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Entain Seen Adding Sandler to Board, Push for BetMGM Sale Could Be on Table

Entain Plc (OTC: GMVHF) is reportedly considering adding Eminence Capital founder Ricky Sandler to its board of directors — a move that could potentially open the door to a full or partial sale of the operator’s 50% interest in BetMGM.

Sandler Entain
Eminence Capital CEO and CIO Ricky Sandler. Entain could add him to the board of directors. (Image: Institutional Investor)

Citing unidentified sources with knowledge of the matter, The Sunday Times reported that Entain could add Sandler to its board before the end of this month. The rumor surfaced less than a week after the Coral owner announced the immediate resignation of CEO Jette Nygaard-Andersen — an executive of whom Sandler was openly critical.

In June, he bashed the $750 million purchase of STS Holding, noting the issuance of new stock to fund the deal signaled Entain’s lack of understanding of basic finance, or naivety among investors. As of the end of the second quarter, Eminence Capital owned 2.1% of Entain’s freely floating shares.

Assuming Entain does appoint Sandler to the board, it could be viewed as a move to appease activist investors Dendur Capital and Sached Heam Capital. Those two hedge funds recently took stakes in the gaming company, noting they wanted Sandler appointed to the board, adding that Entain should include him in the process of filling other board vacancies.

Interesting Timing for Entain to Appoint Sandler to Board

In addition to speculation of Sandler joining Entain’s board on the heels of Jette Nygaard-Andersen’s resignation, the rumor appeared just three days after Keith Meister’s Corvex Management announced it took a 4.4% stake in the gaming company.

That’s potentially noteworthy because Corvex is a major investor in MGM Resorts International (NYSE: MGM) — Entain’s 50/50 partner in BetMGM. Additionally, Meister is a member of the casino operator’s board.

Previously, Sandler has floated the idea of Entain selling all or part of its BetMGM stake to raise capital and renew its focus on markets in which it’s firmly established, including Australia, Europe and the UK. MGM has made no secret of its desire to control all of BetMGM and it would likely be open to negotiating a buyout of Entain, which would be more cost-effective than purchasing the Ladbrokes owner outright.

Entain will not appoint Meister to its board because of his membership on the BetMGM and MGM boards, according to The Sunday Times.

Could Be Good Time for Entain to Mull BetMGM Sale

It remains to be seen if Sandler gains an Entain board seat and what type of change he and his fellow activist investors augur for, but a case can be made that now is an opportune time for the gaming company to consider divesting some or all of its BetMGM position.

The internet casino and online sportsbook operator is increasingly profitable and is targeting $500 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2026.

Conversely, BetMGM is nearing self-funding status, meaning Entain wouldn’t be on the hook for more capital contributions to the online gaming entity. That could make it attractive for Entain to retain its interest in the business unless a potential MGM offer for that stake is highly compelling.

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Tupac Murder Testimony Could Crack Notorious B.I.G. Murder Case

In the course of testimony given in the Duane “Keffe D” Davis’ trial for the murder of legendary rapper Tupac Shakur, it’s entirely possible that new evidence might be uncovered n the also still-unsolved murder case of equally legendary rapper Christopher “Notorious B.I.G.” Wallace.

Biggie Smalls, Tupac Shakur
Biggie Smalls poses with rapper Tupac Shakur at Club Amazon in New York City on July 23, 1993. (Image: Getty)

Retired Las Vegas Metro Police detective Clifford Mugg testified before a Clark County grand jury that the “theory was accurate” that both murders were related. Mugg said that investigators in both Las Vegas and L.A. were in agreement on that. His testimony was found in transcripts from the first month of grand jury proceedings against Davis, which began in late July,

Mugg didn’t state how they were related. However, Cathy Scott, the best-selling author of 1997’s The Killing of Tupac Shakur and 2000’s The Murder of Biggie Smalls, says the LAPD has known for decades.

They’re related by ties to Suge Knight, according to Scott. He was the head of Death Row Records, a member of the Mob Piru subset of the Bloods street gang, and the other intended target in Shakur’s murder. Knight and Shakur participated in a beatdown on Orlando Anderson, a member of the rival South Side Crips street gang and Davis’ nephew, only hours before Shakur’s murder.

Scott has followed both cases closely since she was an investigative reporter at the Las Vegas Sun, and the conclusions she drew in her books came from hours of interviews with carefully cultivated sources inside both police departments.

Tupac Shakur, Suge Knight
Minutes after this photo was taken, Tupac Shakur (shown driven by music mogul Suge Knight) was fatally shot. (Image: Corjuni)

The Facts

Shakur was fatally shot on Sept. 7, 1996, and Wallace, aka Biggie Smalls, was killed in a drive-by shooting in L.A. six months later, on March 9, 1997.

Duane “Keffe D” Davis, an admitted member of the South Side Crips, was the first person arrested in either case. On September 29, Las Vegas police indicted him for the murder of Shakur. Prosecutors say he ordered and masterminded the shooting, and admitted buying the gun, though he didn’t pull the trigger. In Nevada, that’s still grounds for murder.

Davis was recently granted a continuance of his arraignment. He’s charged with murder with the use of a deadly weapon with a gang enhancement. His next scheduled court appearance is on October 19.

No arrest has ever been made in the Wallace case.

The Theory

According to Scott, Wallace’s murder was ordered by Knight from prison. Wallace was the star rapper on Sean “P. Diddy” Combs’ New York-based Bad Boy Records label.

Christopher "Notorious B.I.G." Wallace and Sean "P. Diddy" Combs.
Christopher “Notorious B.I.G.” Wallace and Sean “P. Diddy” Combs. (Image: clubkiller.com)

“But it wasn’t really a retaliation because Biggie Smalls and P. Diddy had nothing to do with Tupac’s murder,” Scott told Casino.org. “Suge was simply jealous that his top performer, Tupac, was gone and P. Diddy still had Biggie Smalls.”

Scott asserts the LAPD wasn’t motivated to solve Wallace’s murder because it would mean a public admission that one or more of its own officers participated in the murder.

“It’s almost like the LAPD is trying to cover up for their own because they wanted the case to go away,” she said.

This isn’t a new theory. It was central to the wrongful death civil suit originally brought by Wallace’s estate against the City of Los Angeles in 2002. The suit, seeking $500 million, named the hitman as Amir Muhammad (Harry Billups), a Knight friend who was briefly considered a suspect, but never arrested.

After that lawsuit resulted in a mistrial, the family brought a second one against the city in 2007. That suit also named two LAPD gang officers, Rafael Perez and Nino Durden, as defendants. According to the suit, Perez, an alleged affiliate of Death Row Records, admitted to LAPD officials that he and fellow gang officer David Mack (who was not named in the suit) “conspired to murder and participated in the murder of Christopher Wallace.”

Author Cathy Scott. (Image: Good Day LA)

According to Scott, Perez, Durden, and Mack, who was Knight’s college roommate at UNLV from 1985 to 1987, plotted Wallace’s murder. They hired Muhammad, who drove a greenish-bluish Chevy Impala to the Peterson Automotive Museum, where Wallace was leaving a hip-hop party.

“And guess what kind of a car police found in the garage when they went to Muhammad’s house to search it?” Scott asked. “It was the same car. I mean, it’s like a neon sign, but they’re opting not to charge him?”

U.S. District Judge Florence-Marie Cooper dismissed the Wallace family’s second suit on a technicality. It didn’t comply with a California law requiring the family to give notice of its claim to the state within six months of Wallace’s death. So the Wallace family refiled its suit in 2008 against the city, dropping the state law claims.

The suit was officially dismissed in 2010, though Scott believes that the family received “an undisclosed settlement” to drop it.

Bad Cop, Bad Cop

Though none of the police officers alleged to have participated in Wallace’s murder was ever convicted of that crime, all were convicted of other crimes in the ensuing years.

Perez was sentenced to a total of seven years in prison for stealing 6 lbs. of cocaine from an LAPD evidence locker, for violating the civil rights of a suspect, and for possessing a firearm with an eliminated serial number. He was released in 2004.

Durden served five years in prison on six California state charges, including perjury, filing false police reports, and conspiracy to obstruct justice. His sentence was served concurrently with a three-year sentence for federal charges of civil rights violations and possessing an illegal firearm. He was released in 2005.

Mack served 14 years in prison for robbing $722K from a Bank of America and was released in 2010.

Impact of New Evidence

“Now that the Tupac case is being pursued, I think there’s a good chance the LAPD will finally be motivated to solve the Biggie case, too,” Scott said. “I think some new evidence might come to light from this trial. But I think it might spur the LAPD to handle the case even if there isn’t any (new evidence).

“It would put an end to everything, you know, all the questions and the conspiracies and the other nonsense, and allow these two human beings to finally rest in peace.”

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Coney Island Casino Could Create 4,000 Union Jobs – Would They go to Locals?

coney_island_casino_could_create_4000_union_jobs.As the bidding and pitching process for new casinos to win licenses in and around New York City heats up, we’ll be taking a closer look at some of the local potential impacts. Known collectively as the “downstate New York” casino license tender, at least one new casino will open with two other full-fledged casino licenses possibly going to existing lottery casinos in the area.

The first and second licenses are “widely believed” to be destined for the walls of Resorts World New York in Jamaica, Queens, and MGM’s Empire City Casino at Yonkers Raceway in that city. Both locations already host large and popular video lottery terminal-fed (VLT) slot machines and table games and could conceivably garner one or both of the first licenses while a third license is entirely up for grabs under costly terms and potentially huge financial benefits.

The Minimum Bid is $500 Million

The minimum bid for each of the three licenses is half a billion dollars, however, as observers have noted in the past, the NYC area could be the biggest untapped casino market on earth with a populace of some 19 million people.

The Brooklyn Paper will be the main source for our article today along with our own reporting and a bag of facts generated by gambling authorities in the state, the World Casino Directory, and other sources as noted throughout the story.

Thor Equities is looking to develop property it owns on Coney Island, a historical icon as well as a southern Brooklyn neighborhood where opinions run hot and cold as well as tepidly indifferent to the prospects of a large new Las Vegas-style casino and entertainment complex there.

Developers believe some 4,000 new jobs would be directly and indirectly created in Brooklyn if the consortium’s eventual bid is ultimately accepted. Not only jobs but good-paying union jobs according to former New York City council member and a pro-casino task force member, Robert Cornegy.

According to the local paper, Cornegy believes that jobs with a decent wage and year-round employment would be created in the neighborhood between gaming, hospitality, and hotel operators opening doors to the middle class for many people who have not had such opportunities in front of them in some time.

Cornegy reportedly told Brooklyn Paper: “Being able to bring decent paying, year-round jobs is something that I feel like I am compelled to push and demand.

“For people of color, black people in particular, labor has created a pathway to the middle class in a lot of different industries. The hotel trade is one of the more lucrative opportunities.”

While some people don’t hold these sorts of jobs in high esteem, Cornegy says they can pay as much as $30 per hour and offer a chance at upward mobility as well as enticing benefits.

He particularly focused on the fact that the neighborhood already has its own “brand” and that built-in advantage could be wasted if it’s not used.

Community Board 13 is a New York City government entity that serves the areas of Brighton Beach, Coney Island, Gravesend, and Sea Gate. Public meetings are still held via Zoom rather than in person but the Board is still active.

Community Board 13 chair, Lucy Mujica Diaz seems to be wary of that number and told the Papoer that she wonders what percentage of those jobs would actually go to community members and stated that the jobs might not be the best match for many community members.

Mujica Diaz is quoted as saying, “I don’t see someone in hospitality lasting that long,” according to Brooklyn Paper. “I don’t think it would be a good fit for some of the people because there are still unanswered questions.”

Statistics for the neighborhood show a slightly higher unemployment rate than the rest of the city overall with 5.6% in Kings County compared to 5.3% for NYC overall.

A member of the “casino bidding team” purportedly stated that recruitment and job training would be preferentially provided to locals. Local job fairs and other “pipelines” of opportunity would also be afforded to local citizens. It may be of interest to note that when Bally’s was pitching its Chicago Casino, the first real casino ever in the nation’s third-largest city, a promised number of jobs and matches was part of the package.

According to Carnegie’s thinking: “I think it’s important to note how far, even when we talk about the disparities in the city, those disparity numbers are always increased in a place like Coney Island,” he said.

Diaz noted that the neighborhood’s current seasonal nature can feed into the lack of job opportunities as well. The Coney Island poverty rate is reportedly 24% while that of the city overall stands at 20%. She worries that locals wouldn’t apply for the obs as even making a single dollar more in salary can increase the rent people in public housing must pay. Over 100,000 New Yorkers live in one of the 79 developments operated by the New York City Housing Authority with about 11,000 Community Board 13 area residents being part of that number. C13 also serves Brighton Beach.

Better Pay is Not Always Attractive

Diaz explained in more detail how the current structure of eligibility for that housing complicates matters and asserted she was confident that not even 50% of the jobs would go to locals. Some senior residents simply don’t want or need full-time “lucrative” employment as the income would simply lower the income insurance benefits they already receive from Social Security.

There are regular community members who are opposed to the casino being located there as well. However, when it comes to “grassroots” organizations it’s not always easy or even possible to know true motives as casino license competitors and other “stakeholders” can easily influence the voice of opposition movements when checks and balances are not established prior the bidding process getting underway. Preliminary bidding for the licenses has officially been underway for several months.

The Paper noted that casino proponents are still in the process of “workshopping” a proposal and haven’t completed their RFP or Request for Proposal which city casino planners began offering in early January.

The state has still not published a submission date for the proposals being sought by the New York State Gaming Facility Location Board.

Cornegy maintains the project would be good for job creation. “This project looks to be one of the largest job creators in southern Brooklyn,” he said.

Source: Developers say proposed Coney Island casino would bring 4,000 new jobs to the People’s Playground, The Brooklyn Paper, June 15, 2023

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Genius Sports Could Be Hidden Gem Among Sports Betting Stocks

Shares of sports betting data provider Genius Sports (NYSE: GENI) are higher by nearly 57% year-to-date and on May 26, closed at the highest levels since February. A sell-side analyst believes the stock has more upside ahead.

Genius Sports
Genius Sports appears on the screens of the NYSE after it went public. An analyst says the stock can deliver more upside. (Image: Genius Sports)

In a recent note to clients, Lake Street Capital markets analyst Eric Martinuzzi initiated coverage of Genius Sports with “buy” rating and a $7 price target. That implies upside of 25% from the May 26 close. That’s slightly below the Wall Street consensus of $7.50, but Martinuzzi is now one of nine analysts covering Genius with a “buy” or “strong buy” rating. Another calls the stock a “hold.”

The analyst described Genius as a “picks and shovels player” that markets live betting data and “other sticky services” to global sportsbook operators, including Bet365 and DraftKings (NASDAQ: DKNG), among others. Some analysts believe the stock  could benefit from bettors’ increasing preference for in-game or live wagers over pregame investments.

That thesis could further be enhanced by same-game parlays — bets operators such as DraftKings and FanDuel are leveraging to significant success.

Genius ‘Baby’ Thrown Out with ‘SPACwater’

London-based Genius Sports went publicly in April 2021 following a reverse merger with special purpose acquisition company (SPAC) dMY Technology Group, Inc. II. The stock caught some of the tail-end of investors’ enthusiasm for SPAC and sports betting stocks, but slumped last year as market participants punished equities previously tied to blank-check companies.

At one point in 2021, Genius traded north of $24 and Martinuzzi describes the subsequent tumble experienced by the stock as a case of the “Genius baby being thrown out with the SPACwater.”

Genius is on the cusp of turning free cash flow positive and is growing faster than its higher-valued peers,” wrote the Lake Capital analyst. “We also feel it has better rights relationships — NFL, English Premier League — and offers faster profit growth than data licensing competitor Sportradar. We anticipate Genius showing fundamental outperformance driven by a decade-plus growth in U.S. sports betting as more states legalize online gambling.”

Genius hovering around profitability and generating free cash flow are noteworthy traits if for no other reason than that they’re rare in the universe of sports betting equities.

Genius Sports Impressive Client Roster

Martinuzzi is right to mention Genius Sports’ client portfolio — a roster that includes not only the English Premier League and the NFL, but the PGA Tour, Major League Baseball (MLB), the NCAA and Euroleague Basketball, among others.

In addition to the NFL itself, which is also a major Genius shareholder, several of the league’s teams are Genius clients as are some of the biggest names in sports broadcasting, including ESPN.

Beyond Bet365 and DraftKings, Genius’s other sprotsbook clients include 888 Sports, BetMGM and Caesars, according to the data provider’s website.

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William Hill Regulatory Failures in the UK Could Set a New Record for 888

Making a deal to purchase William Hill’s non-US gambling assets from Caesars Entertainment might prove to be a nightmare for new owner 888. The bookmaker, one of the largest companies of its kind in the world, is preparing to accept one of the largest fines in history.

The William Hill sportsbook inside Buffalo Bill’s Hotel Casino
The William Hill sportsbook inside Buffalo Bill’s Hotel Casino. The UK arm, which now belongs to 888, is under fire for alleged regulatory failings. (Image: The Nevada Independent)

The Daily Mail reports that sources indicate the UK Gambling Commission (UKGC) could impose a fine of £15 million (US$17.81 million) on William Hill. After receiving new information, The Mail then said the amount could actually be much higher, possibly more than £20 million (US$23.75 million).

That would be substantially greater than the £17 million (US$20.19 million) fine Entain received last year, setting a new record. 888 is reportedly preparing for the worst, already setting aside money to cover the fine.

888’s Downswing

The fine results from violations that fall within the scope of “social responsibility and anti-money laundering obligations.” One source told the media outlet the fine against William Hill could be “north of £20 million.”

For the bookmaker, this would be a huge blow. 888 Holdings is likely to drop off the FTS250 index this month, a stock market index that contains 250 UK-based mid-market cap companies listed on the London Stock Exchange. Since September 2021, its share price has fallen by 85%.

888 bought William Hill last summer from Caesars for £2 billion (US$2.37 billion). In addition, its portfolio includes online casinos and more than 1,000 retail sports betting points.

This isn’t the first time the British operator has run into trouble, and several recent issues are causing the company grief. In January, an investigation began into accounts of VIP customers from the Middle East in relation to suspected money laundering.

888 determined that many of its betting whales were able to deposit and withdraw massive sums of money with virtually no oversight. As a result of the scandal, CEO Itai Pazner immediately stepped down after more than 20 years with the company. Lord Mendelsohn, 888’s chairman, took his place until the board finds a permanent replacement.

Now, everyone is waiting for the company’s fresh financial statement, which 888 will release at the end of March. At around the same time, the company’s CFO, Yariv Dafna, is going to step down.

More Trouble on the Horizon

888 is operating illegally in Austria. At least, that’s what the country’s supreme court has determined. It believes 888 and Flutter have been offering their services in Austria, while Casinos Austria is the only company with a license to do so.

As a result, the court determined that users could file claims with 888 and Flutter to receive reimbursement for their losses. The Financial Times reported a few days ago that more than 2,500 users have already received more than €75 million (US$79.31 million) in compensation from several operators since January.

888 and Flutter also reportedly owe around an additional €34 million (US$35.95 million), which they are allegedly withholding as they fight Austria.

On two occasions since 2017, 888 has had to pay regulatory fines in the UK. Those amounted to £17.2 million (US$20.5 million) in just two penalties, and it doesn’t look like the company will close its checkbook anytime soon.

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