The Michigan Gaming Control Board reported that Detroit casinos produced $103.7 million in October revenue, which is a 26.9% year-over-year increase.
Detroit casinos got back to normal this fall, posting a revenue number in line with what they earned in 2022. That’s a significant improvement over last October, when earnings were impacted because of a 47-day casino-employee strike that began in October and stretched into early December.
November is likely going to be a bigger year-over-year increase, as the strike lasted three weeks for two of the casinos and the full month for MGM Grand Detroit.
The pandemic in 2020 and the strike from last year knocked Detroit casinos out of whack. It now appears that things are returning to a level of normalcy.
Hello and welcome to this week’s Igaming Focus newsletter!
On the slate this week:
Customer-friendly results to hit operators’ Q4 margins
But importance of product and trading highlighted as FanDuel minimizes impact of customer-friendly results.
Weak spot: Customer-friendly sports results will impact the Q4 margins of all operators in the space. DraftKings commented on the trend during its earnings call last week, with chief executive Jason Robins describing it as “the most customer-friendly stretch of NFL sport outcomes we have ever seen” and forcing the company to cut its full year 2024 EBITDA by -30% ($120m), although the Jefferies team noted that the “$175m sports margin impact (should be) partially offset by $55m of cost efficiencies.”
Flutter’s material difference
Leading OSB group in the U.S. confident of pricing and trading abilities as sports results impact industry.
If it wasn’t for bad luck: FanDuel parent company Flutter Entertainment’s losses dropped 56% YoY to -$114m in Q3 as the group’s chief executive Peter Jackson praised his trading teams’ “pricing accuracy” and said it was “driving the material differential that you’re seeing” when it comes to market share in the U.S. However, he also noted that punter-friendly sports results at the start of Q4 would impact the next set of results.
Results roundup: Better Collective, Genius Sports, Light & Wonder, IGT, Gentoo Media
Better Collective revenues were up 8% in Q3 to €81m and EBITDA before special items rose 14% to €22m, but organic growth was down 6% due to lower U.S. activity than expected and an “accelerated slowdown” from operators in Brazil ahead of regulation. Recurring revenue was up 14% to €53m and made up 65% of group revenues.
Genius Sports had a strong Q3 as it beat forecasts and revenues came in +18% YoY at $120m and EBITDA was up 2% to $26m. Its betting tech division was up 30% and +7% vs. expectations, although its media unit missed its revenue target due to contract renegotiations.
Light & Wonder reported a 15% rise in Q3 revenues to $537m and said the resolution of its IP dispute with Articocrat over the Dragon Train slot machine would not stop it from hitting its 2025 EBITDA target of $1.4bn.
IGT reported its first set of results as a lottery-only company following the $6.3bn sale of its gaming and online gambling divisions to investment house Apollo in the summer as Q3 revenues were down 2% YoY to $587m and adj. EBITDA was -6% at $264m.
The affiliate group Gentoo Media (previously known as GIG Media) reported 35% YoY growth in Q3 revenues at €30.4m. The group rebranded to Gentoo following the spin-off of GIG’s platform and sportsbook during the period and said its “focus on higher-value markets” led to deposit amounts rising 36%.
Tax highs and lows in LA and MO
Louisiana and Missouri outline very different views on OSB tax.
Spicy Cajun taxes: Louisiana legislators are assessing a proposal to up the sports betting tax rate in the state from 15% to 51% of operators’ gross gaming revenues. Republican Representative Roger Wilder’s HB22 bill would make Louisiana the highest taxing jurisdiction in the U.S. alongside New York and aims to put a halt to operators offering promotional credits to players.
Missouri electors have voted to pass online sports betting legislation and operators can expect a tax rate pegged at 10% with federal handle taxes and promotions deductible. “This allows for a very favorable margin profile for the operators of scale,” said Deutsche Bank, as the tax structure will be “similar to that of Michigan, which is currently garnering an effective tax rate of ~5% of GGR.”
Endeavor okays OpenBet and IMG management buy out
Price drops massively as Endeavor continues to seek acquirer for IMG.
Deal of the century (not): Endeavor Holdings chief executive Ari Emanuel has greenlighted and provided financing for a $450m management buy out of the group’s sports betting solution specialist OpenBet and betting data provider IMG.
U.K. is an advertising outlier in Europe
Study by campaigning group says U.K. “has the most relaxed” ad regulations in Europe.
Out and out: A new study published by the polling firm Ipsos in partnership with the University of Bristol in the U.K. and commissioned by the charity GambleAware has found that Great Britain “has the most relaxed gambling advertising restrictions in Europe” and stands as an outlier in comparison to many European markets “despite mounting evidence of harm.”
Brazil’s licensing price tag
Several applicants are balking at price of a licence in South America’s largest economy.
Numbers dropping off: As Brazil gears up for its regulated igaming launch in January, hundreds of operators are said to have applied for licences, but the final number remains uncertain as cost and the prospect of a highly competitive market is deterring many of them.
