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Bet On It: LeoVegas to acquire U.S. sportsbook and online casino from Tipico –



Bet On It: LeoVegas to acquire U.S. sportsbook and online casino from Tipico –

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: Nevada reported May statewide gaming win was up 2.45% to $1.32B. May Las Vegas Strip gaming win was up 3.71% to $742.49M versus last year.

Churchill Downs (CHDN) announced that Michael Lilly has been promoted to president of TwinSpires Horse Racing, a provider of legal online horse betting sites and the official wagering partner of the Kentucky Derby. In this role, Lilly will be responsible for the overall strategy and operation of the TwinSpires Horse Racing business within CDI’s TwinSpires Segment.

Gan Limited (GAN) announced that it has received clearance from the Committee on Foreign Investment in the United States, or CFIUS, for the proposed merger of Gan and a subsidiary of Sega Sammy Creation, or SSC, an affiliate of Sega Sammy. The closing of the merger is also subject to approval of the merger and change in control of Gan by certain gaming authorities. The closing of the merger remains subject to other customary closing conditions, and is expected to occur in late 2024 or early 2025. If the merger is completed, each Gan ordinary share issued immediately prior to the effective time of the merger will be automatically cancelled and converted into the right to receive $1.97 in cash with respect to each such ordinary share, without interest and less applicable withholding taxes. Upon the completion of the merger, Gan will cease to be a publicly traded company and its ordinary shares will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934, as amended.

Penn Entertainment (PENN) announced that it has expanded its partnership with Ticketmaster to offer new benefits for its more than 30M loyalty members. “Starting today, Penn Play members can redeem rewards for tickets to live events through Ticketmaster. Additionally, Penn will have on-site activations at five amphitheaters across the U.S., further enhancing the live event experience for Penn Play members,” Penn stated. “Today’s fans want more than passive entertainment – they look for immersive live experiences that create connections and make them feel appreciated. Our partnership with Penn Play brings together digital engagement and real-world excitement, making it easy for fans to find the events they love,” added Frank Gutierrez, EVP and global head, e-commerce sponsorship, Live Nation (LYV) and Ticketmaster.

Genius Sports (GENI) secured an agreement with the Union of European Football Associations, or UEFA, to provide center of mass player tracking technology to UEFA for the UEFA Europa League – seasons 2024/2025 to 2026/2027 inclusive – and the UEFA European Qualifiers and UEFA Nations League, 2024/25 to 2027/2028 seasons inclusive. This agreement will span 1,350 matches and see Genius Sports’ AI technology installed at over 140 stadiums.

Bragg Gaming (BRAG) announced the launch of its newest games and Remote Game Server, or RGS, technology with BetMGM (MGM) in Pennsylvania. This marks the third state in which Bragg content is live with BetMGM, following earlier launches including in Michigan in 2022 and New Jersey in 2023 respectively.

MGM Resorts (MGM) announced that its subsidiary, LeoVegas Group, has entered into an agreement to acquire the product and technology platform constituting the U.S sportsbook and online casino from Tipico Group. This acquisition is the second major investment by LeoVegas, following the acquisition of game developer Push Gaming in 2023. The acquisition will allow LeoVegas to operate a purpose-built proprietary sportsbook across all international markets and brands, with the exception of those exclusive to the BetMGM JV. Tipico will wind down its U.S. operations prior to the closing of the acquisition. As part of the transaction, LeoVegas will acquire certain of Tipico’s U.S. facing management, technology and trading teams across the U.S., Colombia and Europe. The transaction is subject to customary closing conditions and is expected to be completed in the third quarter of 2024.

STATE UPDATE: Across 18 states that reported data for May, the handle increased by 44% year-over-year, or YoY, and gross gaming revenue, or GGR, rose by 30%, according to Jefferies. Despite facing a challenging comparison to 2023, May’s margin stood at 10.7%, slightly higher than April’s 10.4%. Margins across these states remained relatively flat YoY in Q2, down only 0.1 percentage point at 10.5%. New York reported weekly data up to June 16th. The first two weeks of June had margins of 10.2% and 8.9%, consistent with April and May. Across the first 11 weeks of Q2, handle increased by 35% YoY, and GGR rose by 27%. DraftKings saw a 42% increase in GGR. FanDuel’s (FLUT) GGR share was 47%, followed by DraftKings (DKNG) at 37%, Caesars (CZR) at 6%, and BetMGM at 4%. FanDuel also continued to lead with a 45% GGR market share across the 18 states. DraftKings gained share, reaching 34%. BetMGM held the third spot with a 6% share. May growth was strongest for DraftKings, followed by FanDuel and BetMGM.

SHOW ME STATE: A recent poll conducted by Emerson College and The Hill revealed insights about Missourians’ views on legalizing sports betting James Bisson of Sportsbook Review reported. While some citizens expressed support for such a platform, the majority either opposed it or remained indifferent. The level of support fell well short of the 50% threshold required for a successful legalization plan. This outcome could significantly impact the potential vote on the November election ballot. If public opinion remains divided, it may influence the final decision regarding sports betting in Missouri. The group “Winning for Missouri Education” has been actively working to include the question of legal sports betting on the November ballot. Their efforts have been substantial, as they managed to gather approximately 340,000 signatures in support of this initiative. However, to proceed, they need around 180,000 verified signatures.

ADDITIONAL ANALYST COMMENTARY: Raymond James downgraded Penn to Market Perform from Outperform without a price target. The analyst cited valuation for the downgrade, saying recent activist pressure and takeover rumors have pushed shares up 21% since May 20. Penn’s path to profitability in digital remains uncertain, and Raymond James does not expect any dramatic shift in strategy or an outright sale of the company in the near-term, the analyst tells investors in a research note. As such, the firm is recommending investors take profits and look for better risk-adjusted opportunities in the sector. Caesars is its top pick.

Wells Fargo lowered the firm’s price target on DraftKings to $53 from $54 and reiterated an Overweight rating on the shares. The firm lowered estimates, with Q2 adjusted EBITDA now $118M on higher promotions stemming from greater new customer acquisition as well as low hold, the analyst tells investors in a research note.

Peel Hunt downgraded Flutter Entertainment to Hold from Buy with a price target of 15,000 GBp, down from 16,000 GBp. The firm called Flutter a “great company” but said the shares now trade at a fair price.

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 (FLUT), (GAMB), Gan Limited (GAN), Genius Sports (GENI), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn Entertainment (PENN), Rush Street Interactive (RSI), Super Group (SGHC) and Wynn Resorts (WYNN).

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