Caesars ponders online spinoff
Debt driving sales, Super Group record year, Paris clubs reopening, Kambi &Co
Good morning, on Gaming&Co today:
Caesars considers digital sale to reduce debt, record year for Super Group
Paris gaming clubs set to reopen after unprecedented closures
New word: novation of OLG-FDJ contract to Kambi due in H2
EGBA says social media adverts need ‘more work’
News shorts: Tipsport-Kero, Kambi-Betcity, Acroud
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Caesars considers spinoff of digital business
Debt reduction driving company focus on asset sales
Table talk: Caesars Entertainment is considering a spinoff of its digital business into its own publicly traded entity as it looks to unlock shareholder value and reduce leverage levels. “We recognize that a digital business trading at a blended brick-and-mortar multiple of 7-8x (means) there's dollars left on the table,” CEO Tom Reeg told investors yesterday.
Drive time: “It's a natural time to start to think about doing something strategically that allows investors a path to investing in that business on a pure-play basis. If it can continue to grow as it has, you should expect that we would look at any and all avenues in terms of how we can drive the most value to our shareholders,” he added.
The digital business’s adj. EBITDA leapt 208% from $38m in 2023 to $117m last year, while net revenue for Caesars Digital broke the billion-dollar barrier with a 20% rise to $1.1bn.
More sales in the offing: The sharp contrast with the rest of the business, which slumped almost 5%, was stark. Total revenue for the year dropped 2.4% to $11.2bn, while adj. EBITDA dropped 5% to $3.7bn. With debt reduction still on the agenda, Reeg said the company would consider the sale of other assets.
The company offloaded its most obvious non-core assets in 2023 with the sale of WSOP and LINQ Promenade used to repay $500m in debt and repurchase additional stock.
Tough quarter: Q4 revenue for the entire business dropped slightly to $2.8bn, while adj. EBITDA slumped 4.5% to $882m. Meanwhile, Q4 revenue for Caesars Digital was flat at $302m and adj. EBITDA slumped 31% to $20m due to Q4 sporting results driving low margins.
Jefferies said iGaming was enjoying a strong start to 2025, while Deutsche Bank noted that digital hold of 6% vs. expected 8% resulted in $40m of lost EBITDA in the period. The team at Stifel said it was “still optimistic about Caesars monetising their digital platform, but it will take time”.
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Record year for Super Group
Revenue up 18% for 2024, equals bumper dividends
New highs: Super Group, the parent company of Betway and Spin, has reported record revenue of €1.7bn for 2024, a YOY increase of 18%. Unveiling full-year and Q4 results, the company said it achieved its highest ex-US revenue of €487m in the final quarter, with an adj. EBITDA of €129m, reflecting a 26% margin.
Double take: Sports betting revenue more than doubled YoY in Q4 to €111m, driven by strong growth of Betway across Africa and improved results in the UK and Spain. Online casino revenues were up 29% to €373m thanks to strong performance from Spin brands in African markets, Canada and New Zealand.
The robust results have allowed Super Group to declare a €125m dividend for investors. Looking ahead, the company anticipates further double-digit growth in 2025, projecting ex-US revenue to exceed €1.83bn and adj. EBITDA to surpass €435m.
Last year saw the exit of Betway from the US market. Speaking on the earnings call, Super Group CEO Neal Menashe emphasised the company's strategic focus. "We are super-focused on the markets we are in,” he told analysts.
Paris gaming clubs set for reopening
Unprecedented two-month shutdown was costly and traumatic for the industry
Bruising and upsetting: Paris’s seven gaming clubs are set to reopen their doors potentially by the end of the week following their enforced shutdowns on 31 December because of France’s lack of a viable budget. The two-month episode, although short-lived, was unprecedented and has left scars on the stakeholders caught up in it.
The government subsidised 60% of the salaries of approximately 1,500 staff employed by different establishments and the majority of the groups made up the remaining 40% of their employees’ wages.
€1m a week: French treasury officials told Les Echos that it lost around €1m in weekly tax income, with total losses coming to more than €8m over the past two months. The clubs, situated in some of the most expensive neighbourhoods of Paris, had to continue paying fixed operating costs - Belgian casino group Circus said it had lost €750k over the period.
Kambi to take over FDJ’s Ontario Lottery & Gaming Corp contract
Novation, aka contract transfer, will see OLG’s PROLINE brand migrate to Kambi
Major transfer: Kambi is set to take over the running of the Ontario Lottery and Gaming Corporation’s sports betting offering PROLINE from Francaise des Jeux as part of a novation agreement between the two companies that should see OLG migrate to Kambi during the second half of the year.
Kambi said the deal requires OLG’s consent and the fulfilment of “certain conditions”. FDJ said the move had long been planned and was “in line with the strategic refocus of its international activities on B2C operations”.
B2C focus: The acquisition of Kindred Group falls into that strategic thinking and FDJ’s recent sale of Sporting Solutions to Betsson for an undisclosed amount was another component of its B2C focus.
Kambi said it had been identified as FDJ’s “preferred assignee” and subject to conditions will run the contract with OLG until 2032. The Swedish group said it has to make a one-off “material initial investment” as part of the agreement but it will not be part of its FY25 opex guidance.
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'More work to be done' in social media ad compliance
Strong compliance on traditional channels but social media ads a work in progress, says EGBA
Must do better: The European Gaming and Betting Association (EGBA) has published its latest monitoring report on responsible gambling advertising, revealing strong compliance among its members on traditional advertising channels but highlighting areas for improvement in social media.
Up to code: The report, based on a study of 120 individual advertisements across multiple platforms in the UK, Greece, Spain and Romania, assesses adherence to EGBA’s pan-European code of conduct.
Launched in 2020, the code includes safeguards such as age restrictions, “18+” messaging and responsible influencer marketing.
Age-gating: While operators have effectively implemented measures on TV and other traditional platforms, the report warns that social media advertising requires further progress, particularly in strengthening age-gating tools and being more transparent on paid marketing activity.
News shorts
Czech Republic and Slovakia-focused digital sportsbook Tipsport has signed a partnership to deliver Kero Gaming’s micro-betting markets portfolio Quick Bets to its players. The Kero recommendation engine delivers “personalised and contextually relevant betting markets” to players.
Quick fire: Kero CEO Tomash Devenishek said the partnership marks “a new chapter for Kero as we continue to expand our presence across Europe. Tipsport’s reputation for excellence and commitment to customer satisfaction make them the perfect partner to introduce the cutting-edge ‘Quick Bets’ category that will elevate the in-play betting experience for their users.”
Kambi has renewed its sportsbook partnership with Entain’s Dutch brand BetCity on a multi-year basis. BetCity has been active in the Netherlands since market regulation in Oct2021. The group was acquired by Entain in 2022 for €300m.
Acroud has issued 1 billion new shares to raise cash, converted $6.5m in debt into shares and raised approximately US$6.1m in super senior bonds to complete the acquisition of the remaining 49% of Acroud Media from RAIE Media for US$12.5m. Acroud said the latest moves will give it more financial flexibility to carry out its strategic roadmap.
Calendar
Results: Feb 27: PENN Entertainment | March 6: Banijay-Betclic, FDJ, Entain
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