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: Elys Game Technology (ELYS) announced that it has completed the acquisition of a software engineering and IT development firm, Engage IT Services. The firm offers development of sportsbook and gaming applications for cloud, web, and mobile platforms, user experience development, customized business intelligence, digital transformation consulting, end-to-end project and product management, Microsoft solutions, and other engineering and development projects. The company said, "The integration of the Engage team within our organization will greatly enhance our in-house engineering capabilities and addresses the abundance of incoming business, including the development of our U.S. product offerings which includes retail opportunities and mobile solutions as well as the development of our global virtual gaming platform and global mobile solutions, while streamlining our current group engineering projects."

DraftKings (DKNG) confirmed it had "eliminated" around 140 employee positions following an internal reorganization designed to keep compensation expenses flat year-over-year, according to iGaming NEXT's Jake Evans. "This is not a traditional layoff; it is simply us being proactive to ensure we are best set up to meet the goals we have set for 2023 and beyond. As we intend to reduce certain hiring in 2023, the talent acquisition team has experienced a slowdown in candidate recruitment. Similarly, in engineering, we are shifting investment from B2B into mobile development, platform, and other areas," a DraftKings spokesperson is quoted as having told iGaming NEXT. Profitability has been the number one sticking point among investors, so Piper Sandler analyst Matt Farrell expects the workforce reduction to be viewed positively. The analyst says profitability has been the number one sticking point among investors. In addition, layoffs would be a sign that management is taking profitability seriously in the current environment, as it looks to achieve adjusted EBITDA breakeven in Q4, Piper contended. It has an Overweight rating on the shares with a $15 price target.

Sportradar (SRAD) announced the appointment of Severine Riviere as chief people officer, effective immediately. Riviere, who brings two decades of experience in global human resource management and business transformation to the role, will be responsible for all aspects of Sportradar's human resources strategy. Riviere joins Sportradar from Fyffes International where she served as Chief Human Resources Officer and launched strategic plans to improve operational efficiency and transform culture.

Macau's gaming bureau reported January gross revenue from games of fortune in the region was up 82.5% year-over-year to 11.58B patacas. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).

Nevada reported December statewide gaming win was up 14.3% to $1.31B. Additionally, Las Vegas Strip gaming win was up 25.1% versus last year to $814.19M.

Bragg Gaming (BRAG) announced that it has launched its new content and technology with DraftKings in New Jersey. "The launch further expands the reach of Bragg's new, proprietary content in the U.S. and demonstrates continued progress for its North American expansion initiative," the company said.

BIG APPLE, BIG OPPORTUNITY: Elys Game Technology and the New York State Restaurant Association comment on Joint Public Hearing on Mobile Sports Betting in NY: A First Year Review & Its Budget Impact held on January 31, 2023. "Localized retail betting has been a staple of economic benefit for 30-plus years in Europe contributing tax revenue for community services and infrastructure and has recently been adopted in the District of Columbia, Maryland and Ohio as well as Canadian provinces. Elys is proud to support this initiative with the New York State Restaurant Association," stated Michele Ciavarella, Executive Chairman of Elys Game Technology, Corp. "The successful launch of mobile sports betting in the state of New York demonstrates a vast untapped appetite for regulated sports betting within the state. We believe that New York state is in an ideal position to permit retail sports betting with such a robust hospitality scene. This environment can truly capture undiscovered bettors that prefer anonymous betting by allowing restaurants, bars, coffee shops, and other main street businesses to offer sports betting through terminals and kiosks. Statistically, retail land-based sports betting could represent 30 - 40 % of mature markets, and we firmly believe the economic benefits of expanding to retail sports betting could include the creation of employment, stimulating local main street economic activity, allow local entrepreneurs the opportunity to enjoy ancillary revenue by leveraging the customer relationships procured over many years, engage owners and employees with their patrons and enjoy greater core product sales, and generate much needed tax revenue to contribute to local infrastructure such as roads, libraries, education, and healthcare. Partnerships with US Integrity and the National Council on Problem Gambling combine product and service integrity with Elys' cutting-edge Build-Your-Bet retail technology as experienced at Grand Central Restaurant and Sportsbook DC, OverUnder Lounge and Sportsbook DC and Ocean Casino, to bring a new safe and fair level of convenience and bet velocity for in-game events to land-based betting that will develop throughout the US in the coming years."

MASS BETS: Gan Limited (GAN) has launched their B2B sports betting technology and trading solution, GAN Sports at WynnBET Sports Book (WYNN) at Encore Boston Harbor. Encore Boston Harbor's launch of the highly anticipated WynnBET Sportsbook at Encore Boston Harbor in Massachusetts took place on Tuesday, January 31, 2023, and featured celebrity guest appearances by several New England sports legends and media personalities. Guests of the WynnBet Sportsbook at Encore Boston Harbor have the ability to place wagers at one of ten, over-the-counter wagering windows located in the state-of-the art, 130+ seat sportsbook lounge. The casino also features one hundred and twenty self-service betting kiosks, conveniently located throughout the property, including an "Express" sportsbook located on the first floor of the free self-parking garage, which provides guests quick access to 20 betting kiosks. The Encore Boston Harbor WynnBET sportsbook supported by GAN Sports technology is the largest known installation of self-service betting kiosks in the United States. Also, Genius Sports (GENI) announced that it has been temporarily certified by the Massachusetts Gaming Commission as a licensed sports wagering vendor. The temporary certificate of authority is valid for an initial 12 months pending final full authorization. With the addition of Massachusetts, Genius Sports now holds 41 licenses, or equivalent, in North America across U.S. states, territories, tribes, and Canada, providing its award-winning products and services to a wide array of clients operating within these jurisdictions.

IT ALL GOES BACK TO VEGAS: Roth analyst Edward Engel contended that gaming stocks are having a strong start to 2023, averaging a 16% rebound in January. Roth highlighted factors that are driving this recovery. Specifically, stocks with Las Vegas locals exposure, such as Boyd Gaming and Golden Entertainment (GDEN) can benefit from the same drivers causing strip stocks to rally 25% year-to-date . The analyst told investors in a research note that stocks with high variable interest costs can continue outperforming in 2023, after significantly underperforming last year. The firm concluded that land-based gaming stocks are "preferable" over iGaming focused peers.

EARNINGS RECAP: Penn Entertainment (PENN) reported fourth quarter earnings yesterday and shares fell 4% in pre-market trading. Jay Snowden, CEO and president, commented: “2022 was a solid year for PENN despite ongoing macroeconomic headwinds. I’m proud of PENN’s numerous financial and operational achievements in the past year as well as our continued progress on the ESG front. We remained focused on executing our leading omni-channel strategy, which drove database growth and further engagement with our expanding 21-44 year old cohort. Fourth quarter revenues of $1.6 billion and Adjusted EBITDAR of $468.3 million were impacted by severe weather in certain parts of the country in December. Importantly, we also achieved profitability in our Interactive segment notwithstanding an unfavorable sports betting outcome in the World Series. The quarter ended on a high note with strong performance between Christmas and New Year’s across the portfolio, which has continued through January. In 2023, we have numerous near-term growth opportunities, including the transition of the Barstool Sportsbook to our own proprietary technology platform in the U.S. this summer. For 2023, we are guiding to a revenue range of $6.15 billion to $6.58 billion and an Adjusted EBITDAR range of $1.875 billion to $2.0 billion1. This outlook reflects our momentum in both our Retail and Interactive segments and the potential for further economic headwinds as well as increased supply in a few of our markets." The company touted theScore and Barstool Sports as compelling media content with new veticals that provide cross-selling advantages. “Despite well-known headwinds in the digital media space, theScore’s media business and Barstool Sports continue to produce impressive revenue and engagement results, driven by compelling content and an exceptional product experience. theScore’s mobile media audience is more engaged than ever with both quarterly and annual user session growth. In addition, we completed the initial integration of the Barstool Sportsbook into theScore media app in October, highlighting the benefits of our owned media strategy. We are also excited about the upcoming acquisition of the remainder of Barstool Sports, which we expect will close February 17. Barstool achieved record revenue in 2022 while investing in and expanding into new verticals, including coverage of live sporting events such as the Barstool Invitational college basketball tournament on November 11 and the Arizona Bowl on December 30. The combination of Barstool’s vast, loyal audience with theScore’s fully integrated media and betting platform will provide us with compelling competitive advantages and organic cross-selling opportunities.

Needham analyst Bernie McTernan lowered the firm's price target on Penn Entertainment to $50 from $60 and keeps a Buy rating on the shares after its Q4 results and guidance. The company continues to provide a positive outlook for its interactive business, but the firm is taking a more conservative view towards the ramp in profitability, now assuming "hockey stick growth" in FY25 instead of FY24, the analyst tells investors in a research note.

Boyd Gaming, on the other hand, beat earnings expectations in Q4 and shares jumped 6.7% as a result. Keith Smith, president and CEO of Boyd Gaming, said: "The fourth quarter was a strong conclusion to another record year for our Company. We achieved records for revenue and EBITDAR on both a fourth-quarter and full-year basis, as our operating teams remain focused on growing revenues and building loyalty among our core customers while successfully managing expenses. Companywide growth in the fourth quarter was driven by strong performances in our Nevada segments, management fees from Sky River and growth in our online business. During the quarter we also made progress advancing our online strategy, completing our acquisition of Pala Interactive while further expanding our sports-betting partnership with FanDuel. And we continued to return significant capital to our shareholders with nearly $600 million in share repurchases and dividends in 2022. In all, 2022 was another strong year for our Company, and we remain confident in our operating model and our team's ability to successfully navigate the year ahead." CBRE analyst John DeCree upgraded the stock to Buy from Hold with a $75 price target.

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).