Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. Today’s issue includes high expectations being hit, fourth quarterly drop and a multi-billion dollar transaction.
163
Casino and racetrack operator Penn National Gaming has completed its previously announced acquisition of a 36 per cent interest in Barstool Sports for $163m.
In a deal that values the latter at $450m, the purchase price is comprised of approximately $135m in cash and $28m in non-voting convertible preferred stock.
Pursuant to the transaction terms, Penn National is now Barstool Sports’ exclusive gaming partner and has the sole right to utilise the brand for all of its online and retail sports betting and igaming products.
Furthermore, the company will also increase its ownership in Barstool Sports to approximately 50 per cent after three years (or earlier, at Penn National’s election) with an incremental investment of approximately $62m, consistent with the implied valuation at the time of the initial purchase, and has a path to establish control and full ownership of Barstool Sports.
Upon closing, Penn National designated Chris Rogers, senior vice president and chief strategy officer and Jon Kaplowitz, senior vice president of interactive gaming, to join Barstool Sports’ seven-member board of directors.
26
Bragg Gaming Group anticipates 2019 revenue to hit the higher end of expectations, as the firm posts a financial outlook for the year ahead in which it praises a “potential breakthrough in German regulations”.
Publishing a business update, including preliminary 2019 financial results and a 2020 financial outlook, Bragg expects 2019 revenue to come in at approximately €26m for 2019, representing growth of over 37 per cent as compared to 2018 on a pro forma basis, if Oryx had been a part of the group during the period. The group’s €1.4m EBITDA will be positive for the first time.
Management of Bragg Gaming Group attributes growth to:
- The core casino aggregator platform performing “extremely well” in sales processes.
- Successful notable new client wins, including Unibet, Betsson, Leo Vegas, BetClic and Mr Green.
- Stabilisation and growth of key German revenues following renewal of licenses in the middle of the year.
- Growth of regulated revenues, including in Columbia through its agreement with FullReto.co, as well as Romania, Sweden and Croatia.
4.6
MGM Resorts International, MGM Growth Properties and Blackstone Real Estate Income Trust have confirmed the completion of its previously announced $4.6bn transaction.
The deal sees BREIT acquire the Las Vegas real estate assets of the MGM Grand and Mandalay Bay, in a continuation of MGM’s asset light strategy which has also seen the firm announce Bellagio and Circus Circus Las Vegas sales that will provide cash proceeds in the region of $8.2bn. BREIT has also purchased approximately 4.9 million MGP Class A shares at a price of $30.67 per share.
Simultaneous with the closing of the transaction, MGP AND BREIT have entered into a joint venture regarding the properties, which will be owned 50.1 per cent by the former.
Furthermore, in connection with the completion of the transaction MGM Resorts has entered into a long-term triple net master lease for both properties, and will continue to manage, operate and be responsible for all aspects of the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments. MGM also states that it has provided a full corporate guarantee of rent payments.
Representing a further continuation of the organisation’s asset-light strategy, the transactions become the next step in MGM’s quest to become a leader within the global gaming, hospitality and entertainment sectors.
37
US gaming technology firm Scientific Games has shown an improvement in its full-year figures for 2019, despite the year’s final quarter seeing a significant swing from a net profit of $207m to a loss of $37m.
The prior year included a $183m reversal of a reserve related to resolving antitrust litigation alongside Shuffle Tech and other plaintiffs. On a full-year basis net loss narrowed to $118m from $352m.
The company saw a 2.6 per cent drop in quarterly revenue to $863m (2018: $886m) impacted by lower machine unit sales and a drop in gaming revenue primarily due to fewer systems launches in Canada. Full-year revenue rose a little over one percentage point to $3.4bn.
Consolidated adjusted EBITDA fell 4.3 per cent from $343m to $328m during Q4 with lower lottery and gaming AEBITDA offset by a digital increase of 75 per cent to $21m. A slight full-year rise to $1.33bn was driven by growth in lottery, SciPlay and digital segments, which was largely offset by a gaming decline.
