered significantly improved operating results during the fourth quarter which sets the foundation for a strong 2023. Consumer demand remains strong in all of our verticals and we are optimistic for the year ahead." IN its Q4 earnings conference call, Caesars noted that it expects both sports betting and iGaming to be EBITDA positive in FY23. Barclays raised the firm's price target on shares to $70 from $66 and maintained an Overweight rating on the shares. The company's digital profitability target was reiterated and moved earlier than expected, Caesars told investors in a research note. The firm believes Caesars' 2023 free cash flow and 2024 leverage outlooks "also represent upside."

ANALYST COMMENTARY: Barclays initiated coverage of MGM Resorts with an Overweight rating and $59 price target. MGM is a premium diversified global gaming operator at an attractive valuation with "multiple ways to win," including Las Vegas strength, Macau recovery, new project pipeline and elevated share repurchases near-term, the firm told investors in a research note. The firm believes the company has "attractive premium positioning" in Las Vegas as well as U.S. regionals.

Morgan Stanley raised the firm's price target on DraftKings (DKNG) to $22 from $20 and kept an Overweight rating on the shares after raising estimates to reflect the company's Q4 beat, structurally better hold and better cost control. However, the firm is removing DraftKings as a Top Pick given the 80% move higher in shares year-to-date.

B. Riley raised its price target on Caesars to $111 from $102 and reaffirmed a Buy rating on the shares. The firm updated Caesars' valuation by segment, believing using EBITDA versus EBITDAR for valuation is appropriate given better expression of cash flow. At the midpoint, the firm estimates the company's land-based portfolio is worth $91 per share, or 72% higher than Friday's close, implying its digital business carries a negative value. However, Riley estimates the digital value at $20 per share value when using a DraftKings-like valuation. It believes shares of Caesars can more than double from current levels.

Barclays raised the firm's price target on DraftKings to $23 from $15 and reiterated an Equal Weight rating on the shares. The firm increased estimates post the Q4 results citing DraftKings' progress across cost savings and product development initiatives. However, Barclays views the stock's valuation as fair at current levels.

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 Entertainment (PENN), Rush Street Interactive (RSI) and Wynn Resorts (WYNN).