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: Bragg Gaming (BRAG) announced that the Pennsylvania Gaming Control Board, or PGCB, approved the company to participate in the Commonwealth's iGaming market. The PGCB's approval is the final regulatory approval needed in advance of closing for Bragg to complete its previously announced acquisition of Spin Games, which the company expects to close later this month. Nevada-based Spin Games is a B2B gaming technology and content provider currently servicing the U.S. market. Spin Games holds licenses in iGaming-regulated U.S. states including New Jersey, Pennsylvania, Michigan and Connecticut, and supplies Tier 1 operators in these markets.

DraftKings (DKNG) announced the launch of its online sportsbook and online casino products in Ontario, Canada. "DraftKings will deliver customers in Ontario a best-in-class sports betting experience through its top-rated sportsbook app, as well as more than 130 online casino game variations through DraftKings Casino such as baccarat, blackjack, roulette and slots," the company stated. "DraftKings' entry into Canada with our online sportsbook and online casino products is a significant milestone in our expansion efforts as we reach nearly 40-percent of Canada's total population. We look forward to providing the passionate fanbase in Ontario with the most entertaining and responsible gaming experience possible," added Jason Robins, DraftKings co-founder, chairman and CEO.

TAPPP and BetMGM (MGM) announced an expansion of BetMGM's gift card distribution network. The amount of stores carrying BetMGM prepaid cards will roughly double from around 6,000 to more than 12,000 in the current quarter. BetMGM's partnership with TAPPP launched in September 2021, attracting a vast group of new customers, and providing existing customers with a fast, flexible option to fund their BetMGM accounts in states in which sports betting is legal. Since its inception, the BetMGM gift card business has experienced an industry-leading redemption rate of 99%, with nearly 75% of customers redeeming their purchases within just 2 hours. Last week, BetMGM reiterated its long-term ambitions in the U.S., which are: Expected market share of approximately 20%-25%; Expected EBITDA margin of 30%-35%. Reaffirmed its outlook guidance: FY22 net revenues over $1.3B; Reach positive EBITDA during 2023.

David Tepper's Appaloosa Management disclosed in an SEC filing its holdings as of March 31, 2022. Appaloosa made two new buys during Q1: 525,000 shares of Las Vegas Sands (LVS) and 225,000 shares of Wynn Resorts (WYNN).

Total gaming revenue in New Jersey reported by casinos, racetracks and their partners was $422.5M for April, reflecting a 20% increase from $352.2M reported in April 2021. For year-to-date, total gaming revenue reported by casinos, racetracks, and their partners was $1.6B reflecting a 19% increase from $1.35B reported in the prior period. Sports wagering gross revenue reported by casinos, racetracks, and their partners was $50.3M for April, reflecting an 8.2% decrease when compared to $54.8M in the prior period. Sports wagering gross revenue reported by casinos, racetracks, and their partners was $207.8M for the year-to-date, reflecting a 14.9% decline when compared to $244.2M for the prior period. For the month of April, internet gaming win reported by casinos and their partners was $136.9M, reflecting growth of 27% compared to $107.7M for the prior period. For the year-to-date period, internet gaming win reported by casinos and their partners was $545.4M, reflecting growth of 30.2% compared to $419M for the prior year-to-date period. Based upon filings with the Division of Gaming Enforcement, total casino win for the nine casino hotel properties was $235.3M for April, reflecting growth of 24.1% compared to $189.6M for April 2021. Year-to-date total casino win for the nine casino hotel properties was $848M, reflecting growth of 24.2% compared to $682.7M for the prior period.

Caesars (CZR) and Indianapolis Motor Speedway announced a partnership to make Caesars Sportsbook an Official Sports Betting Partner of the Indy 500 and IMS. The collaboration also makes Caesars Sportsbook a sponsor for the remaining IMS races on the 2022 calendar, starting with the GMR Grand Prix on May 14, and includes the opening of the very first exclusive betting lounge at the Racing Capital of the World.

Wild Streak Gaming, a Bragg Gaming company, has expanded its collaboration with International Game Technology (IGT) with an agreement to develop four exclusive land-based slot titles for the leading gaming technology supplier. The agreement is an extension of a successful relationship between the two parties, with the most recent extension for four titles occurring in August of 2021.

Elys Game Technology (ELYS) announced that the company has entered into retail distribution agreements to deploy its Virtual Generation Limited virtual sports wagering and amusement products throughout Italy. The agreement is expected to place VG products in approximately 5,000 retail locations operated by both the Company's Multigioco subsidiary and other licensed operators in the Italian market that would allow patrons to wager on a variety of high-definition virtual sports events such as pre-recorded greyhound and horse racing, virtual horse racing, and Italian league play virtual soccer.

BetMGM announced that the company now is the exclusive Sports Betting Partner of the Houston Astros. This marks BetMGM's first relationship in Texas. Under the agreement, BetMGM signage will be prominently featured at Minute Maid Park. BetMGM and the Astros also will team up to offer special betting promotions for BetMGM customers in Louisiana.

HOUSE ALWAYS LOSES IN EMPIRE STATE: BetMGM is pulling back its investment in NY sports betting because of what it calls an “unsustainable” tax environment, Brad Allen of Legal Sports Report wrote. MGM held its 2022 Investor Day last week where it said it made a “concerted decision” to divert spend away from New York sports betting. BetMGM fell to fourth in the New York market in April, according to NY Gaming Commission revenue numbers. CFO Gary Deutsch said BetMGM could no longer support the “irrational investment thesis” of marketing in a state with a 51% tax rate. “As rational allocators of capital with sophisticated investors in Entain and MGM, we simply can’t apply our capital against an irrational investment thesis. Players would never continue to play if the house always won. The house cannot continue to play if it’s always going to lose.” Without tax writeoffs for bonuses, the effective tax rate is more than 100%, Deutsch said.

WASTING NO TIME: While, the new legal sports betting law in Kansas calls for a January 1, 2023, launch date, regulators are already chipping away to hopefully be a little early, Jill R. Dorson of Sports Handle reported. “The bill doesn’t go into effect until July 1, but we’re not resting on our laurels,” Kansas Lottery Director Stephen Durrell told Sports Handle. “There are internal hopes that we can get things done in the near future, but making sure it is effective and works is one of our premier goals. There are hurdles between here and there to get it done.” Echoing these sentiments, Todd Allen, government affairs director at the Kansas Racing and Gaming Commission, said, “January 1 is a ‘must date,’ but hopefully we’ll have it all done before that. But some of those processes take time.” Reportedly, background checks won’t be complete until November. Notably, there will be at least one public comment period and time for other state agencies to approve the regulations before they can be finalized.

EARNINGS RECAP: A handful of companies in the sector reported quarterly earnings this week. Firstly Wynn Resorts' results missed analyst expectations in Q1. "Our first quarter results reflect continued strength at both Wynn Las Vegas and Encore Boston Harbor where our teams' unrelenting focus on five star hospitality and world class experiences combined with very strong customer demand to deliver a new first quarter record for Adjusted Property EBITDA at both properties. In Macau, we remain confident that the market will benefit from the return of visitation when travel restrictions subside," said Craig Billings, CEO of Wynn Resorts. Operating revenues from the company's Las Vegas operations were $441.2M for Q1, an increase of $262.5M from $178.7M for the first quarter of 2021. Las Vegas adjusted property EBITDA was $159.4M , compared to $28.1M for the first quarter of 2021. Table games win percentage for the first quarter was 23.6%, within the property's expected range of 22% to 26% and in line with the 23.6% experienced in the first quarter of 2021.

While Genius Sports (GENI) also missed analyst consensus on earnings per share in Q1, the company' s revenue surpassed them. "Our strong first quarter is a result of successful execution," said Mark Locke, Genius Sports Co-Founder and CEO. "We began 2022 with a comprehensive Investor Day, outlining our strategic plan and underlying assumptions supporting our financial outlook. Our financial and operational achievements in the quarter demonstrate our ability to deliver on that plan and increase our competitive advantages through unique and proven technology." Genius reaffirmed its expectation to generate group revenue of approximately $340M and group adjusted EBITDA of approximately $15M in 2022, despite risks related to foreign exchange and ceased commercial operations in Russia and Ukraine.

Additionally, in Q1, Gan Limited (GAN) also posted mixed results. The company's CEO Dermot Smurfit cited presence in new places such as Michigan and Ontario as reasons to be excited for the beginning of 2022. Smurfit stated: “...In the state of Michigan, our presence began with supporting a tribal operator, and has evolved to now power both iGaming and online sports betting and features our Super RGS platform content as well. The evolution of our platform in Michigan is a perfect example of our competitive offering and its position in the market as we prepare for future state launches.. In addition to our planned expansion to new states in the U.S., we successfully launched in Ontario on April 4th to support online sports betting and iGaming in the province and launched PlayEagle.com for Soaring Eagle Casino & Resort in the state of Michigan in April. We also remain excited about the momentum behind our GAN Sports and International B2C strategies as well as operator reception to our Super RGS content and offering. We expect each of these efforts to drive significant year-over-year revenue growth which, when coupled with our laser focus on profitability, will yield much better scale and improved margins compared to last year." Karen Flores, CFO of GAN added: “I am pleased with our strong start to the year and our much improved Adjusted EBITDA in the quarter driven by the sequential increase in our sports margin and our deliberate, focused efforts on profitability in 2022. Part of this effort includes a cost restructuring plan which we expect to yield annualized savings of approximately $10 million while not inhibiting our investments in our strategic initiatives, to accelerate our path to better Adjusted EBITDA and free cash flow generation. We are reiterating our revenue expectation of $155 million to $165 million and Adjusted EBITDA in the range of $15 million to $20 million for the full year and expect a strong second half of the year supported by the upcoming World Cup and international sports calendars. Lastly, we recently closed our previously announced term loan of $30 million which ensures we have the balance sheet flexibility to invest in the growth opportunities ahead of us.”

Sportradar (SRAD) comfortably surpassed Q1 revenue in 2021 posting 1Q22 revenue of EUR 167.9M, nearly EUR 40M higher than the prior year period. Carsten Koerl, CEO of Sportradar said: "Our fiscal 2022 is off to a fast start, with core, high-margin betting products driving growth around the world. Our U.S. business continues its tremendous growth story as more states legalize and sports betting becomes live, mainstream entertainment. As the market leader, our technology and data-driven insights continue to transform the converging media, entertainment and sports industries and fuel our consistent and long-term profitable growth story."

ANALYST COMMENTARY: Wells Fargo analyst Daniel Politzer lowered the firm's price target on Wynn Resorts to $79 from $97 given increased uncertainty, while keeping an Equal Weight rating on the shares. The analyst noted the company reported a Q1 EBITDA result that contained few surprises.

Maxim analyst Jack Vander Aarde lowered the firm's price target on Elys Game to $5 from $8 but maintained a Buy rating on the shares. The analyst cited the company's Q1 earnings miss and 14% decline in revenue though he continues to project revenue growth of over 20% in 2022 and 30% in 2023, reflecting multiple early-stage growth catalysts, including further expansion of B2B operations in the U.S., Canada, and Europe, as well as the recently announced partnership with Lottomatica S.p.A.

Craig-Hallum analyst Ryan Sigdahl lowered the firm's price target on Sportradar to $25 from $30 on lower industry multiples and higher discount rate, while reiterating a Buy rating on the shares. Sentiment toward sports betting stocks has been overly negative, but Sportradar continues to report strong revenue growth, profitability and underlying KPIs, the analyst notef. Despite starting to see a bigger impact in Q2 from Ukraine/Russia, management expects a less severe "worst case" scenario as they aggressively pursue mitigation efforts, he adds. Sigdahl views this as a positive proof point for the durability and diversified nature of the business that they can continue to grow revenue 20%-plus with healthy margins and generating positive free cash flow despite macro challenges.

Jefferies analyst David Katz upgraded Penn National (PENN) to Buy from Hold with a $49 price target, as he argues that the recent weakness has reduced the shares to a level that "comfortably reflects" the stable cash generation of the land-based casino business while assigning "de minimis value" for the company's digital prospects. He assigns $32 per share land-based value, which is near where the shares are trading, along with $17 per share in value for the company's online sports betting and iGaming products as well as the opportunities for media revenue, Katz toldi nvestors. He believes management is progressing to more "a cohesive strategic plan for digital" including Barstool, theScore and combined technology that could demonstrate returns in time, Katz added.

Berenberg analyst Zachary Silverberg initiated coverage of Boyd Gaming (BYD) with a Buy rating and $78 price target. Boyd, along with Red Rock Resorts (RRR), has a "duopoly" in the Las Vegas local casino market, where he sees improving demographics and competitive barriers to entry, Silverberg told investors. Silverberg also initiated coverage of Red Rock with a Buy rating and $50 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 National (PENN), Rush Street Interactive (RSI) and Wynn Resorts (WYNN).