Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hello Gewillia, the fact that Fox Corp interprets the terms of the option agreement that is different to that of Flutter suggests to me that the terms are wishy washy, not well defined as it should be.
However, the outcome of the arbitration is not as important as a clear resolution of the dispute, so that the more important business of listing the Fanduel franchise in an IPO can begin.
Judging by the valuation being currently afforded to Draftkings - the only listed pure play on-line sports betting business - I can't help but think Flutter has missed the boat somewhat, with the peak valuation recorded in March 2021.
Unlike Draftkings, Fanduel has a clear path (so said Flutter's management) to generate positive earnings by 2023.
I'm not a betting man, but I wish you good luck on your bets on Everton FC and Liverpool FC.
Today's results continue to highlight the importance of Fanduel, which should grow from nil in 2018 to become the largest division of the group in 2022/23, accounting for about a third of total revenue. This is before two large potential online-spots markets - California and Florida - are yet to open up.
In the short term, there are two uncertainties facing the company: the UK government's white paper on gambling, and the arbitration case between Fox Corp and Fanduel in June (https://frontofficesports.com/fox-bet-struggles-amid-ownership-dispute-and-poor-reach/) which Flutter is odd on to win according to the company.
In two days' time, if Draftking's result on May 6 is positive, then the read across to Flutter will mean we'll have seen the bottom of it share price, and it should be able to climb steadily back to the 15000p levels or more.
I don't know if today's sharp fall in the gambling sector has anything to do with Goldman's downgrade:
Goldman Sachs cuts Entain price target to 2,100 (2,250) pence - 'buy'
Goldman Sachs cuts Flutter price target to 14,900 (18,000) pence - 'buy'
I agree, I'm too not surprised to see the relatively poor results but I'm surprised by the reaction in the stock market. The non-US business, with the exception of Australia, is not the exciting growth story for Flutter. The jewel is the Fanduel business in the US. In the USA, the online sports betting results are much better than expected, as stated in the RNS below.
I just averaged down at 9300p, having been filled my GTC buy order at 1000p.
The FanDuel brand
The FanDuel brand continues to resonate strongly with sports bettors. We have the leading share of voice in the market, with a focus on ensuring high levels of brand visibility throughout the year, not just during seasonal peaks. We have recently added and/or extended several key partnerships, including the NFL, NBA and with Pat MacAfee, locking in important assets for multiple years. We invested over $1bn in promotions, sales and marketing across our US business in 2021.
These competitive advantages have enabled us to consolidate our combined overall leadership position in the US online market, a market which has grown by over 120% since Q4 2020:
• Our sports-betting share in Q4 was 40%6
• Our online gaming share in Q4 was 20%6
• Our overall online market share in Q4 was 31%6
This leading revenue share is moving FanDuel closer to a position of profitability. In 2021 FanDuel became the first large scale online brand to generate a positive in-year contribution from sports betting and gaming in the US. FanDuel generated contribution of £9m ($14m) in 2021, with the positive contribution from more mature states (such as New Jersey, Pennsylvania, Indiana and Illinois) more than offsetting the material investment in large states newly launched in 2021 (Michigan, Virginia, Arizona and Connecticut).
Encouragingly as we expand into further new states, we are seeing faster adoption rates for online sports betting. This results in bigger initial losses in the early months post a state launch as we acquire more customers. However, when combined with better retention rates and our product mix advantages, we now expect new states to generate positive contribution after 12 to 24 months post launch, in contrast to the 18 to 30 month guidance we provided in 2019. Such guidance excludes a higher tax state such as New York.
Based on our current expectations relating to the timing of new state regulation in 2022 and 2023, we remain confident that our US business will be EBITDA profitable in 2023. The timing of regulatory developments and new state launches can be difficult to predict and any variance to our expectations across these two years could affect the timing of profitability being reached, particularly if an unexpected large state such as California launches in 2023.
Our online sportsbook is currently available in 14 states following successful launches in New York and Louisiana in early 2022. In New York, we have already acquired over 400,000 new sports betting customers since launch.
Hello Gewillia, thanks for the link. The article reveals the likely time table in May as you mentioned earlier, but unfortunately it didn't intimate what possible curbs or measures that they were considering.
Yes, I agree that most punters are greedy or foolhardy or both. Over the long run, the only sure bet is that the house always wins.
Hello Gewillia, thank you for your information. I tried just now to look for the Times article, but unfortunately I couldn't find it. Can you give me the link to it? I like to know how far are they thinking of clamping down gambling in the UK. The publication of the report may be the turning point for the gambling sector in the UK, I think.
In the USA, apart from the two major reasons that you mentioned, there is one other reason why every spots player is bleeding cash in the USA: they all give away between $100 to $200 free bets to sign up punters, leading to the inevitable situation where a smart punter can simply game it by signing up to all of them in their state! The sportbook operators have no choice but to offer it, as it is the only way to capture a meaningful market share.
You may recall that in the 3rd quarter 2021 earnings call, Flutter first detailed their expectation of turning a profit in the USA in 2023, primarily hoping that as the market settles - i.e. no new sign up bonus is deemed necessary as most potential punters have signed up already - they can retain some of the punters to stick around with them by being the biggest and hence offer the best odds possible. That hypothesis remains to be tested, of course.
Hello Roofer61, your purchase has proved timely today, while my limit orders to average down at 1000p are not hit.
The news over the weekend from the US has probably helped, I think:
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New York set a sports betting market record by bringing in $1.6B in action from January 8 to January 30 to break the previous single-month record set in New Jersey with $1.3B last October.
The leaders in the state so far are Flutter Entertainment's FanDuel (OTCPK:PDYPY), Caesars Sportsbook (NASDAQ:CZR), DraftKings (NASDAQ:DKNG), BetMGM (MGM, OTCPK:GMVHF), and BetRivers (NYSE:RSI).
February is expected to be a strong month as well for sports betting in New York, with the Super Bowl, Winter Olympics, NHL All-Star Game and NBA All-Star Games all attracting attention.
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I've a question: does any body know when the parliamentary committee on gambling report is due to be published?
https://www.timesunion.com/news/article/New-York-will-allow-mobile-sports-betting-16754472.php
New York's mobile sports betting starts Saturday
State Gaming Commission approves four platforms in time for Jets-Bills contest as well as Super Bowl
Rick Karlin
Jan. 6, 2022
Updated: Jan. 6, 2022 1:32 p.m.
Rush Street Gaming, which operates Schenectady's Rivers casino, is among four operators now authorized to offer mobile sports betting starting on Saturday. The State Gaming Commission approved four platforms in time for the Jets and Bills contest as well as Super Bowl.
Rush Street Gaming, which operates Schenectady's Rivers casino, is among four operators now authorized to offer mobile sports betting starting on Saturday. The State Gaming Commission approved four platforms in time for the Jets and Bills contest as well as Super Bowl.
Jeffrey T. Barnes/AP
SCHENECTADY — Football fans who want to place a mobile bet on Sunday’s Jets-Bills game or Giants-Washington contest will be able to do so, now that the state Gaming Commission has approved four platforms to begin taking wagers at 9 a.m. Saturday.
Caesars Sportsbook, DraftKings, FanDuel, and Rush Street Interactive are the first four platforms approved to accept bets.
Five additional platforms, which are conditionally licensed, are working toward satisfying the requirements to start taking bets, according to Gaming Commission officials. Those companies include Bally Bet, Bet MGM, PointsBet, Resorts World, and Wynn Interactive.
Thursday’s approval answers what had been a long-simmering question about whether the mobile platforms would be up and running by the Super Bowl.
Rush Street operates Schenectady’s Rivers Casino & Resorts, one of four full service non-Indian casinos currently open in the state.
Allowing the use of mobile sports bets, in which bettors can place wagers on their cell phones has been long awaited in New York, especially as other states already allow it, including New Jersey which borders the densely-populated downstate region of The Empire State.
There had long been complaints that New York bettors could cross the border into the Garden State to make their wagers, and in the process deny tax revenue that could have otherwise come to New York.
The minimum 51 percent tax rate that New York mobile operators must pay the state has also been controversial. Critics including the state Assembly’s Racing and Wagering committee Chairman Gary Pretlow have predicted the rate might deter platform operators from bidding or from offering the kinds of business-building promotions seen in others states.
Legislators were pushing for a 12-percent tax rate, which they say is in line with other states but during negotiations former Gov. Andrew Cuomo pushed for the higher rate.
Others have said the higher rate would work in a state the size of New York but have agreed it may result in fewer promotions, which typically reduce the operator’s profit.
For those who may have missed it, I thought it's amusing to put it here what one executive predict for 2022:
https://www.cnbc.com/2021/12/18/10-anonymous-media-execs-predict-2022s-industry-shaking-events.html
CNBC, PUBLISHED SAT, DEC 18 2021
Executive No. 8: A major sports betting company will go bankrupt or sell for ‘peanuts’
The mobile sports-betting craze has swept across the United States. As more states legalize sports betting, the industry around it has boomed. In October 2021, people wagered $7 billion for the month — 20 times more than in June 2018, according to Bloomberg.
Gambling companies have spent hundreds of millions of dollars in marketing as Americans flocked to sports betting. There’s a glut of them, said this executive, and at least one of the major sports betting apps — BetMGM, Penn National Gaming, PointsBet, Wynn, Caesars — will go bankrupt or sell “for peanuts” to one of its peers or market leaders FanDuel and DraftKings.
A Merry Christmas and Happy New Year to everyone. Happy Investing too.
Hi Gewillia, here is one website which is appropriately named: https://www.gamblingnews.com/ that I check ever so often for USA centric news.
Like you, I believe the impetus for growth will primarily come from the expansion of online sports and igaming in the US of A. However, over there, the likes of Draftkings have also seen their prices touching 52 weeks low, seemingly because the 51% tax rate for the New York state is a real dampener, it being one of the largest markets potentially in terms of demographics. As a result, I believe bookies will continue to entice Yankies to cross the state line to New Jersey to place their bets, as they are successfully doing at present.
I'm averaging down on Flutter and also take a new position in Entain at current price levels, the latter is still a prey potentially, even though it's a predator at present.
Below is the latest update from the Jefferies analyst.
Any body has any idea what "... debate over the bookmaking company continues" refers to specifically?
I was intending to average down if share prices drop below 1200p, but will now instead take a position in Entain, as I agree with Gewillia that the latter is still a potential target for takeover.
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Flutter Entertainment is defended by Jefferies with 60% upside called out
Nov. 17, 2021 7:33 AM ET Flutter Entertainment plc (PDYPY)By: Clark Schultz, SA News Editor
Jefferies sticks with a Buy rating on Flutter Entertainment (OTCPK:PDYPY) even as debate over the bookmaking company continues.
Analyst James Wheatcroft says Flutter's weak share price does not reflect the underlying performance of the business or the embedded value. Wheatcroft thinks the modest short-term regulatory and sports margin-related downgrades distract from the bigger picture of Flutter being a online market leader in the UK, Australia and the US. He thinks a basic sum-of-the-parts shows 60% upside to £200 for Flutter shares.
By Katherine Sayre
Updated Nov. 8, 2021 4:36 pm ET
New York state gambling regulators approved online sports-betting licenses Monday for nine operators including FanDuel Group, DraftKings Inc. DKNG 2.66% and BetMGM to operate in the new market.
The companies’ sports-betting revenue would be taxed at 51%, one of the highest among states where sports wagering is legal, said regulators. Still, New York’s huge population represents a potentially lucrative mobile betting market for gambling companies. New York has estimated that mobile gambling will eventually generate about $482 million in annual tax revenue from a $1 billion sports wagering market.
The New York State Gaming Commission voted on Monday to approve two groups of betting operators for 10-year licenses. In one group, FanDuel organized with DraftKings, the online division of Bally’s Corp. and BetMGM, a partnership of MGM Resorts International MGM -3.63% and Entain PLC.
The other group includes Rush Street Interactive Inc., RSI 0.10% Caesars Entertainment Inc., CZR -1.11% the online division of Wynn Resorts Ltd. WYNN -2.14% , PointsBet New York LLC and Empire Resorts Inc. doing business as Resorts World. The group also includes Kambi Group KAMBI 0.44% PLC providing some betting technology.
The approvals mean that New Yorkers will be able to make bets on their mobile phones; the state had previously limited sports betting to wagers made in person at casinos. Betting operators are in control of when they want to launch, regulators said.
New York is “vital to ensuring nationwide leadership in sports betting and iGaming over time,” BetMGM Chief Executive Adam Greenblatt said in a statement.
Among the companies rejected by New York state were Fanatics Inc., the sports-merchandise retailer looking to move into sports gambling, and Penn National Gaming Inc., which operates the Barstool Sports app.
DraftKings shares were up 2.4% on Monday, while Caesars shares ticked down 1.1% and MGM Resorts fell 3.6%. Penn National shares were down 4.5%
The prospect of operators turning over more than half of their profits after paying out winning bets may make the financial calculus for operating in New York more challenging than it is in other states with lower tax rates, gambling executives say.
In New Jersey, one of the biggest sports-betting markets, about 90% of wagers were placed online rather than inside a casino, this year through September, according to the state’s Division of Gaming Enforcement. Online sports wagering revenues are taxed at 14.25% in New Jersey.
Sports-betting tax rates in other states vary, including 6.75% in Iowa and 36% in Pennsylvania, according to the industry trade group American Gaming Association.
Thirty-two states and the District of Columbia have legalized sports betting, though not every state has embraced online gambling. Mobile wagering is operational in at least 18 states and D.C
Hello BilboMultiBaggin, thanks for your reply. Was that customer support for Paddy Power's apps in Europe or was that for the FanDuel apps in the USA? No matter which one it was, it was an awful experience.
So you didn't even have a chance to try out the apps' user experience, and now they lost you as a customer, and a shareholder. That doesn't auger well for the company's long term prospect, given the amount of competition out there vying for punters' money.
Hello Eighteen, Sain@vision, Gewillia, Yes, the results are very disappointing indeed. Having said that, it’s in the nature of gambling business that every so often the punters will have a run of good luck at the house’s expense, but in the long run, the house always wins as long as it manages its risk/odds with professional efficiency. Put it another way, a punter who wins today will more likely than not wager some more tomorrow until he loses all the winning eventually back to the house – that is how this thing goes.
This is how Jackson puts it:
“Bookmakers generally suffer when favourites win and chief executive Peter Jackson said this happened across the board last month, including Liverpool's Premier League hammering of Manchester United and world boxing heavyweight champion Tyson Fury's latest victory.
The run hit EBITDA by around £60m and Jackson said Flutter avoided another "bloodbath" overnight when short-priced favourite Incentivise came second in the Melbourne Cup horse race.
"It's what happens, occasionally you have a run of bad luck and it's not unhelpful for our punters that they get to see a winning streak," Jackson told reporters.”
The thing which I’m not aware of is, until you raised the issue, their poor execution and user experience with their apps, as I’m not a user of any gambling apps.
I would like to ask you this: the most important apps as far as Flutter is concerned for now is their Fan Duel apps, what is the general opinion of user experience like in the USA?
Hello Gewillia, you may well be right about Entain’s prospect, but I didn’t buy into Entain today though.
Realistically, I see the only bidder for Entain is MGM because of the contractual agreements in their US joint venture which is the jewel in the crown.
It appears to me MGM’s original bid for Entain early this year was an attempt to replicate how Caesars bought William Hill on the cheap - take full control of BetMGM and its technology stack, and sell the non-US online business which is slowing down materially.
MGM didn’t reckon that Entain’s management called their low offer bluff, unlike the William Hill management who simply rolled over at Caesar’s opening bid.
I’m staying with Flutter for now, even though there is unlikely to be any realistic bidder in the near horizon. However, I believe the catalyst to propel its share price higher will come from the listing of FanDuel, which have about half of the sports book market in the US. The potential IPO has been publicly intimated on several occasions by the management.
Notice of Q3 2021 Trading Update
Wed, 20th Oct 2021 12:00
RNS Number : 6664P
Flutter Entertainment PLC
20 October 2021
20 October 2021
Flutter Entertainment plc (the "Company")Notice of Q3 2021 Trading Update
The Company will release its Q3 2021 Trading Update for the three-month period ended 30 September 2021 on Tuesday 2nd November 2021 at 7.00am (GMT). The Company will host a conference call for institutional investors and analysts on the same date at 9.00am (GMT).
Hello Gewillia, you no doubt have seen the report below from CNBC just a few hours ago.
Draftking needs to constanly making acqusitons via new stocks and debts to make their precarious business model exciting.
The Caesars model of combining huge casino assets all over USA, but not in Macau, with the William Hill sportsbook business is in a much better position than others at present.
The convention business will be the jewel in the crown, and punters will pour in drove in staycations, just as soon as they all have their booster shots for covid-19.
I sold my holding in Draftking a while back to put them all in Caesars and Flutter, but unfortunately missed out on Entain.
https://www.cnbc.com/2021/09/21/draftkings-makes-20-billion-offer-for-uk-sports-betting-company-entain-sources-say.html
DraftKings is making a $20 billion offer to acquire U.K. online sports betting company Entain, people familiar with the matter told CNBC’s David Faber on Tuesday.
The offer is largely in DraftKings stock, along with cash, according to the sources.
The U.K. gaming company rejected an all-stock offer from MGM Resorts earlier this year worth $11 billion at the time. Entain said the deal significantly undervalued the company.
MGM and Entain maintain an online sports betting partnership in the U.S. called BetMGM.
Entain has not returned CNBC’s request for comment.