Wager On It: Macau gaming concession renewals formally finalized

Welcome to the most recent version of “Wager On It,” the place The Fly appears to be like at information and exercise within the sports activities betting and iGaming house.

SECTOR NEWS: Churchill Downs (CHDN) introduced the appointment of Andrea Carter to the corporate’s board of administrators. Carter is presently serving as Senior EVP and CHRO for International Funds (GPN). in Atlanta. Carter was appointed as a Class II Director and her time period will expire with the opposite Class II Administrators on the 2025 annual assembly of shareholders of the corporate. Her appointment will increase the CDI board of administrators to 9 members.

Gan Restricted (GAN) introduced on Friday an unique nationwide partnership for Gan Sports activities and Tremendous RGS for WSI doing enterprise as WynnBET (WYNN). Following an evaluation, WynnBET selected to combine the GAN Sports activities know-how to energy its on-line sportsbook operations throughout future U.S. jurisdictions, together with the retail launch of the WynnBET Sportsbook at Encore Boston Harbor in Massachusetts in early 2023. Moreover, Gan will construct upon its current relationship with WynnBET by offering assist by GAN’s content material aggregation supply system Tremendous RGS that will probably be deployed in all future iGaming States through which WynnBET elects to function on-line.

The Sands China (SCHYY, LVS) group signed its finalized 10-year gaming concession contract Friday at a signing ceremony, after having been awarded a provisional concession by the Macao SAR authorities on November 26. Additionally, Wynn Resorts introduced that Wynn Resorts Macau S.A. has entered right into a 10-year settlement with the Macau authorities for the renewal of its gaming concession, overlaying Wynn Macau and Wynn Palace Cotai. The corporate stated, “Via our intensive and constructive discussions with the Macau authorities, we’re assured that the market holds important future alternative.” Melco Resorts & Leisure introduced that the Macau authorities has awarded a ten-year concession to function video games of fortune and probability in casinos in Macau to Melco Resorts, a subsidiary of the corporate. The time period of the concession commences on January 1, 2023 and ends on December 31, 2032.

Impressed Leisure (INSE) introduced a brand new unique long-term contract with Paddy Energy, a UK-based bookmaker that owns and operates over 350 betting outlets within the UK and is a central model inside Flutter Leisure (PDYPY). As a part of this settlement, Impressed will completely present Paddy Energy with absolutely built-in managed companies for its complete UK property of roughly 1,400 terminals, together with set up, distant and subject know-how assist, in addition to content material and platform deployment. 

Bragg Gaming (BRAG) introduced that it has launched its new content material and know-how with BetMGM (MGM) in Michigan, furthering the corporate’s North American growth. The corporate’s new content material and know-how is now dwell with six iGaming operators throughout three North American markets. New proprietary content material reminiscent of Egyptian Magic from Bragg’s Atomic Slot Lab studio in addition to new unique titles from the corporate’s associate studios is now obtainable to BetMGM’s clients within the Nice Lakes state, following the launch of Bragg’s new Distant Video games Server know-how with the operator.

GOOD TEAMS WIN, GREAT TEAMS COVER: Week 14 contained combined outcomes for sportsbooks, with simply one of many 5 largest underdogs successful outright, though 4 of the 5 lined the unfold, Canaccord analyst Michael Graham famous. All three prime time video games going beneath the projected whole was constructive for operators, though Week 14 was probably the greatest weeks of the season for over bettors, with seven of 13 video games going over and dropping the successful proportion for unders to 56%. Maryland offered outcomes from its first month of on-line sports activities betting exercise, with $186M of wagers positioned throughout the nine-day interval following the launch on November 23, together with $64M of promotions. FanDuel led in Maryland with 48% of the month-to-month on-line deal with, adopted by DraftKings (DKNG) with 37%, BetMGM with 8% and Barstool (PENN) and three different operators with 3% respectively. New York had $32M of gross gaming income, or GGR, generated from $376M of wagers positioned throughout NFL Week 13. Graham stated that the industry-wide maintain fee was 8.5% with sportsbooks benefiting from heavy public betting on the US crew within the World Cup, which was knocked out by the Netherlands within the Spherical of 16.

TRUIST SUMMIT TAKEAWAYS: Final week, Truist hosted its annual Securities Gaming, Lodging, Leisure & Eating places Summit in Boston. Typically, gaming’s momentum has continued into This autumn with no notable indicators of cracks amidst an unsure macro atmosphere, although firms are prepared to regulate if that modifications., in accordance with Truist analyst Barry Jonas. The analyst informed traders that interactive operators are hyper-focused on profitability, REITs stay lively and he sees tailwinds throughout gaming tech.

EMPIRE STATE DATA: New York reported November outcomes for on-line sportsbooks with over $1.5B in wagers as soon as once more, Benchmark analyst Mike Hickey informed traders. This edged out October’s deal with by about $10M, a 1% improve from final quarter. GGR additionally had a modest improve of two% month-over-month to $148.2M. Deal with and income numbers have been barely disappointing, Hickey famous, as most assumed that including in a World Cup to a “prime” betting month like November would increase numbers to close highs of January. November’s outcomes deliver New York’s year-to-date deal with for 2022 over $14.5B and GGR year-to-date over $1.2B. Wagers per day additionally noticed a slight improve sequentially of 4%, reporting about $51.8M per day for the month.

NOVEMBER DOWNLOADS RISE: Morgan Stanley analyst Stephen Grambling stated that November app obtain progress stays “sturdy,” properly forward of deal with progress. Based mostly on Sensor Tower knowledge, U.S. sports activities betting app downloads grew 102% in November, doubtless supported by state launches in Kansas and Maryland. Whole app downloads for November have been 2.1M ,up 11% vs. October. whole app downloads by December 10 are up 78% year-over-year. In December, Grambling forecasts sports activities betting deal with to develop 35% year-over-year. He additionally highlighted in a observe to traders that that app downloads are a “good proxy” to trace market share tendencies over time, however does have some volatility so one month-to-month knowledge level may be deceptive. 

ADDITIONAL ANALYST COMMENTARY: BofA analyst Shaun Kelley downgraded Penn Leisure to Impartial from Purchase with a worth goal of $40, down from $45. Kelley downgraded Caesars (CZR) to Impartial from Purchase as properly with a worth goal of $55, down from $60. He thinks progress momentum is levelling out after on line casino gaming shares, and particularly regional operators, have been the most important “over-earners” in his protection versus pre-COVID. Not like different areas in shopper discretionary, estimates haven’t but come down for the group, Kelley famous. 

Roth Capital analyst Edward Engel downgraded DraftKings to Impartial from Purchase with a $15 worth goal. The analyst cites considerations that Fanatics’ Q1 OSB launch can disrupt the profitability narrative. Engel additionally notes that DraftKings’ constructive free money move goal for 2025 implies EBITDA of $150M-plus, however this excludes $300M-$400M-plus of stock-based comp.

JMP Securities analyst Jordan Bender downgraded Boyd Gaming (BYD) to Market Carry out from Outperform with no worth goal. The corporate’s property have underperformed {industry} progress post-pandemic, and an absence of catalysts heading into 2023 make the shares pretty valued, Bender informed traders in a analysis observe. Boyd has the muse in place for progress in future years, together with a web-based platform and a stable steadiness sheet, however there may be restricted upside to estimates within the medium-term, stated the analyst. He finds different gaming names higher positioned within the present atmosphere.

Jason Bazinet’s evaluation suggests DraftKings stays on monitor relative to its long-term targets. Nevertheless, the market seems to be extra skeptical in regards to the the corporate’s long-term prospects, Bazinet tells traders in a analysis observe. If legalization tendencies proceed on the 2018-2021 cadence, the corporate ought to attain its long-term targets by 2033, says the analyst. He believes the market shouldn’t be giving DraftKings credit score for its progress and is a purchaser of the inventory at present ranges. Bazinet views the corporate’s threat/reward as compelling and retains a Purchase score on the shares with a $24 worth goal.

Barclays analyst Brandt Montour raised the agency’s worth goal on Wynn Resorts to $97 from $75 and reiterated an Equal Weight score on the shares. Moreover, Montour raised the agency’s worth goal on Las Vegas Sands to $57 from $43 and maintained an Chubby score on the shares. Lastly, Montour raised Barclays’ worth goal on Bally’s to $23 from $21 and saved an Equal Weight score on the shares. Heading into 2023, the macro backdrop for the U.S. gaming, lodging and leisure sector has worsened since Barclays’ initiation six months in the past, Montour tells traders in a analysis observe. Nevertheless, the analyst nonetheless expects to see a robust desire amongst shoppers for experiences, “driving a continued a shift of pockets towards journey.” Nevertheless, much less pent-up demand, much less financial savings for shoppers and fewer confidence with the financial backdrop will collectively result in extra worth sensitivity, contends Montour. He subsequently shifts his positioning to include some stage of trade-down throughout a lot of the sub-sectors. Montour particularly likes phase publicity with a excessive perceived worth proposition, like cruise traces.

PUBLICLY TRADED COMPANIES IN THE SPACE INCLUDE: Accel Leisure (ACEL), Bally’s (BALY), Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Leisure (PDYPY), Gan Restricted (GAN), Genius Sports activities (GENI), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn Leisure (PENN), Rush Road Interactive (RSI) and Wynn Resorts (WYNN).