Financial services giant Macquarie has thrown its weight behind Genius Sports Limited, a sports betting data provider, with an optimistic Outperform rating. The move comes as the company positions itself at the forefront of the surging wave of NFL betting, driven by factors such as regulatory changes, the widespread embrace of sports betting, a shift towards in-game wagering, margin expansion, organic expansion, and strategic mergers and acquisitions.

Chad Beynon of Macquarie Predicts Genius Sports Shares to Double in One to Two Years

Macquarie analyst Chad Beynon outlined the catalysts contributing to Genius Sports’ potential growth, emphasizing its role as a vital contributor to sports fan engagement. Beynon envisions a doubling of the company’s shares over the next one to two years, attributing this growth to the significance of Genius Sports’ player statistics, artificial intelligence (AI) data, and its capacity to bring this data to life.

The report predicts a robust growth trajectory for the North American online sports betting market, estimating a Compound Annual Growth Rate (CAGR) of 24% through 2026, culminating in a gross gaming revenue of $22 billion. Macquarie suggests that Genius Sports is well-positioned to outpace this growth curve, driven by increased event utilization, the introduction of new products, and the expanding popularity of in-game betting.

A noteworthy factor working in favor of Genius Sports is the secure revenue stream guaranteed by the National Football League (NFL), projected to reach a substantial $126 billion from its media and TV deals. According to Beynon, Genius Sports now stands at the technological epicenter of the NFL’s rising tide, positioning itself as a crucial player in the sports betting landscape.

Genius Sports’ Stock Surges 2.27% After Macquarie Sets Ambitious $11 Price Target

To quantify their bullish outlook, Macquarie has set a price target of $11 on Genius Sports, representing a 77.4% upside from the current closing price of $6.20. This valuation is based on a 15X multiple of the 2026 EBITDA estimate and a free cash flow yield of 4.7%.

In response to Macquarie’s endorsement, Genius Sports experienced a 2.27% surge in premarket trading, reaching $6.30. This positive momentum comes on the heels of a year that has seen the company’s stock climb by an impressive 73.67%, further solidifying its position as one of the top-performing sports wagering equities.

Last month, Genius Sports reported a substantial 29.3% increase in Q3 revenue, reaching $101.7 million, leading to an upward revision of its full-year guidance. 

With growth across all segments, including a notable 34.1% rise in the betting technology division, the company’s year-to-date revenue has surged by 21.3%, totaling $285.8 million, prompting an adjusted full-year guidance of approximately $412.0 million in group revenue and $53.0 million in group adjusted EBITDA.

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The Philippine authorities continue the crackdown on Philippine Online Gaming Operator-related crime. Previously, authorities busted an illegal POGO operation that was involved in human trafficking and found that a number of local police workers may have been involved.

In the wake of the raid, the Philippine Department of Labor and Employment (DOLE) will undergo a thorough assessment of the Alien Employment Permits (AEPs) which allow foreigners to work for local gambling operators and companies.

As a result, the DOLE will look into as many as 42,000 foreigners working for POGO companies and take punitive action if it learns that some of them are involved in crime. The department warned that people who have participated in fraudulent activities risk the cancelation of their AEPs or even prison time.

Senate Members Proposed Blanket Ban on POGOs

The action comes amid intense calls for a crackdown on POGOs and the review of AEP workers. The Philippine Senate recently underscored the importance of a blanket ban on offshore operators.

Senator Joel Villanueva slammed the POGOs, saying that these companies should not be allowed to operate and freely offer their services when their licenses have been revoked. The head of the Senate Committee on Ways and Means, Sherwin Gatchalian, on the other hand, said that POGOS should be kicked out from the Philippines as soon as possible.

The Philippines has a serious problem with AEP-related fraud as foreign criminals would oftentimes obtain their permits illegally and then buy a password. This creates a dangerous internal threat for the Asian country and has prompted the authorities to act.

Incidents often involve illegal gambling, human trafficking and gun crime and sometimes end in killings. A recent attack, for example, left two people dead and one severely injured. Authorities believe that the attack might also be related to POGO-related crime.

In the meantime, the Philippine government continues its efforts to exit the FATF grey list.

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American gambling and hospitality juggernaut MGM Resorts International recently suffered a devastating cybersecurity issue that forced it to shut down computers and websites and crippled its operations. In one of its latest statements, the company revealed that its properties are now operating normally.

MGM Resorts informed consumers that its employees are ready to help guests with any intermittent issues. The company also announced that any reservations booked between September 13 and 24 can be canceled or changed without any fees.

We are pleased that all of our hotels and casinos are operating normally. Our amazing employees are ready to help guests with any intermittent issues. We thank you for your patience and look forward to welcoming you soon.

MGM Resorts statement

However, the company noted that certain loyalty program functionalities may still be unavailable. At the time of MGM’s notification, the online reservation system was still down, which is why the company prompted customers to book reservations at 877-353-987.

MGM Resorts did not disclose when it expects these offerings to become available again.

The Casino Giant Is One among Multiple Victims

MGM Resorts was hit by a cyberattack it described as a “cybersecurity issue” earlier this month. The attack came around the same time Caesars Entertainment was also targeted by hackers.

Later identified as the Scattered Spider group, the hackers reportedly used social engineering to gain hold of valuable company data. The attack caused Moody’s to warn MGM Resorts that its credit rating might be lowered. At the time, MGM Resorts refused to comment.

In the meantime, reports claimed that Caesars Entertainment had been forced to pay a ransom to the hackers in order to secure its business.

Identity management specialist Okta recently spoke with Reuters on the matter, confirming that the ones behind the attack are the ALPHV and Scattered Spider groups, likely working in tandem. Okta noted that MGM Resorts and Caesars Entertainment are not the only victims of the cyberattacks, disclosing that three other companies were also affected.

Elsewhere, the online crypto betting giant Stake.com also suffered a cyberattack. According to the FBI, the crypto casino was targeted by the notorious North Korea-backed Lazarus Group, which stole tens of millions of dollars in cryptocurrencies from the company.

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Genius Sports, a data, technology and broadcast partner that powers the global ecosystem connecting sports, betting and media, has published its financial results for the second quarter of the year, highlighting its recent successes. The company’s revenue for the period exceeded the company’s expectations, causing it to update its guidance.

As reported by Genius Sports, its revenue exceeded the Q2 guidance of $80 million, sitting at $86.8 million at the end of the quarter. This represents a year-on-year increase of 22%.

Betting technology revenue increased by 27% year-on-year. Media technology and sports technology revenues, on the other hand, increased by 22% and 3%, respectively.

The company also reported group adjusted EBITDA of $15.7 million, which exceeds the guidance of $14 million. Year-to-date group adjusted EBITDA, meanwhile, more than quadrupled year-on-year to a stellar $24 million.

Furthermore, Genius Sports reported lower loss from operations. Whereas the company lost $39.7 million in Q2, 2022, it lost only $7.8 million in Q2, 2023. The favorable results were attributed to the improved underlying performance but the improvement was sadly offset by a $29 million reduction in gain on foreign currency.

Genius Sports updated its group revenue and adjusted EBITDA guidance for the year, following its spectacular performance during the quarter. According to Genius Sports, the company now expects group revenue to reach $410 million, instead of $400 million.

Adjusted EBITDA guidance, meanwhile, was updated from $49 million to $52 million. In addition, the company expects to expand group adjusted EBITDA margins from 5% in 2022 to 13% in 2023.

Q2 Was a Productive Period for the Company

In its report, Genius Sports also highlighted some of its achievements in Q2, which include, among other things, an extension of its strategic partnership with the National Football League. Moreover, it extended its official data partnership with Football DataCo.

Another sports agreement was an AI-powered tech expansion with the EPL and EFL through cutting-edge Second Spectrum technology. Genius also supplied the FIFA Women’s World Cup Australia & New Zealand 2023 with innovative digital features, once again using Second Spectrum.

Genius Sports also expanded its integrity program with The German Football Association and secured a bunch of accolades, including Best Technology for College Sports at the Sports Technology Awards 2023 and the Sports Betting Supplier award at the EGR North America Awards 2023.

CEO Mark Locke commented on the performance. He said that the company has reached a “significant inflection point in its business.”

Locke said: “The ongoing success through the second quarter perfectly demonstrates our balanced approach in delivering near-term results, while accelerating Genius towards our long-term growth and profit targets.”

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The murder of a young woman has shocked the Philippines. Rizia Mae Pardillo Ycot, 24, was serving her shift as a Small-Time Lotteries (STL) vendor in the city of Cotabato City when she got shot in the head by a heinous criminal. The suspects are the criminal gangs running illegal lottery operations.

STLs are legal lottery booths that offer forms of legal lottery gaming to local customers. Unfortunately, local gangs believe STLs are undermining their illegal gambling operations and have come to detest the booths.

The pressure on STL vendors is, sadly, nothing new. Many people working in the sector have reported having been threatened by gangs on countless occasions. Locals are almost certain that Ycot was shot by a gang member as her assailant did not steal anything. The crime was likely meant to scare other STLs into giving up on their business.

While the local gangs have previously refrained from murdering STL vendors to prove a point, it seems that illegal operators in the Philippines are now ready to do anything if that will keep them in power.

Halting Lotteries Will Allow the Police to Investigate

Now, several weeks after Ycot’s murder, Bruce Matabalao, mayor of Cotabato City, has ordered the temporary shutdown of all lotteries in the city. In the wake of the recent killing, city officials are concerned about the well-being of STL vendors.

The decision to halt STL operations in the city comes as Querubin Manalang, director of the city police, asked Matabalao to take action. Matabalao thus ordered the arrest of anyone selling any type of lottery, regardless if they were authorized to do so or not.

Lotteries will remain shut down until officials form a plan to tackle the issue and investigate Ycot’s murder. Manalang, who proposed the measure, said that the temporary stopping of operations will provide his team with the time it needs to do its job.

Other Recent Developments

In other news, the Philippine Offshore Gaming Operator (POGO) sector recently became the object of public criticism. According to a survey, the majority of Filipinos believe that POGOs are harmful to society and the economy and encourage a sinful lifestyle.

In the meantime, the PAGCOR, a body that regulates gambling in the country, just terminated its contract with an allegedly fraudulent auditing firm. As it turned out, the company, Global ComRCI, had provided fake documents during its application for becoming PAGCOR’s third-party auditor.

The regulator will audit POGOs by itself until it finds a new partner.

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