Two Sides Of The Same Coin
Two Sides Of The Same Coin
Penn Entertainment and Boyd Gaming have taken radically different approaches to sports betting. Thus far, one of those approaches has paid off.
The Bulletin Board
NEWS: Penn and Boyd. Two companies; two different approaches to mobile betting.
LOOSE ENDS: Nebraska gambling lacks oversight; Resorts Digital CEO steps down; France iCasino discussion.
QUICK HITTER: Online casino app downloads: Caesars is gaining ground.
NEWS: BetMGM becomes the third interstate online poker operator in the US.
AROUND the WATERCOOLER: Election roundup.
STRAY THOUGHTS: Just like yesterday…
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Choose Your Fighter: Penn vs. Boyd
Penn and Boyd are among the largest retail casino operators in the US, but as Earnings+More reported on Monday, the two regional casino operators have taken radically different approaches to mobile betting. Boyd is content with a low-risk, low-reward approach, while Penn has taken the go-big-or-go-home attitude to a whole new level.
Per E+M:
It was the best of times: In its recent Q3 earnings report, Boyd Gaming raised its guidance for 2024 online adj. EBITDA to $75 million from $65 million - $70 million previously.
It was the worst of times: In comparison, at Penn’s investor event at G2E, it said Q3 adj. EBITDA losses would come in at $90 million - $100 million.
So, how did the two companies arrive at these disparate results?
Boyd sold its market access to FanDuel in 2018 for a 5% equity stake.
Penn sold its market access to DraftKings, but as E+M points out, “It failed to negotiate any equity in DraftKings,” opting to take a stake in “PointsBet and also theScore, which it later ended up paying $2bn to acquire.”
As part of its effort to chart its own course, Penn acquired Barstool Sports, which cost the company around $500 million, before it abruptly scrapped its arrangement with Barstool (amid growing regulatory scrutiny of Barstool’s core business) and inked a ten-year licensing deal with ESPN. That deal has a final sticker price of $1.5 billion.
What’s interesting about the two approaches is that five years later, Boyd’s low-risk, low-reward strategy has placed it in the advantageous position where it could acquire Penn, including the online pieces, at an extremely discounted price.
But, given how others have performed, that 5% equity stake for market access looks like one of the shrewdest decisions in the post-PASPA era.
You can read my thoughts on the performance of the Penn-ESPN mashup from January and more recently.
Loose Ends: Nebraska Oversight; Resorts Digital CEO Steps Down; France iCasino
How about some oversight? Nebraska might have an accounting problem on its hands. Per the Omaha World-Herald, State Auditor Mike Foley “questioned the Nebraska Racing and Gaming Commission’s ability to successfully carry out that oversight task.” the audit, conducted by Foley’s office, concluded oversight was lackluster and at times nonexistent during the state’s first year of legal casino gambling. That doesn’t bode well for efforts to legalize mobile sports betting in 2025.
Ed Andrewes bids adieu to Resorts Digital: Another one of the OGs in the US online gambling space is calling it a day, as Ed Andrewes, who took Resorts Digital from nothing to one of the most prominent players in the NJ market, announced he is stepping down at the end of the month. “After a wonderful 9 years building Resorts Digital Gaming and following its acquisition by Boyd Interactive, I will be stepping down as CEO at the end of November,” Andrewes wrote on LinkedIn. His departure comes roughly a year after another OG, Thomas Winter, left Golden Nugget Online Gambling.
French officials discuss online casino gambling: Per Jake Pollard’s Gaming and Co substack, “French gambling stakeholders are meeting today (Wednesday) with government representatives to discuss how they can move forward on the highly sensitive issue of online casino regulation.” STTP THOUGHTS: This could be one of the big international topics of 2025 and could influence how US jurisdictions tackle online casino legalization.
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Quick Hitter: Caesars Grows Online Casino App Downloads
Eilers & Krejcik Gaming (a newsletter sponsor) spotted an interesting trend in online casino app download data in its latest Online Casino Monitor (paywall).
According to EKG, Caesars is the fastest-growing of the Big 4 — FanDuel, DraftKings, BetMGM, and Caesars.
Looking at each company’s market share of app downloads for the start of the NFL season over the last two years — 8/8 - 10/21 in 2023 vs. 8/10 - 10/23 in 2024 — shows slight declines for FanDuel and DraftKings -3% and -4% respectively, while BetMGM’s share has increased by 1%.
Then there is Caesars, which has seen its market share jump 6% year-over-year to 15%.
EKG notes that Caesars launched in August 2023, which means it had a much lower floor than its competitors, but Caesars also upgraded its online casino app in May 2024.
BetMGM Poker Combines its Michigan and New Jersey Player Pools
BetMGM announced Wednesday that its Michigan and New Jersey player pools have merged. According to Pokerfuse.com, the linking of the two states could propel BetMGM to the top of the US online poker charts in terms of overall traffic.
“Currently, BetMGM Poker Michigan averages around 90 concurrent cash game players, while BetMGM Poker New Jersey sees about 80, based on a 30-day moving average. Together, the combined BetMGM MI+NJ network would reach approximately 170 concurrent cash game players.
“This player pool size would place BetMGM Poker on equal footing with WSOP Online, which averages around 170 cash game players, and above PokerStars USA, which averages about 150.”
The news comes on the heels of the launch of RSI’s BetRivers Poker and a rush of other poker-related news:
An effort by a Texas cardroom to bring online poker to the Lone Star State.
There was a late push in New York for an online poker-only bill by State Sen. Joseph Addabbo Jr.
DraftKings has launched a new peer-to-peer poker game, Electric Poker, within its online casino in Michigan and, soon, Connecticut.
GG Poker has acquired the World Series of Poker brand, which is expected to bring GG Poker’s tech into the legal US market.
PokerStars relaunched the North American Poker Tour last year and landed Rob Gronkowski for the next season of the PokerStars Big Game poker show.
The World Poker Tour announcing an enhanced Club WPT sweepstakes product is forthcoming.
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Around the Watercooler
Social media conversations, rumors, and gossip.
Today’s chatter will deal with Tuesday’s election.
Missouri Sports Betting: I posted about Missouri sports betting yesterday. The margin is razor thin, but a spokesperson for the opposition group, the Missourians Against the Deceptive Online Gambling Amendment, told Robert Linnehan the group would not initiate a recount request. However, as Linnehan notes, “This does not preclude another group from doing so, however.”
Casino referendums go 1-2:
Arkansas voters revoked a Pope County casino license.
Missouri voters rejected a Lake of the Ozarks casino proposal.
Virginia voters overwhelmingly approved a casino in Petersburg that will be owned and operated by Cordish Companies, a vehemently anti-online company that will hurt Virginia’s already slim chances of legalizing online casinos.
Colorado uncaps tax revenue distributions: Colorado voters approved Proposition JJ, which allows the state to earmark more of the sports betting tax revenue it collects to water projects. The vote wasn’t close, with more than 76% support. Previously, the amount of sports betting tax revenue that went to water conversation was capped at $29 million.
Good news; bad news for Minnesota sports betting: Gov. Tim Walz will stay in Minnesota, which leaves sports betting efforts in the same place they were in 2024 (or maybe vastly improved if a recent report of a compromise comes to fruition).
More problematic for sports betting, the Minnesota House is going to be evenly split or with a slight edge to Republicans (two Democrat-held seats will likely go to a recount). This could slam the brakes on legislative efforts in 2025 as Republicans will be looking to avoid giving Walz a political victory when he runs for reelection in 2026. The Democrats had a six-seat majority in 2024.
Texas gambling expansions: Lt. Gov. Dan Patrick may be leaving Texas for a spot in the Trump administration. However, as I’ve said, he’s unlikely to be replaced by a pro-gambling expansion politician.
STTP THOUGHT: Keep an eye on who Trump appoints as Secretary of the Interior. As I mentioned earlier this week:
“The Donald Trump administration was not seen as friendly to tribes, starting with Department of Interior Secretary Ryan Zinke, who clashed with tribes on environmental issues. Trump’s tribal animosity dates back to his casino days, when he made several inflammatory comments about tribal gaming.”
Stray Thoughts
And let’s finish out the lunacy of election week with The Who…