Bet On It: Flutter buys Italian operator in latest international buyout

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: Wynn Resorts (WYNN) and certain executives agreed to pay $70M to settle a class action accusing the company of securities fraud related to sexual misconduct allegations against founder Steve Wynn, Daniel Seiden of Bloomberg reported, citing a court filing. An email from Wynn said insurance will cover most of the settlement while the company will pay $9.4M, Bloomberg added.

Caesars Entertainment (CZR) launched the Caesars Sportsbook Muckleshoot app, which is now accepting mobile sports bets at Muckleshoot Casino Resort in Auburn, Washington. Guests 21 and older who are interested in wagering on mobile devices can download the Caesars Sportsbook Muckleshoot app and must be physically present on the property at Muckleshoot to verify their registration for an account and place wagers during their visit, in accordance with state law. The Caesars Sportsbook Muckleshoot mobile app extends the sports wagering experience beyond the on-premise Caesars Sportsbook at Muckleshoot, which accepted its first bets in 2022. The app provides a sports wagering experience with technology like live scoreboards, live streaming games, quick and secure payouts, and daily special odds boosts and promotions from anywhere inside the casino.

Sportradar (SRAD) is set to launch micro markets, the next generation of in-play betting products, across sports, opening fresh revenue streams for operators. In a strategic move, Sportradar, in collaboration with Tennis Data Innovations, or TDI, is introducing micro markets for ATP tennis matches this October. Sportradar currently offers micro markets across other sports including soccer and table tennis. By leveraging advanced artificial intelligence and deep tennis data from TDI, Sportradar will offer operators a solution that processes hundreds of thousands of data points per match. The result is eight distinct micro markets expected to generate approximately 1,500 new betting opportunities per match.

Flutter Entertainment (FLUT) announces that it has agreed to acquire Snaitech S.p.A., which it calls “one of Italy’s leading omni-channel operators,” from a subsidiary of Playtech plc, for cash consideration based on an enterprise value of EUR 2.3B. “The acquisition fully aligns with Flutter’s strategy to invest in leadership positions in international markets. We expect the transaction to close by Q2 2025 and it is expected to be immediately accretive to earnings per share. Snai is the number three online operator in the Italian market with a 9.9% share in 20232 and 291,000 average monthly players3. Online revenue and Adjusted EBITDA have grown at a compound rate of 26% and 32% respectively, in the four fiscal years to 20233. This is supported by a strong retail presence with over 2,000 sites3 driving a number two retail share position in both betting of 19% and gaming of 14%. Snai generated 100% regulated revenue of EUR 947M (which is after the deduction of gaming duties) and Adjusted EBITDA of EUR 256m in financial year 2023, of which 50% was generated online. On completion, Flutter will assume the gold medal position in Italy with a ~30% online share when combined with its existing Italian business4, which will deliver efficiency benefits in a key market for the Group,” Flutter stated.

The Major League Baseball players’ union has taken legal action against DraftKings (DKNG) and bet365 Group, accusing them of using players’ names, images and likenesses, or NIL, in advertisements without permission, Jef Feeley of Bloomberg reported. In a lawsuit filed in federal court in Philadelphia, MLB Players Inc. invoked a Pennsylvania law that permits individuals to sue for unauthorized commercial use of their NIL. The union’s claims include misappropriation of publicity and identity, as well as unjust enrichment.

FanDuel announced it has appointed Caralyn Cooley as the company’s new chief people officer, or CPO. Cooley will join FanDuel’s executive leadership team reporting to CEO Amy Howe. In her role as CPO, Cooley will be responsible for the continued acceleration of FanDuel’s people strategy. She will assume leadership of FanDuel’s people organization inclusive of human resources, talent acquisition, diversity, equity and inclusion, organizational effectiveness, employee branding, training, learning and development, compensation and employee benefits in service to the company’s casino, sports and operations business units. Cooley most recently served as executive VP, chief people officer for Bowery Farming.

Gannett (GCI) announced a multi-year strategic partnership with BetMGM (MGM). As part of the agreement, BetMGM will serve as the preferred online sportsbook and casino partner for USA Today Sports providing sports betting odds and betting information across the expansive USA Today Network in more than 200 local U.S. markets across 43 states with more than 300 digital news and media brands in the portfolio.

Caesars celebrated the first in-person sports wagering location in the state of Maine at the newly opened sports entertainment venue, Oddfellahs, powered by Caesars Sportsbook. Made possible through Caesars Sportsbook’s partnership with First Tracks Investments LLC, the new sports bar brings in-person sports betting to the Pine Tree State for the first time.

FALSE START: Penn Entertainment’s (PENN) launch of its sportsbook app in New York will not happen until at least Week 4, despite earlier assurances that ESPN Bet would be available before NFL betting began, Sam McQuillan of Legal Sports Report wrote. The delay is due to the transition of the New York sports betting license that Penn acquired from WynnBet in February. A spokesperson from the state indicated that Penn’s application will likely be reviewed during a meeting of the New York State Gaming Commission on September 23, following the submission of necessary paperwork in August. As a result, Penn will miss at least the first three weeks of NFL betting. The company’s year-end guidance reportedly projected EBITDA losses of $135M, factoring in a full NFL betting season in New York. In early August, Penn CEO Jay Snowden had indicated that the app would be live in New York by the end of this month, specifically before college football week one, but emphasized that this was “pending regulatory approval.”

AUGUST GGR: In August, digital gross gaming revenue, or GGR, is projected to reach $1.39B, reflecting a 32% year-over-year increase, according to BofA. This marks a slowdown from July’s 38% growth and aligns with Q2 results. Online sports betting GGR also rose by 32% year-over-year in August, down from July’s 45% and Q2’s 38%. Meanwhile, iGaming GGR grew by 31% year-over-year in August, stable compared to July and ahead of Q2’s 24%. The overall handle increased by 37% year-over-year, consistent with July and Q2 trends. The firm estimates a market-wide hold of 9.1% in August, which is down about 30 basis points from August 2023. By operator, BofA estimates FanDuel’s hold at around 10.5%-11%, followed by DraftKings at approximately 8.5%-9%. For September 2023, the hold was 9.7%. The firm anticipates that negative outcomes in NFL week one were balanced by “stronger” results in week two, suggesting a potential decline in hold as the quarter progresses, it told investors. September 2024 will feature one additional NFL Sunday and Monday compared to 2023, which could enhance handle growth. In August, online sports betting market shares were estimated at 41% for FanDuel, 34% for DraftKings, 7% for BetMGM, 5% for Caesars, and 3% for ESPN Bet. In iGaming, both DraftKings and FanDuel held a 25% share, with BetMGM at 20%.

NFL WEEK 2: The NFL plays a crucial role in driving results for U.S. sports betting operators, given the high volume of wagering on football compared to other sports, according to Canaccord. This trend is especially pronounced in Q3, as the early months of the quarter typically have a lighter sports schedule, the firm told investors. Historically, September betting volumes often match the total for July and August combined.

Based on Macquarie’s hold model, the firm calculated NFL market hold of 16% for the week of Sept 9–15, above its long-term average of 9%. The analyst estimates total sports betting market hold of 12% for the week of September 9–15, assuming NFL hold of 16% and 9% hold for other sports. New York reported sports betting hold of 7% for the week of September 2-8, below the long-term average of 9% and directionally in line with Macquarie’s estimate of 8%. Handle grew 14% YoY vs the same week last year. Based on NY data, it estimates 3Q hold is trending to 9.3% through September 8, the firm noted.

DraftKings had a “strong” weekend with 35% of new app download share, up from 27% in week 1, and ahead of FanDuel at 23% of new download share, according to Bofa. Consistent with app download data, the company was ranked number 10 in the overall app store on Sunday, followed by FanDuel in the 30s. In the sports category rankings, ESPN media app was number one, followed by DraftKings and FanDuel in the top five, Hard Rock, Bet365, and BetMGM in 10-20 range, Betr, ESPN BET, and Pick6 in the 20-25 range, and Caesars in the 30s. DraftKings also led daily active user share with 22% share, ahead of FanDuel at 17% and ESPN Bet at 17%.

ADDITIONAL ANALYST COMMENTARY: BofA raised the firm’s price target on Boyd Gaming (BYD( to $72 from $68 and keeps a Buy rating on the shares after the Norfolk City Council voted last Tuesday to approve a new casino by the Pamunkey Indian Tribe and Boyd. While details are pending, the firm is positive on this news as an important growth catalyst for Boyd, while also highlighting the “very strong demographics” in the Norfolk/Hampton area and an attractive Virginia tax rate. The firm cites a modest improvement in peer valuations and Boyd’s FanDuel stake for its price target hike.

Brean Capital raised the firm’s price target on Entain (GMVHF) to 1,030 GBp from 1,020 GBp and keeps a Buy rating on the shares

Canaccord raised the firm’s price target on Sportradar to $18 from $16 and keeps a Buy rating on the shares. The firm met with management that highlighted just how important the company’s products and services are to sportsbooks and media companies around the world. The company hired a US-based CFO and Head of IR which should enable t to better communicate its story to the U.S. investment community, which coupled with EBITDA growth and cash flow generation create a “compelling” entry point for both growth- and value-oriented investors, said the firm.

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), Gambling.com (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).