Wish you were here: Travel restrictions meant most of the international representatives were unable to travel to G2E. Analysts at Truist noted that the number of mask-mandated attendees appeared to be around 50% of normal but those that were there were clearly “enthusiastic”. The dominant headlines from the week were generated by Bill Hornbuckle’s less-than-surprising comments on DraftKings-Entain suggesting MGM would have a huge say in any deal. Truist duly noted that the “drama came up in every meeting we held”.
Bull: The AGA took the opportunity of G2E to launch its new Gaming CEO Outlook which unsurprisingly showed optimism among the sector’s top execs on gaming’s prospects. The survey, conducted in late August and early September, showed the Current Conditions Index at 115.5, representing “one of the fastest periods of growth” over the past 20 years. The Future Conditions Index, however, was slightly less positive at 102.5, but still nearly half of all respondents expect business to improve further from the current trading highs.
Welcome back: Bill Miller, president and CEO of the AGA, in his welcoming speech:
“A year ago, this hall was empty… One year later, we’ve come roaring back with the best results in our industry’s history. And we’re not just ahead of last year – we’re on record pace.”
Earth, Wind & Fire: Speaking of the recovery, Deutsche Bank is forecasting GGR growth over the two-year Sep19 comparative across five of the six regions they track, with only Louisiana on a downward path due to the lingering impact from Hurricane Ida. However, they do expect the Las Vegas Locals market to contract on a two-year comp. See Datalines below for the latest state-by-state data.
Going cashless: Winning the PR wars this week was cashless gaming provider Sightline. We counted three deals announced with Mastercard, IGT and Konami, an op-ed from CEO Omer Satter for the Nevada Independent calling for digital sign-ups in Nevada and an award for best payment solution. “As expected, cashless was a key focus point with many operators highlighting the wide-ranging potential applications,” said Truist.
Digital demand: One of the takeaways from the week for Jefferies was that gaming suppliers are now under pressure from operators to leverage land-based content into online and social. “Thus all players are pursuing digital, with no clear winners as yet,” they added. “Companies large and small will remain active on the M&A front as they focus on competitive positioning and capabilities,” they said.
“From this perspective, we believe valuations are secondary to validated capabilities as the Street’s focus shifts to technology and content from access to markets and customers,” the Jefferies team added. “We therefore believe it is appropriate to continue more positively skewed ratings on both casino operators and equipment and technology providers.”
Penn to paper: Looking at the current sports-betting marketing war, the Truist team said their meeting with Penn has emphasized the company’s “longer-term, measured approach which is underscored by the strength of the Barstool brand and database.” “We think it’s striking how Penn increasingly sees itself as evolving into a next-generation entertainment company, well beyond just gaming,” they added.
Hailing you know who: In a note reiterating their buy on Caesars, Deutsche Bank said Arizona “will be telling” for the company’s sports-betting ambitions. With synchronized launches, the heavy marketing effort, database strength and a tribal relationship, DB expects Caesars to be a “double-digit market share performer”, thus backing up the case for the group to be a top-four player domestically.
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