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Just over three years after acquiring the Vegas Sports Information Network (VSiN) from Musburger Media, DraftKings (NASDAQ: DKNG) is selling the sports betting radio network back to the original owner.

Financial terms of the transaction weren’t disclosed. DraftKings paid $70 million to purchase VSiN in March 2021. VSiN founders Brian Musburger and Bill Adee will take the reins of sports wagering media property moving forward.

VSiN will continue to deliver the news, analysis, and insights that bettors need to inform their betting decisions, with 18+ hours of unique sports betting content each day,” according to a statement issued by the buyer.

VSiN is based in Las Vegas and broadcasts from the sportsbook at the Circa Resort and Casino in downtown Las Vegas.

Announcement Arrived Soon After VSiN Sale Rumor Appeared

The official announcement of the VSiN founders buying the media entity from DraftKings arrived less than three weeks after rumors to that effect surfaced.

That could merely speculation for the simple reason that neither the buyer nor the seller are publicly commenting on the sale price.

“DraftKings continues to optimize its investments in content and media to align with the most critical areas and needs of our business strategy, objectives, and goals,” said Stephanie Sherman, chief marketing officer at DraftKings, in the statement. “We want to thank Brian, Bill, and the entire team at VSiN for a great relationship, and we look forward to continuing to advertise on the network.”

How VSiN Could Look Post-DraftKings

It’s not yet clear if there will be immediate changes at VSiN following the separation from DraftKings, but the radio network could potentially more swiftly capitalize on growth opportunities as a freestanding company with the founders regaining operational control and editorial autonomy.

“In addition to its 24/7 stream, VSiN’s original content is accessible through multiple video and audio channels including YouTube TV, Rogers’ Sportsnet, NESN, AT&T Pittsburgh, Marquee Sports Network, a dedicated channel on iHeartRadio and TuneIn, as well as more than 300 terrestrial radio stations throughout the country, and its growing slate of podcasts,” according to the statement.

In the early days of the US sports wagering boom, deals between gaming and media companies were common with thesis being that media outlets could serve as effective customer acquisition tools for operators.

On the other hand, some large-scale media acquisitions by gaming companies have been panned by analysts and investors, indicating that the primary issue is the ability of the buyer to wring profits out of an acquired media company. DraftKings’ play for VSiN wasn’t met with such derision, but it’s possible the decision to sell the radio network could result in cost savings. DraftKings delivers second-quarter results on Aug. 1 and it’s possible the gaming company could elaborate on the decision to sell VSiN on its Aug. 2 conference call.

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Cherokee Nation Entertainment, the casino gaming arm of the Native American tribe of the same name, doesn’t operate a Las Vegas venue, but it’s not opposed to the idea over the long-term.

In remarks made earlier Saturday at the National Council of Legislators from Gaming States (NCLGS) in Pittsburgh, Cherokee Nation Gaming Commission Chairman John Sparks said the Tribe isn’t looking to enter Las Vegas “just yet.” However, Sparks did not say the Tribe is permanently opposed to eventually coming to the US casino center.

Currently, Cherokee Nation runs eight casinos in Oklahoma and is widely viewed as the frontrunner to land a gaming license in Pope County, Ark. Just over two years ago, the Tribe paid MGM Resorts International $450 million for the Gold Strike Hotel & Casino in Tunica, Miss.

Cherokee Nation Would Need Likely Acquisition to Get Las Vegas Casino

Cherokee Nation Entertainment is one of the largest Tribal gaming entities in the US and thus likely has the financial resources to eventually make a move into Las Vegas, which almost certainly need to be accomplished via acquisition.

Additionally, some analysts believe that high interest rates are a headwind to casino mergers and acquisitions activity because many prospective buyers don’t want to finance deals at elevated borrowing costs. It’s possible that the Federal Reserve will lower borrowing costs in September, but it could take more than a single cut to galvanize gaming industry deal-making.

Over the past several years, the bulk of the scuttlebutt regarding Strip casino hotels that could change hands has centered around mid- and lower tier properties. It’s not clear if such venues would be to Cherkoee’s liking or if the Tribe would prefer something glitzier.

Assessing Las Vegas Tribal Landscape

With Mohegan Gaming & Entertainment out as the casino operator at the off-Strip Virgin Hotels Las Vegas and with the closure of the Mirage, the lone Sin City gaming venue run by a Native American tribe is the off-Strip Palms, which is owned and operated by the San Manuel Band of Mission Indians of California.

Assuming no acquisitions or new from the ground up developments, the Las Vegas Tribal roster will increase to two in 2027 when Hard Rock International reopens Mirage bearing the operator’s famous brand.

At the NCLGS conference, Cherokee’s Sparks did not reveal a timeline for the Tribe entering the Las Vegas market.

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Las Vega Strip trends remain sturdy and that’s good news for MGM Resorts International (NYSE: MGM) and Caesars Entertainment (NASDAQ: CZR). Looking elsewhere in the gaming industry, a near-term takeover of Penn Entertainment (NASDAQ: PENN) appears unlikely.

Those are the takes of Truist Securities analyst Barry Jonas. MGM and Caesars are the two largest Strip operators and while the US casino center is displaying signs of resilience, but the stocks have not displayed much in common of late. Over the past month, shares of MGM are higher by 12.16% while Caesars is up just 1.22%. Year-to-date, the Bellagio operator is sporting a small gain while Caesars is lower by 22%.

Some of the lag in Caesars stock, which analysts are acutely aware of, is the result of state-level performances that trail rival MGM, according to Jonas.

We believe this is largely a function of management’s playbook of efficiently managing promos/margins, as opposed to anything structural/permanent,” observed the analyst.

Jonas added some market participants have thrown in the towel on Caesars stock, but that gloomy outlook ignores the potential for management to materially reduce debt — an effort that could be assisted by asset sales — and growth outlets in the form of new regional casinos in Nebraska and Virginia as well as the refurbishment of the operator’s New Orleans integrated resort.

Boyd Probably Not Moving on Penn Over Near-Term

In his report, Jonas also discussed several regional casino operators, including those with heavy Las Vegas locals exposure. Boyd Gaming (NYSE: BYD) was part of that conversation.

“We think the complexity of a transaction (likely involving multiple parties, requiring multiple divestitures as well as consent from landlord Gaming & Leisure Properties, while PENN is on the verge of releasing new ESPN Bet features … that should meaningfully improve their product, points to any deal as less likely,” wrote the analyst.

ESPN Bet is seen as a likely sticking point for Boyd because the operator would not want to pay up for Penn’s interactive business. That’s stoked speculation about a third party, potentially FanDuel parent Flutter Entertainment (NYSE: FLUT), getting involved, but with ESPN Bet currently commanding scant share in the US sports betting market, it’s allure to suitors could be diminished.

Bally’s Could Accept Takeover Offer

Speaking of casino consolidation chatter, Jonas said that with Bally’s (NYSE: BALY) having procured needed financing for its Chicago integrated resort, the company could be more likely to accept the takeover offer floated by Standard General earlier this year.

The hedge fund controlled by Bally’s Chairman Soo Kim offered $15 a share for the gaming company earlier this year — far below the suitor’s $38 per share acquisition overture made in March 2022. Standard General is the largest Bally’s shareholder.

Jonas speculated that with Chicago financing taken care of, Bally’s is less likely to reject the acquisition offer and could accept it while deploying “a number of value enhancing measures.”

The post MGM, Caesars Supported by Strip Resilience, Penn Takeover a Stretch, Says Analyst appeared first on Casino.org.

Accel Entertainment (NYSE: ACEL) announced the acquisition of Fairmont Holdings for $35 million in equity, adding a horse racetrack to the video gaming terminal (VGT) firm’s portfolio of assets.

Privately held Fairmont owns FanDuel Sportsbook & Horse Racing in Collinsville, Ill. The venue has 65 live race days and 435 horse races per year. The track is nearly a century old and was rebranded as FanDuel Sportsbook & Horse Racing in 2020. Accel is one of the largest distributed gaming operators in the US. Last year, Fairmont posted $29 million in sales and “modest earnings before interest, taxes, depreciation, and amortization (EBITDA).”

Accel plans to invest $85 – $95 million (over and above the purchase price) to fund temporary and then permanent casino construction and modest track investments. Accel’s five-year forecast suggests an Adjusted EBITDA potential of $20 to $25 million and over 75% free cash flow conversion — pointing to a compelling cash flow return on capital,” according to a statement issued by the two companies.

Accel is a provider of video gaming terminals (VGTs) in Illinois and several other states. Accel’s VGTs are found in businesses such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores.

Fairmont Deal Fits Accel Acquisition Profile

The Fairmont transaction jibes with Accel’s track record of bolt-on acquisitions that expand the buyer’s route-based capabilities. With Fairmont, the suitor accomplishes while spreading its wings into another corner of the broader gaming industry.

“The transaction has two parts — acquisition of Fairmount, the holder of the license and owner of the underlying site assets, for approximately $35 million of equity consideration, and $85 – $95 million of expected casino build-out and track investments funded from Accel’s credit facility,” according to the statement.

Accel is forecasting “attractive return on capital” via the transaction, which is scheduled to close in the fourth quarter.

Deal Could Provide Runway for Future Growth

In aggregate, Illinois is one of the largest gaming markets in the country, but in Southern Illinois/St. Louis area, there is fragmentation and many of the operators are smaller independents, indicating there’s some room for consolidation. That could be to Accel’s benefit.

“This transaction accesses a ‘local gaming’ total addressable market (TAM) estimated to be approximately $15 billion in size — or more than twice our existing route-based TAM,” according to the company. “Local gaming assets remain largely unconsolidated, under family or small business ownership, and far less often contested by larger gaming players.”

Accel did not mention if the casino would bear the FanDuel — one of the most valuable in the gaming industry — but is attached to another casino in Illinois.

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Mazaii, a Canadian provider of iGaming games and solutions, will be acquired by blank-check firm Relativity Acquisition Corp. (NASDAQ: RACY) in a deal valuing the target at an initial enterprise value of $500 million.

The deal signals there’s still a strong appetite for iGaming assets and technology despite the fact that no new states have approved that form of wagering this year. Six states allow it. Relativity Acquisition is a Las Vegas-based special purpose acquisition company (SPAC) that was originally formed with the intention of affecting a deal in the cannabis space, but the blank-check firm told investors it would be flexible about exactly where it would find an acquisition partner. The combination with Mazaii could prove prescient.

The company supplies its advanced gaming content and technology to prominent brands within the sector, enhancing their platforms and player experiences. Through strategic acquisitions, Mazaii Corp expands its market reach and strengthens its product offerings across key regions, including Europe, North America, Latin America, and Asia,” according to a statement.

The transaction is expected to be completed in the second half of this year.

Mazaii Could Find Enthusiastic Investor Audience

Mazaii could be at the right place at the right time in terms of broadening its investor base and accessing public markets because there’s been no shortage of coverage pertaining to the long-term internet casino opportunity set.

Buttoning down superior technology is essential to operators’ efforts to fully capitalize on the internet casino opportunity set. Analysts and operators are enthusiastic about the outlook for internet casinos because there’s a long runway for state-level legalization. It’s also a higher margin business than sports betting, and bettors are often stickier and spend more money than they do on sports wagering.

Montreal-based Mazzaii and Relativity Acquisition expect to provide more details on the combination in the months ahead.

SPAC Resurgence? Maybe. Maybe Not.

Several years ago, the gaming industry was fertile territory for SPAC deals, but that well dried up as the broader market soured on companies that came public via mergers with blank-check firms. Most of the stocks, gaming and otherwise, performed poorly upon becoming standalone publicly traded firms.

Following a slew of gaming SPAC transactions in 2021, many of the blank-check firms that were looking for merger partners in the industry threw in the towel as interest rates surged and stocks fell into a bear market in 2022. SPACs generally have two years to execute business combinations, including mergers, and if that doesn’t happen, the firms can seek extensions or liquidate and return capital to investors.

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The long rumored sale of Rush Street Interactive (NYSE: RSI) could materialize in two months or less, according to a recent report.

Citing unidentified sources, the Off Shore Gaming Association (OSGA) noted that a deal for the BetRivers owner could be reached as soon as September, but specific suitors were not mentioned. Media reports surfaced in March that the Illinois-based gaming company reached out to multiple rivals about a possible acquisition. DraftKings (NASDAQ: DKNG) was the only member of that group identified by name.

While the US sports betting space is now a de facto duopoly controlled by FanDuel and DraftKings, Rush Street Interactive could be one of the more compelling takeover targets in the space for suitors looking to bolster market share. In the first quarter, not only was the sporsbook operator positive on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA), but its revenue surged 34% while its net loss plunged to $2.2 million from $24.5 million a year earlier.

Why Rush Street Interactive Could Be Target

The list of possible prospective buyers, excluding or including DraftKings, could be extensive because the rumored target offers an attractive foothold in the iGaming industry.

However, some analysts have expressed doubt that RSI is a takeover target although in May 2023 CEO Richard Schwartz told analysts and investors he’d be open to having mergers and acquisitions discussions.

It is clear that the price tag has likely increased. Shares of RSI are up 98% year-to-date and the company’s market capitalization was $2 billion as of the close of US markets on July 12, indicating a buyer would likely have to offer more than that to get RSI to the bargaining table.

Assessing Potential RSI Suitors Beyond DraftKings

DraftKings making a run at RSI would be sensible because the former has proven acquisitive and has its eyes set on iGaming expansion. However, DraftKings hasn’t confirmed it’s interested in RSI and some analysts believe DraftKings will eschew acquisitions over the near-term.

The OSGA report mentioned “smaller companies who would love to increase their presence” as potential buyers of RSI, but no operators were mentioned by name. The report also suggested that European betting behemoth bet365 could be interested, but that company has not confirmed any discussions with Rush Street Interactive.

HG Vora – a hedge fund with a reputation for pushing for change at gaming companies – is RSI’s largest investor, controlling 8.79% of the shares. Institutional investors own 28.81% of the shares while insiders control 8.08%, according to GuruFocus data.

RSI operates under the BetRivers and PlaySugarHouse brands, and is currently available with mobile or retail businesses in Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia. The firm also offers sports wagering in Ontario, Canada.

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Shares of Bally’s (NYSE: BALY) surged Friday after the gaming company announced it will strike deals with Gaming and Leisure Properties (NASDAQ: GLPI) for an aggregate of $2.07 billion in financing. That closes an $800 million shortfall the operator faced on its Chicago casino hotel project.

An affiliate of Gaming and Leisure — one of the largest owners of gaming real estate — is acquiring the property assets associated with Bally’s Chicago venture and will “fund construction hard costs of up to $940 million at an 8.5% initial cash yield.” That funding will be delivered from August 2024 through December 2026.

In addition to the development funding of hard costs, GLPI also intends to acquire the Chicago land for approximately $250 million before development begins. Upon GLPI’s purchase of the Chicago land, rent will commence under a new lease carrying a 15-year initial term with an initial cash yield of 8%,” according to a statement issued by the real estate investment trust (REIT).

The announcement arrived at a critical time for Bally’s in Chicago. In March, executives from the Rhode Island-based regional casino operator told the Nevada Gaming Control Board (NGCB) the company was facing an $800 million funding gap in Chicago, stoking concerns that the much-ballyhooed debut of a casino resort in the city may not come to life.

The lease agreement on the Chicago property has been amended to reflect annual rent of $20 million at a cap rate of 8.5%. Shares of Bally’s are higher by 4.71% at this writing.

More Details on Bally’s Chicago Casino

By procuring the needed financing and, assuming various local regulatory approvals are granted over the near term, it’s possible that Bally’s could soon commence demolition of the Freedom Center, potentially positioning the operator to meet the expected September 2026 debut of the Chicago gaming venue.

The gaming company also implied it intends to move forward with an initial public offering (IPO) tied to the Chicago plan that is designed to allow local investors, including business owners and minority groups, to own up to 25% of the venture.

Other Moving Parts in Bally’s/GLPI Agreement

Before Friday, Bally’s and GLPI had an existing relationship that was poised to grow, and not just because of the Chicago pact. As part of the broader agreement, the REIT is acquiring the real estate of Bally’s Kansas City and Bally’s Shreveport for a total of $395 million. The combined annual rent on those properties will be $32.2 million, “representing an 8.2% initial cash capitalization rate.”

“As a part of the amendment, GLPI will be granted a right to call the Lincoln Transaction beginning in October 2026, coinciding with the scheduled maturity of Bally’s revolving credit facility. All such transactions are subject to required regulatory approvals,” according to the press release issued by the gaming company.

GLPI already owns the property associated with Bally’s Tiverton Casino & Hotel. The REIT’s existing New England footprint consists of the Tiverton venue, the  Hollywood  Casino Hotel in Bangor, Maine, and Plainridge Park Casino in Plainville, Mass., both of which are operated by Penn Entertainment (NASDAQ: PENN).

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The 13 Hotel in Macau has reopened in a limited capacity after the resort’s parent company failed to find a buyer for the $1.6 billion financial catastrophe.

TDM Radio Macau broke the news that The 13 recently reopened a portion of its 199-room boutique hotel, though how many rooms are online wasn’t immediately known.

The local public broadcaster said the resort’s parent company, South Shore Holdings Limited, is embarking on an extensive renovation of the property that includes room makeovers.

The Macau Government Tourism Office (MGTO), which regulates casino hotel operations and monitors room inventory across the enclave, confirmed that The 13 Hotel had reopened for the first time since it shuttered during the COVID-19 pandemic in February 2020.

The 13 Saga 

The 13 is the failed ultra-luxury casino resort envisioned by Hong Kong billionaire Stephen Hung. The flamboyant playboy businessman came up with the idea for a grand, VIP-only boutique casino resort in 2013 at the height of the Macau casino industry when the six gaming licensees combined to win $45 billion from players.

Beijing’s orders for Macau to more closely monitor the flow of cash from the mainland through its Special Administrative Region (SAR) border gates resulted in annual gross gaming revenue declining in each of the next three years. Despite more competition for high rollers with further expansion of the luxurious Cotai Strip where VIPs stay, Hung and his South Shore Holdings pressed on to build the 22-story resort that features a red façade and faux giant diamond.

High rollers never came.

Soon after opening in September 2018 as a nongaming hotel after Hung failed to attract one of the six casino operators to partner for a casino operation, The 13 reported dismal bookings. The resort averaged just an 8% occupancy rate during its first 12 months in business.

Funding Sources

TDM Radio Macau relayed that The 13 staff said the resort’s available rooms are “fully booked” through late September. Rooms can only be booked by calling the resort directly.  

In March, South Shore Holdings announced it was shopping The 13. Commercial real estate firm Jones Lang LaSalle auctioned the property on South Shore’s behalf with an assessed value of HK$2.4 billion (US$310 million). The auction, however, didn’t result in a sale.

It’s unclear how South Shore is funding The 13’s resort renovation. The hotel has an active occupancy license from the MGTO that runs through the end of the year.

The post Macau’s 13 Hotel Quietly Reopens After Sale Flounders appeared first on Casino.org.

Shares of VICI Properties (NYSE: VICI), and Gaming and Leisure Properties (NASDAQ: GLPI), the two largest casino landlords, are off an average of 11.27% year to date while the S&P 500 is higher by 16.69%. But, some analysts believe gaming real estate investment trusts (REITs) could soon deliver better performances.

In a recent note to clients, Truist Securities analyst Barry Jonas cited the familiar headwind of elevated interest rates as one of the primary drags on VICI’s and GLPI’s price action through the first half of 2024. Due to its capital-intensive nature, real estate is one of the sectors most negatively correlated to interest rates, and with the Federal Reserve yet to lower borrowing costs, REITs of all stripes have been pinched.

Year to date, 10-year Treasury yields are higher by 11.17%, weighing on the real estate sector in the process, but those yields slightly declined over the past 90 days. That could be a sign of the rate stability Jonas mentioned as a possible catalyst for the casino REITs.

(VICI is) well positioned for the next wave of large scale, non-gaming, and/or international transactions,” wrote Jonas.

The analyst is also constructive on Gaming and Leisure, which is smaller than its rival and needs “less to move the needle,” he observed.

High Rates Not Slowing Casino REIT Activity

While the highest interest rates in two decades are weighing on shares of casino REITs, the companies aren’t sitting idly by. Rather, both GLPI and VICI are executing transactions that could be accretive to long-term investors.

Jonas said that transaction and other bolt-on buys by GLPI are “indicative of smaller deals that are still getting done despite the lack of rate cuts so far this year” while that REIT and rival VICI are “demonstrating execution ability despite the lingering interest-rate uncertainty.”

For its part, VICI has been lauded by Wall Street for its involvement in financing $1 billion in upgrades at the Venetian and Palazzo on the Las Vegas Strip. As part of the financing accord, VICI will increase Apollo’s lease obligations at Venetian. Under the existing rental agreement, rent will rise “on the first day of the quarter immediately following each capital funding at a 7.25% yield.”

Eye on Potential Penn Sale

Amid frequent, though unconfirmed, scuttlebutt that Penn Entertainment (NASDAQ: PENN) is a takeover target, both casino REITs could be worth monitoring, but such a deal would be impactful for GLPI because the regional casino operator is the landlord’s biggest tenant.

Jonas, who isn’t convinced Boyd Gaming (NYSE: BYD) will make a play for Penn, observed GLPI will have a say in any such transaction should it materialize.

“GLPI’s master lease with PENN has change-of-control provisions that set various conditions for an acquirer and could require GLPI’s approval for any divestitures/lease modifications,” concluded the analyst.

The post Casino REIT Stocks Could Improve as Interest Rates Stabilize appeared first on Casino.org.

In a move aimed at bolstering its sportsbook technology, Caesars Entertainment (NASDAQ: CZR) said today it is acquiring ZeroFlucs Group Pty Ltd.

The Australian company is a software provider whose products allow sportsbook operators to efficiently update odds and pricing while maintaining existing data relationships. Financial terms of the transaction were not disclosed.

The ZeroFlucs acquisition follows a successful integration of ZeroFlucs’ technology into the Caesars Sportsbook platform through a commercial arrangement that enabled the recent launch of new products, such as in-play same-game parlays (SGPs) and a vastly improved menu of ‘SGP-eligible’ markets for Major League Baseball,” according to a statement.

Caesars did not say when the transaction will close, but the buyer noted Steve Gray and Carly Christensen will remain at the helm of ZeroFlucs with Christensen joining Caesars Digital as senior vice president of price technology.

Sports Betting Tech Race Heating Up

The Caesars deal for ZeroFlucs is the latest sign of an intensifying race for sports wagering technology.

The transaction was announced less than two weeks after MGM Resorts International (NYSE: MGM) said its LeoVegas unit would purchase the US iGaming and sportsbook operations of Tipico Group for an undisclosed sum — a move market observers believe is largely rooted in technology.

Regarding ZeroFlucs, “the acquisition cements a relationship between the companies that has already improved the customer experience and will continue to unlock exciting new product features and benefits for Caesars Sportsbook bettor,” added Caesars in the press release.

How ZeroFlucs Can Help Caesars

As technology further penetrates the world of sports wagering, speed is essential in boosting the menu of live wagers a sportsbook operator can offer bettors.

In nearly all major team sports, in-game odds can shift on a play-by-play basis — a touchdown, a home run, etc. Sluggish technology can force operators to only refresh odds during breaks in the action, but wise bettors know they might not be getting the best odds.

Specific to ZeroFlucs and Caesars, the acquired company’s competencies in baseball SGPs could be enticing because due to the slow-moving nature of that sport, it’s conducive to SGPs and live wagering. That fact isn’t lost on gaming companies and with better technology, it’s possible operators will lure more bets on baseball — a sport that trails football and basketball by handle by wide margins.

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