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DraftKings Q1 Earnings Could Benefit from Super Bowl Parlays, Prop Bets, Says Analyst

While most sportsbook operators were pinched by the Super Bowl because the underdog Kansas City Chiefs won outright, DraftKings’ (NASDAQ: DKNG) first-quarter earnings might prove sturdy due to the operator winning on parlays and some popular proposition wagers.

DraftKings stock
A DraftKings billboard appears at Times Square in New York City. An analyst believes the operator did well with the Super Bowl and could have big iGaming opportunities ahead. (Image: NASDAQ)

Following a meeting with several high-ranking DraftKings executives, including co-founder and CEO Jason Robins, JPMorgan analyst Joseph Greff said he came away “incrementally impressed.” He added that the operator likely notched decent hold on the Super Bowl because neither Kanas Chiefs tight end Travis Kelce nor running back Isaiah Pacheco scored touchdowns in the big game, meaning plenty of DraftKings clients that built same-game parlays with those props lost.

Continuous product iteration and technology competencies are driving higher structural hold rates, benefiting from increased adoption of its higher-margin parlay products and other diversified bet types that are unlocking increased engagement and monetization of its customer base,” observed Greff.

The analyst added DraftKings’ overall Super Bowl hold was solid even with the Chiefs winning and the operator may have given a clue to that effect by raising 2024 guidance earlier this month.

DraftKings iGaming Future Bright

As has been widely documented, gaming companies, including DraftKings, are enthusiastic about the long-term outlook for internet casinos, but just six states currently permit that form of wagering.

Greff told clients that DraftKings is considering pitching iGaming in Illinois as an avenue for plugging gaps in the that state’s budget. That’s viewed as a potential compromise to Gov. J.B. Pritzker’s (D-IL) recently proposed budget, which pitches raising the state’s tax on sports betting to 35% from 15%.

The JPMorgan analyst added that the DraftKings executives cited bullish revenue trends in the states that allow internet casinos and that the outlook for expansion is bright because some states, including New York and some in New England, are grappling with budget constraints and need to find new sources of revenue.

The executives also discussed DraftKings’ recently unveiled $750 million cash/stock deal for online lottery provider Jackpocket, telling Greff the firm will initially function as a standalone entity and later be integrated into the buyer’s sports betting and iGaming platforms. The acquisition could help DraftKings expansion efforts, including into Texas where Jackpocket is already operational, according to the analyst.

Speaking of Expansion…

DraftKings management told Greff they remain open to additional acquisitions and with a soaring share price and with $1.27 billion in cash and cash equivalents on hand at the end of 2023, the operator has the resources with which to make deals.

The analyst noted that the gaming company is open to international purchases and while specific jurisdictions weren’t mentioned, it appears DraftKings is unlikely to go shopping in Western Europe due to limited growth opportunities in that region.

Greff pointed out that given the firm’s strong cash position, it could consider a share repurchase program, but a potential dividend wasn’t mentioned.

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Playtika Halts Strategic Review, Initiates Dividend

Shares of mobile games developer Playtika (NASDAQ: PLTK) slid Monday after the company reported fourth-quarter earnings per share (EPS) that missed Wall Street estimates, and as the firm said it’s halting a strategic review.

Playtika
Playtika is highlighted at the Nasdaq market site in January 2021. The company is pausing a strategic review and initiating a quarterly dividend. (Image: Nasdaq)

In the final three months of 2023, Playtika earned 10 cents per share on revenue of $637.9 million. Analysts expected earnings of 17 cents per share on sales of $628.98 million. Nearly two years to the day after the company announced a strategic review, which could have included a sale, Playtika paused that effort, citing “ongoing uncertainty in Israel and Ukraine.”

Playtika is based in Israel and has operations in Ukraine. Playtika was one of the first to offer free-to-play social games on social networks and mobile devices, and has over 35 million monthly users. Its well-known games include Bingo Blitz, Caesars Slots, Slotomania, and World Series of Poker (WSOP) Social.

With the strategic review on hold, the mobile games creator is taking a different approach, telling investors it will pursue mergers and acquisitions of its own.

Playtika Capital Deployment Plans

Playtika concluded 2023 with $1.02 billion in cash and cash equivalents compared to a current market capitalization of $2.52 billion, indicating the stock may be undervalued following a 28% decline over the past year. The company’s free cash flow jumped to $436.4 million from $383.7 million in 2022, paving the way for opportunistic mergers and acquisitions and shareholder rewards.

In the past year, we’ve honed our focus on efficiency and streamlined our operations, adapting to evolving industry dynamics in mobile gaming,” said CEO Robert Antokol in a statement. “Now, with a solid foundation, 2024 marks our shift towards reinvestment — pursuing M&A opportunities with a strategic intent of capital deployment.”

Playtika said it will commence a quarterly dividend of 10 cents a share on April 5 to shareholders of record as of the close of business on March 22. The firm added it could consider a share repurchase program in the future. Based on the price of the stock at this writing, dividend yield would be 2.74%.

President and COO Craig Abrahams added the company will spend $600 million to $1.2 billion on mergers and acquisitions over the next three years.

Playtika’s 2024 Outlook

The gaming company’s tepid 2024 guidance may have also been a contributing factor in the stock sliding on Monday. Playtika said it expects 2024 sales of $2.52 billion to $2.62 billion on earnings before interest, taxes, depreciation, and amortization (EBITDA) of $730 million to $770 million.

“Capital expenditures expected to be between $110 million to $115 million, which includes $17 million in accrued capital expenditures from Q4 FY2023 that will be paid in FY2024,” according to the firm.

In the fourth quarter, average daily paying users rose 2.3% on a quarter-over-quarter basis, but declined 2.2% year over year.

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Hacksaw Gaming Strengthens a Position in Italian Market Through a Deal with Cristaltec Entertainment

Hacksaw Gaming became globally famous for its thrilling slot releases with edgy themes and fantastic features, and it helped the company build a vast network of partners and join forces with the biggest operators in the industry.

Recently, the company joined forces with Cristaltec Entertainment S.r.l. and strengthened its position in the Italian market through the content distribution agreement with this powerful company.

Italian expansion as a part of the strategy

hacksaw_gaming_celebrates_deal_with_cristaltec_italy_The new deal is a part of Hacksaw Gaming’s plan to expand across the whole region, which will happen in the following few weeks.

The popularity of Hacksaw Gaming’s titles, already huge, will be even more increased thanks to the expansion to the new regulated markets, and Italian players will get a chance to enjoy a vast range of captivating titles.

Thanks to the partnership with Cristaltec, the company will be able to incorporate exceptional industry expertise and competency, which will help it establish a position in a new regulated market.

Some of the titles are already available on Cristaltec’s Casinomania online casino website. At the moment, the players can enjoy 38 exciting releases, including popular slots such as Wanted Dead or a Wild, R.I.P. City, Hand of Anubis, and Joker Bomb.

However, companies plan to release more games during the upcoming months and provide the Italian players with some of the best releases currently available in the market.

Both companies had in mind local gaming enthusiasts when creating the offering. With that in mind, the games that will join Cristaltec’s impressive offering and popular franchises are carefully selected to suit the needs of even the pickiest players in the Italian market.

Marcus Cordes, the CEO of Hacksaw Gaming, said: “We are strongly committed to enriching the Italian gaming market with the quality and variety of our portfolio. Working together with Cristaltec will certainly drive these opportunities to new heights.”

Calvi Lorenzo, a Member of the Board of Directors at Cristaltec Entertainment, added: “We are happy to announce the new agreement with Hacksaw, which will allow us to expand the offer of high-quality games present in the Casinomania Online Casino, belonging to the Cristaltec Group. Thanks to this partnership, our customers will have access to a wide and excellent selection, which highlights our constant commitment to exceeding expectations in the iGaming sector.”

Industry leaders

Hacksaw Gaming is one of the leading suppliers of slots, scratch cards, and instant win games to the global gaming market. Its portfolio currently consists of more than 120 thrilling titles, and the company is present in over 20 regulated markets all over the world. Over the years, Hacksaw Gaming has established a vast network of partners, which currently has more than 300 big industry names, including LeoVegas, Kindred, White Hat Gaming, BetConstruct, Betsson, and many more.

On the other hand, Cristaltec Entertainment also has an impressive portfolio of games, including hits such as Temple Queen, Epic Gods, Captain Morgan, Dante, and others. The company was founded in 2004, and since then it has become a leader in the region.

Source: Sarkany, Adrienn, “Hacksaw Gaming Celebrates Deal with Cristaltec Italy”. European Gaming. February 21, 2024.

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Atlantic City Boardwalk Allocated $20M for Repairs, Preservation

The Atlantic City Boardwalk will undergo a $20 million repair to preserve the iconic waterfront promenade that dates back to 1870.

Atlantic City Boardwalk repair New Jersey
The Atlantic City Boardwalk is seen in a 2019 file photograph. The Boardwalk is set to undergo a major repair made possible by a $20 million grant. (Image: Getty)

On Friday, New Jersey Gov. Phil Murphy (D) announced $100 million in funding for 18 municipalities to assist the local governments in addressing capital needs to restore their boardwalks. Atlantic City, the casino capital of the East Coast, received the most money with a $20 million grant.

So many of us have created memories with family and friends at the boardwalks of the Jersey shore. Our boardwalks have long been a prized destination and we want to keep them that way by helping shore communities repair and maintain these wooden main streets,” Murphy said. “The grant awards announced today are a meaningful step in preserving the health and dynamism of these special places.”

The $100 million comes from leftover money the state received through the American Rescue Plan — the federal funding measure crafted as an economic stimulus program.   

Boardwalk Restoration

Atlantic City’s Boardwalk is said to be the oldest in the nation. Originally designed to keep sand out of the beach’s neighboring hotels, “America’s Oldest Boardwalk” spans 5.5 miles and is about 60 feet wide making it among the world’s largest boardwalk structures.

The Boardwalk was about seven miles long until the 1944 Great Atlantic Hurricane. The devastating Category 5 storm destroyed the southern end of the Boardwalk where it previously stretched through Margate City. Today, the Boardwalk ends at Fredericksburg Ave. in Ventor roughly 2.5 miles south of Tropicana, the southernmost casino in Atlantic City.

The $20 million grant will be used to restore the historic landmark. The state release said the money will fund the replacement of old and crumbling decking and deteriorating pilings with more resilient, longer-lasting materials. The project will also result in improved access with ADA-compliant ramps and railings.

We recognize that boardwalks are the economic driver for many shore towns and cities. They are also incredibly expensive for local governments to maintain, repair, and strengthen,” commented Jacquelyn Suárez, the acting commissioner of the New Jersey Department of Community Affairs.

“To support this significant state asset, the Murphy Administration created the Boardwalk Preservation Fund to ease the financial burden on local governments when improving their boardwalks. We are confident these grant awards will help our boardwalks thrive and continue to inspire and delight visitors for years to come,” Suárez added.

Critical to Casinos

The Atlantic City Boardwalk is a critical piece of infrastructure for six of the town’s nine casinos. Many guests walk the pathway during the warmer months to access adjacent resorts.

The Boardwalk provides a safe walkway for such pedestrian travel and connects Ocean Casino, Hard Rock, Resorts, Bally’s, Caesars, and Tropicana. Walking from Ocean on the Boardwalk’s northern end to Tropicana is a roughly 1.75-mile hike.

Atlantic City casinos generated brick-and-mortar gaming revenue of $2.84 billion last year, a 2.2% year-over-year increase from 2022. The casinos are concerned about the year ahead, as lawmakers in Trenton consider legislation to force the nine casinos to go smoke-free.

Along with the six Boardwalk casinos, Atlantic City’s Marina District is home to three casino resorts — Borgata, Harrah’s, and Golden Nugget.

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Las Vegas’ Strat Complex Is Site of Yearly Fundraiser for Lung Association

Hundreds of participants are expected to take part in Sunday’s ‘Scale the Strat’ climb-a-thon up the Strat Hotel, Casino & Tower’s 108 floors.

Alexis Trujillo
Alexis Trujillo of Mexico City walks up the stairs at the Strat. He has taken part in prior Scale the Strat events in Las Vegas. (Image: KSNV)

Walkers need to make it up 1,455 steps to the top of the Las Vegas structure, some 800 feet above the ground. The ascent up the stairs takes place between 7 a.m. and noon on Sunday. It benefits the American Lung Association.

Current Record Time

Some participants have been able to make the journey in less than seven minutes. The current record was set last year when Wai Ching Soh of the Malaysia Tower Running Association reached the top stair in 6 minutes and 46 seconds.

Others are more likely to walk up the stairs at a more leisurely speed of about 40 minutes. Whatever their time, there is great anticipation over the philanthropic tradition.

Veteran climbers say it’s well worth the effort.

When you come out of that stairwell, you’re having trouble breathing, and you know what it’s like to fight for every breath,” Shannon Proctor, executive director of the American Lung Association of Nevada, told Las Vegas TV station KTNV last year.

Proctor’s own family members have battled lung disease. Her grandmother died from lung cancer, and both of her parents have chronic obstructive pulmonary disease (COPD).

Participants include locals and visitors from many nations.

We can’t wait to welcome stair climbers from all over the world, as well as locals, who look forward to Scale the Strat each year,” Stephen Thayer, vice president and general manager of the Strat Hotel, Casino & Tower, told Las Vegas TV station KLAS.

Online registration has closed. But in-person registration takes place between 2 and 5 p.m. on Saturday and before 9 a.m. on Sunday.

Weekend registration is $50. There is a $200 fundraising minimum.

The Strat stair climb is affiliated with the American Lung Association’s Fight for Air Climb national events.

Millions Have Been Raised

As of earlier this month, $215K has been pledged for this year’s Strat event. The fundraising goal is more than $300K. Since it began in 2008, Scale the Strat has raised more than $2.8M.

The American Lung Association uses the money raised in Las Vegas and throughout the US in similar events to prevent lung disease and improve respiratory health through advocacy, patient education, and research efforts.

Many of those taking part will be on voluntary teams, made of friends, relatives, or co-workers.

Those taking part can get a 35% discount on a Strat hotel room. They will also be given a $20 food and beverage limited credit. The event’s code is ALA24.

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