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3 And Out – Spread Option Weekly Insight

Spread Option Sports Betting
Spread Option Sports Betting

Welcome to the inaugural post of a new series by the Spread Option podcast called 3 and Out. The goal here is to provide you with at least 3 newsworthy, actionable, and memorable insights about the gaming market at large. 3 and Out will provide major highlights on developments for the US and global sports betting and gaming industry, any legislation coming down the pike, and even some sentiment and fundamental analysis on markets. We’ll even cover updates in crypto, NFT’s, and esports but I promise this won’t be another newsletter telling you how much the last CryptoPunk sold for. All feedback is welcome so don’t be afraid to be honest with us on Twitter @SpreadOption_ Let’s dive in

#1   Blackstone To Acquire Crown Resorts, A Major Australian Casino, For A$6.3 Billion

Private equity colossus Blackstone Inc is set to buyout billionaire James Packer’s entertainment and resort group, Crown Resorts, for a princely sum of A$6.3 billion. Packer, for unaware readers, is the heir to an Australian media empire and boasts a net worth of approximately A$5.72 billion so he’ll collect his cash as he passes “Go”. Blackstone previously owned a 10% stake in Crown Resorts but will complete the cash acquisition at a share price of A$13.10. Crown has struggled with lost revenue due to the COVID-19 pandemic, as well as regulatory hurdles with Australian lawmakers. The gambling license for Crown’s A$2.2 billion high-rise casino on the Sydney waterfront remains suspended despite the casino being ready for operation for more than a year. The Ausralian gambling market is fairly robust, despite drawdowns in 2020 and 2021 due to the pandemic. In 2019, the land down under saw a handle of a little more than A$225 billion or roughly $160 billion USD. Casinos, resorts, and hotels at this stage in the business cycle are no doubt attractive assets for the masters of distress at Blackstone.

#2 An Estimated $8 Billion Was Wagered On Super Bowl LVI

The American Gaming Association estimated last week that nearly 31.4 million Americans would wager a total of $7.61 billion on the Super Bowl. That represents a 78% increase year on year, largely driven by the quick adoption of mobile sports betting platforms in the US. With 19 states having legalized sports betting in some capacity, most notable New York just last month, there’s still a lot of runway left for the domestic betting market. We’ll have to wait and see on final numbers but that’s a fairly massive 1 day handle. Wise listeners of the Spread Option NFL podcast will be delighted to know that 3 out 4 of the hosts of last week’s show were correct on betting Cincinnati Bengals +4 (and even more delighted on the prop bets front).

#3 DraftKings ($DKNG) Reports Q4 2021 Earnings This Friday, Feb 18 

One of the leaders in American sports betting and daily fantasy sports (DFS) will report earnings to the public in the morning on Friday February 18. Below is a quick table of expectations but there’s a couple things to keep on eye on. First, expected EPS is a loss of -$0.82 per share, signaling a decline of -18.8% year over year. Secondly, revenues are estimated at $439.51 million, a potential 36.4% increase from Q4 2020. DraftKings spends a TON on marketing, which is to be expected in a nascent industry with many other, tech-savvy competitors. The battle for market share wages on as by most indicators, DraftKings represents about 30% of the online sports betting market share, compared to FanDuel’s lead of 40%. DraftKings has also spent a fair amount on R&D for NFT’s, back-end systems, and stats content, most notably VSiN.

That’s a wrap on the first edition of 3 And Out. If you liked, hated, can’t get enough of it, let us know on Twitter @spreadoption_ and keep an eye out for more each Monday.

Written by Spread Option

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