While some see the operator’s failure to secure a sports betting licence in New York as a reason to run a mile, Seeking Alpha’s iGaming specialist writer Howard Jay Klein reckons the state’s 51% tax rate means staying away could be a bullet dodged for Penn.
Klein said that while the stock may have been overvalued at its March peak of $130.27, its 52-week low of $50.74 represents a great opportunity for investors to buy the dip.
Despite Penn’s Q3 earnings miss, Klein said the business is heading into a “strategically bullish scenario” going forward, with its share price likely to stabilise between $88 and $90 in Q2 2022.
DraftKings’ darkness before the dawn
DraftKings has entered a “perilous phase” according to the Boston Globe, the oldest and largest daily newspaper in the operator’s hometown.
DraftKings CEO Jason Robins has faced a run of bad luck this year, according to the article, with the operator’s share price tumbling to well under half of its 52-week high of $74.38.
While Robins might have trillion-dollar market cap dreams for the business, the Globe said its trajectory had been “largely downhill” since early 2021, leading to its most challenging period round about now.
DraftKings’ stock has rebounded nicely since the article was published on 5 December however, from a weekly close of $28.37 on 3 December to $30.88 at the time of writing, via an 8 December high of $33.38.
Racing Post sale under the Spotlight
Sky News broke the story this week that Exponent Private Equity has appointed PJT Partners to handle an auction of Spotlight Sports Group, owner of the Racing Post, Pickswise, MyRacing and Free Super Tips.
The sale is reportedly expected to be worth some £500m, and is scheduled to kick off next year among increasing interest from US-based bidders.
The business apparently has its eye on international expansion, after a declining readership in its print offerings was exacerbated by the Covid-19 pandemic, with revenue down by some 20% according to Sky.
Spotlight continues to invest heavily in its digital assets, though, as it continues upon its journey from horseracing bettors’ favourite rag to online-driven B2B powerhouse.
According to the report, it remains unclear whether Exponent might also consider an initial public offering (IPO) of the business.Suits you, Cirsa!
Speaking of public offerings, Spanish operator Cirsa, which runs 148 casinos, 3,000 betting shops, and boasts a number of other assets across Spain and Latam, was reported to be preparing an IPO worth €3bn by Spanish news outlet El País.
Blackstone, the private equity giant which acquired Cirsa in 2018, is said to have contracted investment bank Lazard to advise on the deal, with hopes to carry out the offering around April 2022.
Since Blackstone acquired the business, it has struggled through significant downturns as the pandemic wrought havoc on its land-based venues’ income. However, as the operator was able to return to full swing in 2021, operating revenue for Q3 came in at more than €400m, more than 35% ahead of the prior year period.
EBITDA guidance for full year 2021 was between €322m and €330m at the time of the operator’s Q3 interim report release.
Mike DeWine raises a glass to Ohio sports betting bill
Legal Sports Report kept us abreast of some legislative changes in US sports betting this week, namely with the passage of House Bill 29 through Ohio’s State Senate, allowing for the introduction of regulated mobile sports betting in the state.
The 225-page bill underwent several amendments before being passed, and now stipulates that sports leagues, teams, casinos and racinos that earn a licence will be allowed to launch one skin each, before having the opportunity to apply to launch a second.
However, they must prove it will bring an incremental economic benefit to the state before doing so.
Similarly, the bill allows for the licensing of more than 25 mobile sportsbooks, as long as those applying can demonstrate that the state needs them to be present there. Any licensees approved after the first 25 will only be permitted to operate one skin each, which may provide some incentive for operators to get in the queue for a licence sooner rather than later.
According to the report, sports betting in Ohio must start by 1 January, 2023, but may start earlier on a date set by the regulator. Provisional gaming licences can be awarded until 30 June, 2023.
And finally, nags are out, video gaming is in, as a provision allowing sportsbooks to offer betting on horseracing was removed, while betting on professional esports was included.
The bill has now been passed to Governor Mike DeWine for its final sign off – at which point sportsbook-deprived punters in the Buckeye State will almost certainly crack open a bottle.