Recently, MGM Resorts’ chief executive officer, Bill Hornbuckle, was asked about any change of heart following the company’s latest public statement on the acquisition bid topic. His answer led to a 4% drop in Entain’s shares.

Last fall, it was speculated that MGM Resorts would possibly make a new acquisition bid for global gaming giant Entain following the decrease in the latter’s share price in 2023 along with the ousting of now former chief executive officer Jette Nygaard-Andersen at the end of the year. 

The S&P 500 global gaming and entertainment company that features national and international locations initially said no to an acquisition bid in 2021 that gave the business an enterprise value of £8.1 billion ($10.17 billion).

That amount currently stands for an important premium on the company’s market cap of £6 billion ($7.53 billion).

“It’s About Product, Product, Product, and Focus”

The CEO replied that their main focus would be on product in the upcoming months, leaving large-scale mergers and acquisitions to the side.

Hornbuckle explained that, while attending the ICE event in London last week, he met with Stella, their partner, and talked over the importance of making sure “everyone’s focus is on BetMGM.”

He emphasized that 2024 will be a critical year for everyone, ”So, it’s about product, product, product, and focus.” His comments immediately caused Entain’s share price to fall close to 4% down to £9.22 ($11.58) prior to slightly recovering to £9.84 ($12.53).

2024, an “Investment Year” for BetMGM

In December 2023, BetMGM’s chief executive officer, Adam Greenblatt, spoke during an investor presentation, calling 2024 an “investment year” as the joint venture was trying to regain the market share that it had lost while improving its product.

Hornbuckle agreed that 2024 would be “a reinvestment year,” emphasizing the need and desire to get their product “in a better and different shape” and adding they would like additional parlays. 

“Obviously,” he continued, “the acquisition of Angstrom by our partner will be a big add to that. We’ll be able to stick out more product. We’ll have more confidence in it.”

The CEO explained that their focus will fall on baseball in the next months, with expectations to hit soccer in 2025 while putting many of their product differentiators to use in the meantime.

For the spring, Hornbuckle also discussed their plan to have a single wallet in play. As for when they will begin to make some cash, 2025 seems to be on the horizon. 

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Capital Research and Management Company, a subsidiary of The Capital Group Companies, Inc., reduced its shares in Kindred Group. On Wednesday, Kindred confirmed that it received notification about the reduced number of shares and voting rights by Capital Research and Management Company.

Per the notification, as of January 22, 2024, Capital Research and Management Company now holds 8.63% of shares and voting rights in Kindred. This strategic move comes at a time when La Française des Jeux (FDJ) announced a $2.5 billion bid to acquire Kindred recently. With the proposed strategic bid, FDJ seeks to propel its global presence, after it already has established strong footprint across Europe.

Considering FDJ’s announcement, Kindred’s shares skyrocketed recently. As of January 22, 2024, the company’s shares were up 17% on the Stockholm Nasdaq.

Throughout the years, Capital Research and Management Company’s stake in Kindred varied. An all-time high share and voting rights in Kindred, some 15.33%, were held by the company back in October 2021. More recently, Capital Research and Management Company reduced its stake in July 2022 to 10.86%.

“Kindred Group plc hereby announces that it, on 23 January 2024, has received a notification of major holdings from The Capital Group Companies, Inc., a company with its registered office in Los Angeles, USA. The notification relates to a reduced number of shares and voting rights in Kindred by Capital Research and Management Company, a subsidiary within The Capital Group Companies, Inc. which holds the relevant position in Kindred Group,“

reads a statement released by Kindred Group

Preliminary Q4 Results Point To Growth in EBITDA and Revenue

Amid the announced takeover bid from FDJ, Kindred released its preliminary Q4 2024 results, pointing to an increase in revenue and uptick in EBITDA. In total, Kindred’s revenue for the fourth quarter hit £312.9 million ($398 million), a result that marked an increase of 2% year-over-year.

On the other hand, underlying EBITDA for the period grew as well, hitting £56.8 million ($72.2 million). In contrast, for the fourth quarter in 2022, underlying EBITDA halted at £39.1 million ($49.7 million).

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The fast-growing sports gaming and sports media company, Betr, announced ambitious plans for the year ahead. Today, the company confirmed it anticipates expanding across the United States after securing several sports betting market access agreements.

Betr’s beta product, referred to by the company’s co-founder Joey Levy as V0, is currently live in Ohio, Massachusetts and Virginia. However, the leading betting company said that it plans to roll out V1 of its Sportsbook product in several states ahead of the start of the 2024 NFL season.

The ambitious plans for expansion in the sports betting sector across the US include launches in Pennsylvania, Kentucky and Colorado, three states where the company secured market access for its sportsbook. Additionally, in Pennsylvania, Betr secured iGaming market access, paving the way for its first launch within the online casino sector.

In a statement, Betr confirmed it joined forces with Cordish Gaming Group, securing market access to the iGaming vertical in the state. Still, it’s important to note that prior to launching Betr Casino in Pennsylvania, the company needs to secure approval from the state’s gambling regulator.

On the other hand, Betr’s online sports betting market access to Kentucky was facilitated via a deal with the Eastern Band of Cherokee Indians. Previously, the Eastern Band of Cherokee Indians acquired a stake in Betr which has increased.

Finally, teaming up with Boulter Developments granted Betr access to the online sports betting market in Colorado. Similar to the previous market access agreement, this one is also subject to approval from the gambling regulator, the Colorado Division of Gaming.

An Exciting Year Ahead for the Company

Joey Levy, Betr’s CEO and founder, revealed that there are exciting times ahead for the company considering the upcoming launch of its V1 Sportsbook and Betr Casino, planned for this year. He also spoke about Betr Picks, the company’s leading real money fantasy sports product.

“We are thrilled to announce our new market access partnerships for Sportsbook and the introduction of Betr Casino in 2024 ahead of our V1 Sportsbook launch.“

Joey Levy, founder and CEO of Betr

Ahead of the 2023 NFL season, Betr rolled out Betr Picks which is now live in more than 20 different states. “Through the success of Betr Picks, we have validated that our playbook of simpler and more intuitive user experiences built for casual fans on the product front, and original short form video built for the next generation of sports fans on social media on the distribution front, are winning strategies for rapidly and efficiently scaling a new real money gaming business in the US,” explained Levy.

He outlined that the company anticipates replicating the success of Betr Picks for its Betr Casino and Betr Sportsbook throughout 2024 and beyond. Finally, Levy said Betr expects to have a solid foundation for four separate business units, including Betr Sportsbook, Betr Casino, Betr Fantasy and Betr Media by the end of the year.

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Renowned betting and gaming operator Flutter Entertainment experienced a significant surge in its share value. Despite increased competition, the company’s FanDuel brand has maintained its leadership position in the USA, and its overseas investments also pay significant dividends. This development aligns with Flutter’s plans to enter the New York Stock Exchange after it stops trading its ordinary shares on Euronext Dublin by 23 January.

The US Market Presents Significant Opportunities

The notable 5% share price increase is primarily due to Peel Hunt’s favorable opinion on the company’s prospects, centering around its FanDuel brand. The investment firm projects Flutter’s US business to generate an adjusted EBITDA of $180 million for the full year of 2023. The following year should allow the gambling giant to cement its positions in established jurisdictions, doubling down on profitable markets.

Peel Hunt’s forecast for Flutter aligns with the company’s November guidance, predicting an adjusted EBITDA of approximately £1.44 billion ($1.83 billion), excluding the US market, and revenue of £3.75 billion ($4.77 billion) from the US. Despite this stellar performance, Flutter’s shares declined over 10% in the last six months, driven by regulatory uncertainties in the UK and Australia.

These developments highlight Flutter’s increasing reliance on the US market, which saw a significant expansion in 2023 and should remain the company’s most important revenue driver. Sisal is another promising Flutter subsidiary, as its lottery business was a standout performer within the company’s international division, successfully tapping into growth markets.

Overseas Operations Remain Vital

Flutter Entertainment is preparing for a dual listing of its shares on the New York Stock Exchange starting 29 January 2024, contingent upon regulatory approvals. This move aligns with the company’s strategy as it revealed that over 30% of its Q3 2023 revenue stemmed from the burgeoning US market.

Conversely, the gambling giant’s imminent exit from the Dublin Stock Exchange should streamline its operations and minimize regulatory complexities. Flutter’s ordinary shares will stop trading on Euronext Dublin on 23 January 2024. However, the company will keep its listing on the London Stock Exchange, highlighting its substantial regional investments.

Analysts believe that favorable industry trends can further propel Flutter’s shares as it draws renewed interest from US investors. The company’s diverse, globe-spanning portfolio enables it to capitalize on new developments, delivering long-term and sustainable growth. While 2024 will undoubtedly present significant challenges for the broader industry, Flutter remains well-equipped to capitalize on its strengths.

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The shares of the leading provider of technology and services, powering betting and gaming operators, Bragg Gaming Group, increased Wednesday, after one of its largest shareholders sent a letter, supporting different business combinations, including partial or full sale of the company’s assets. The letter was sent by Jeremy Raper, the founder of Raper Capital, a company that is in charge of some 375,000 shares in Bragg and the second-largest disclosed investor in the company.

In his letter, sent to CEO Matevz Mazij, the expert spoke about Bragg’s acquisition of Oryx a few years ago, explaining that its current stock price is 25% lower when compared to that period. Raper acknowledged the company has seen “chronic underperformance,” regardless of its listing on NASDAQ dating back to 2021. Raper Capital’s founder explained in his letter to Bragg: “Suffice to say, the public markets have had plenty of opportunity to appraise our Company’s growth story, over time, and yet the record demonstrates that it will not, or cannot, accord even the lower bounds of what most shareholders would consider fair value.”

According to Raper, Bragg can ensure proper returns for the shareholders via a partial or full sale of company assets. He encouraged the company to pursue all possible strategic alternatives, including the aforementioned sale that can help maximize the value for all of its shareholders. Moreover, Raper said he believes that minority shareholders would agree that this would be the best course for Bragg.

“As such, it is evidently clear that a third-party sale of the business is the only way to crystallize a proper return for the underlying business value that you, and legacy management, have created.“

Jeremy Raper, founder of Raper Capital

Proposed Sale To “Unlock Latent Value” for Shareholders

Raper Capital’s founder compared the proposal to similar recent transactions within the iGaming vertical that have taken place over the last 24 months. He uncovered that on average, transactions similar to the proposed one were 19x EV/EBITDA, while a median multiple was approximately 15x EV/EBITDA.

Speaking about Bragg’s shares at the time of writing, Raper said that they trade barely at 5.5x EV/EBITDA. He said that even with a conservative 12x EV/EBITDA Bragg’s share would be worth $13.5 per share based on current year numbers or $18 per share on FY24E numbers.

Toward the end of his letter, Raper said that he plans to continue to be a long-term shareholder of Bragg. “By calling for a sale of the company now, I only seek to preserve, and finally unlock, that latent value for the benefit of all stakeholders,” he explained.

Earlier this month, Bragg confirmed that its current chief operating officer and president, Lara Falzon, gave resignation notice. At the time of the announcement, the company confirmed that she would step down from the two roles, effective from the end of the year.

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Several weeks ago, the casino giant MGM Resorts suffered a devastating cyberattack that forced it to shut down multiple systems. In the wake of the attack, the company was warned that its credit score might be lowered while its stock plummeted. Equity analyst David Katz, however, is optimistic that the casino juggernaut will make a quick recovery.

According to Katz, the casino and hospitality company’s stock, trading for $36.93 as of the time of this writing, is likely to rebound to $69 in the near future.

Katz told investors that the cyberattack is a singular event that is unlikely to affect MGM’s business in the long term. While the attack is certainly going to impact the casino company’s Q3 and probably Q4 results, much of the impact is likely to be covered by insurance, leaving the 2024-2025 time frame intact.

Katz has decreased his estimates for MGM Resorts’ Fiscal Year 2023 results. Previously projecting $15.461 billion in revenue and $4.642 billion in adjusted cash flow, the analyst now projects $15.251 billion in revenue and $4.51 in adjusted cash flow.

MGM Is Poised for Quick Recovery

Commenting on the attack, Katz said that it was the result of a single human error. In any case, the attack, which was part of a larger operation affecting several companies, presents a “set of issues on how companies deploy resources to mitigate risk,” Katz added.

In addition, he pointed out that the presence of insurance provides MGM with a lifeline that will likely prevent a lingering impact on its shares. The upcoming Formula One Las Vegas Grand Prix and Super Bowl game in Las Vegas will likely make up for much of MGM’s losses, Katz predicted.

Katz concluded that MGM Resorts is poised for success in Las Vegas and is already recovering in Macau, sparking optimism about future trading.

In other cyberattack-related news, MGM Resorts recently contacted its loyalty members, promising them that their loyalty will be rewarded “to the fullest and more.” The company asked its customers to remain patient and be on the lookout for further announcements.

Despite MGM’s best efforts to make things right, certain MGM players launched lawsuits against the company because their data got compromised. Affected Caesars Entertainment customers launched similar lawsuits.

Speaking of Caesars, the MGM competitor recently offered two years of IDX services to its loyalty program members whose data got compromised.

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Caesars Entertainment, a leading player in the gaming industry, has seen a 14.37% decline in its shares over the past month, primarily due to recent cybersecurity challenges and concerns about economic headwinds. However, following meetings with Caesars executives at the Global Gaming Expo (G2E) in Las Vegas, Stifel analyst Steven Wieczynski published a report reiterating a “buy” rating, suggesting substantial room for growth.

Short-Term Challenges Present Ongoing Difficulties

A recent ransomware attack posed a significant cybersecurity challenge for Caesars, forcing the operator to pay $15 million to the group known as “Scattered Spider.” Fortunately, this expense was covered by a cyber insurance policy, helping to mitigate the impact on the company’s financials. However, the attack’s damage had negative consequences extending beyond monetary damage.

Concerned customers filed lawsuits against Caesars, alleging the operator failed to protect sensitive customer data. The company admitted that the breach could have leaked information regarding its loyalty rewards members, like driver’s licenses and social security numbers. Such data could pose significant identity theft risks in the wrong hands, causing substantial discontent among affected clients.

Additionally, concerns about a possible recession and labor disputes in Las Vegas, where the company operates, have contributed to weakness in the stock. A Las Vegas union representing 53,000 hospitality workers voted in favor of a strike, which could coincide with significant events on the Strip. However, Caesars is working hard to resolve this crisis and avoid disruptions.

Caesars Retains Its Growth Potential

As a result of these challenges, Caesars Entertainment stock (NASDAQ: CZR) has declined 14.37% over the past month. However, Stifel analyst Steven Wieczynski’s recent report remains optimistic regarding the company’s prospects, raising its price target to $80. Wieczynski is confident that Caesars boasts strong fundamentals and remains on track to reduce its outstanding debt by at least $1 billion this year.

Despite worker protests, demand on the Las Vegas Strip remains robust, and Caesars’ continued investments into the growing iGaming and sports wagering segments should pay significant dividends. July saw the operator make its first foray into the Puerto Rico market, challenging BetMGM’s position in the region. These positive developments present potential catalysts for improving share prices and long-term success.

We believe the market continues to discount the long-term free cash flow potential of Caesars’ brick & mortar business.

Steven Wieczynski, Stifel analyst

Caesars’ recent cybersecurity woes and broader economic uncertainties significantly impacted the company’s share price. However, robust fundamentals mean these challenges should not have a lasting impact, increasing the likelihood of the company’s stocks rebounding. While challenges remain, Caesars Entertainment’s strategic positioning within the gaming industry could pave the way for future growth and value creation for shareholders.

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Following its suboptimal performance in Q1, the company posted Q2 revenue of $33.8 million, marking a slight year-on-year decrease from last year’s $35 million.

The company’s B2B revenue plummeted from $14.2 million to $9.9 million because of a decrease in contractual revenue rates. Luckily, the decline in the B2B vertical was offset by an increase in B2C revenue, which increased from $20.8 million in Q2 2022 to $23.9 million in Q2 2023.

The company’s unaudited adjusted EBITDA was $2 million in Q2 2023. This is a noticeable increase from the $1.35 million recorded in Q2 2022.

GAN’s net loss for the period was $18.4 million, a significant year-on-year decline from the $38.3 million the company lost in Q2 2022. Operating expenses for the period were also significantly lower at $32.8 million in Q2 2023 against $62.3 million during the same period last year.

Furthermore, the company reported cash and cash equivalents of $43.4 million as of June 30.

In Q2 2023, GAN’s B2C active customers decreased slightly because of the company’s underperformance in the LATAM region and its decision to leave the Ontarian iGaming market.

In the meantime, the company expanded its presence in the United States, launching its B2B betting technology with WynnBET in six states, namely Arizona, Colorado, Indiana, Louisiana, Tennessee and Virginia. This brings the total number of states where GAN Sports operates to nine.

CEO Smurfit Braces for Improved Performance in H2

GAN’s chief executive officer, Dermot Smurfit, commented on his company’s performance in the second quarter of the year. He praised the execution of the company’s business plan and noted that GAN’s international B2C operations continue to go from strength to strength.

Smurfit also praised the rollout of the company’s GAN Sports division in multiple markets and the progress on the new GameSTACK 2.0 version of the platform. The CEO added that GAN Sports’ presence in nine US states and the company’s international momentum lead him to expect significant improvements in the company’s performance in the upcoming half of the year.

Smurfit also teased that the company has received “indications of interest” from bidders that might seek to acquire a part of GAN or GAN in its entirety. The CEO said that a special committee will evaluate those alternatives.

However, no agreement has been reached as of yet, Smurfit emphasized.

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The global gaming supplier that creates systems, content, and hardware connecting iconic titles across all channels has sent the proposal to the board of directors governing its social casino arm SciPlay Corporation. 

Provided the proposal will be received and accepted, SciPay would turn into Light & Wonder’s wholly-owned subsidiary. 

$20 per Share in an All-Cash Transaction

The acquisition proposal that Light & Wonder was “pleased to propose” mentions a possible merger that would see SciPlay’s shareholders, different from Light & Wonder and its subsidiaries, receiving $20 in cash per share for every SciPlay Class A common stock owned. 

This would lead to an enterprise value of $2.1 billion for the online casino arm as well as a premium of 28.5% determined on their closing stock price recorded on May 17, 2023, which was the last day of trading prior to the proposal being officially made. 

Should Light & Wonder manage to successfully acquire the remaining 17% equity interest that, at the moment, it does not own, it would pay a total of $422 million. The offer is regarded by Light & Wonder as a way of bringing its businesses together by merging their balance sheets.

At the same time, the company expects the transaction to trigger a “seamless collaboration with SciPlay” that would add more momentum to its cross-platform strategy which is always well-developed.

If it would be given the green light, the acquisition would offer more flexibility for investing cash across the enterprise, thus generating more value for shareholders. At the start of March, the company announced it recorded a 17% consolidated revenue growth for the year, which was expected to assist it with its growth plans. 

A similar Acquisition Proposal in 2021, Rejected 

The current proposal comes after the company, which is fully committed to its responsible corporate efforts, made a similar effort to acquire the rest of the outstanding shares in SciPlay in 2021. 

The proposal was withdrawn in December of that year because it met resistance from the same board of directors that is not left pondering the decision.

At the moment, Light & Wonder owns around 83% of SciPlay’s economic interest and 98% of its voting interest. 

Light & Wonder’s chief executive officer Matt Wilson explained that SciPlay’s public shareholders would benefit from a “compelling” mix of certainty, speed, and premium value. 

Wilson also explained that the company does not expect the consummation of the transaction to ask for any approvals from regulators or shareholders, in an attempt to significantly simplify and speed up the transaction. 

Light & Wonder also used the letter sent to SciPlay Corporation’s board of directors to explain that, in their capacity as a shareholder of SciPlay, they would not vote in favor of any alternative merger, sale, or different type of corporate transaction regarding SciPlay, or proceed to sell or divest any portion of its ownership interest.

At the end of April, the company announced an expansion of its OpenGaming content with Rogue Games.

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The issuer of actively managed exchange-traded funds (ETFs) has announced it sold 294,143 shares of the operator in the context of the stock collapsing.

This way, Cathie Wood’s ARK Investment Management took part in a wider market sell-off stimulated by the disappointing forecast for jobs in the private sector in the previous month.

One of Cathie Wood’s Largest Stock Sales to Date

The transaction that saw the Florida-based ARK sell 252,502 shares from the ARK Innovation ETF and 41,641 shares from the ARK Next Generation Internet ETF represents one of the largest stock sales since the ARK began building its stake in the gaming company over three years ago.

The two transactions came after similar decisions were made at the end of February when the money manager bid farewell to 207,747 shares of the gaming operator from the same duo of ETFs.

At the moment, DraftKings’ shares in which ARK Investment Management continues to be one of the most important owners have gone up by close to 59% since the beginning of the year.

Argus Analyst Gives “Buy” Rating

Just one day after the significant share trimming announced by Cathie Wood’s ARK, Argus’ sell-side analyst John Staszak issued a note to clients, reinforcing the “buy” rating of the shares and reiterating a price target set at $22.

The figure marks an increase of around 22% from the close value registered on April 5. The same analyst gave an estimate on DraftKings’ ability to trigger a revenue of $3.1 billion in the current year, from $2.95 billion which is the company’s midpoint for the 2023 guidance, and also over the $3 billion figure estimated by Wall Street.

Staszak also used the decreasing costs with customer acquisition to explain to clients that DraftKings has the potential to turn profitable during Q3 2024. After that, the Boston-based operator could possibly generate a 25% earnings growth rate over the course of the following five years.

DraftKings had also spoken about its expectations to become profitable next year, even though it failed to name a quarter when the respective results might come up.

The operator’s co-founders Jason Robins and Matthew Kalish also announced they sold 600,000 shares of the company’s stock two weeks prior to Cathie Wood’s ARK Investment Management’s announcement.

Earlier in the week, DraftKings announced it requested to be allowed to provide sports betting markets on the upcoming Boston Marathon, one of the most popular races for both amateur and pro athletes.

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