Regulated Esports Wagering Platform Bringing Live Tournaments to Las Vegas

Unikrn Partners and MGM Resorts International (MGM) have partnered to bring competitive gaming and live esports tournaments to LEVEL UP, the MGM Grand Hotel & Casino’s interactive gaming lounge. Unikrn, a regulated esports wagering platform, will host bi-weekly competitions within the skill-based adult playground; with cash prizes and UnikoinGold tokens to be won. MGM Resorts Executive Director of Interactive Gaming Development Lovell Walker noted that the partnership reflects the company’s “commitment to the future of esports”; an industry projected to hit $2.3 billion in global revenue by 2022.

Howie Long-Short: Unikrn is privately held, with backers like Mark Cuban, but you can invest in Tabcorp Holdings; the Australian wagering, gaming and Keno operator that participated in the company’s June ‘15 $7 million Series A round. Tabcorp trades on the Australian stock exchange under the symbol ASX: TAH. In late October, Unikrn raised an additional $40 million in an ICO to expand its business across the European Union; the largest token sale in video game/esports history.

Fan Marino: You’ll be able to wager on esports competition, but sportsbooks on MGM properties (in Nevada) will not be listing Aces’ (WNBA) games. MGM Resorts International owns the franchise and has pulled the team off the board due to the potential conflict of interest (i.e. fixing games). Did you know the Boston Celtics and Houston Rockets are also off boards in Vegas? Caesers (in NV) no longer takes bets on Celtics games (Gary Loveman) and Golden Nugget properties in Las Vegas and Laughlin, do not offer lines on Rockets games (Tillman Fertitta).

Unikrn Partners with MGM Resorts International to Host Esports Tournaments in LEVEL UP at MGM Grand Las Vegas

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Consolidation Trending in Gaming Industry

Consolidation is trending in the global gaming industry. In the U.K., tighter regulations that could result in dramatic revenue declines for gaming and sportsbook operators are driving the movement. Both Paddy Power Betfair (PDYPY) and William Hill (WIMHY) are exploring potential mergers with CrownBet; though no deal is imminent. In North America, fierce competition between regional companies has crippled profitability growth; as a result, operators are considering potential mergers. Penn National Gaming (PENN) is in discussions with Pinnacle Entertainment (PNK), to form an entity that would control 45 gaming properties within 12 states and Canada; it would not own any real estate on the Las Vegas Strip.

Howie Long-Short: PENN and PNK and are ostensibly already partners; Gaming and Leisure Properties (GLPI), a REIT owned by PENN, owns most of the land where PNK operates its casinos. Creating a larger “network” of casinos would in theory keep regional players from competing properties, but that seems like wishful thinking to me. Legalized sports gambling is a potential $150 billion market. The big players (MGM, CZR) are coming to town armed with megaresorts; how can smaller operators without the resources compete? I should point out that the Australian entertainment group Crown Resorts, owns a 62% stake in CrownBet (OTC: CWLDY).

Fan Marino: After Michael Flynn agreed to cooperate in the Russia investigation, odds of President Trump’s impeachment soared. Betfair was quoted saying, “Trump has hit his shortest price yet to leave office before the end of his term”; the company has impeachment currently sitting at 4/6 (59% probability). Paddy has the odds at 4/7 (63% probability); the company’s Head of Trump Betting (yes, that’s a title) said that prior to news of Flynn’s cooperation, odds sat at 11/10 (47% probability).

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MGM Announces Plans to Open New Jersey’s 1st On-Site Sportsbook at the Borgata Casino

The Supreme Court is going to hear arguments on December 4th surrounding New Jersey’s right to legalize sports gambling and there seems to be a foregone conclusion that the SCOTUS will rule in the state’s favor before the end of June 2018. MGM Resorts International (MGM) seems particularly confident, announcing its intention to become the first casino in the state with an on-site sportsbook. At last week’s Sports Betting USA Conference, Jay Hood, the company’s VP of Race and Sports, said development has begun on a $7 million sportsbook at the Borgata hotel and casino in Atlantic City. But ESPN gaming writer David Purdham isn’t convinced we’re going to see legalized gambling in 2018, placing odds on the high court siding with New Jersey at -$110 (or just 53.5%).

Howie Long-Short: Experts have estimated a legalized sports gambling industry could be worth $150 billion, but Monmouth Park owner Dennis Drazen believes that number to be as high as $400 billion. Either way, Drazen (and William Hill) is prepared to cash in once the Professional and Amateur Sports Protection Act of ‘92 is repealed. Back in ’11, when NJ voters approved sports betting legislation, Drazen partnered with William Hill (OTC: WIMHY) on a sportsbook at Monmouth Park. That property, which was turned in to a sports bar, is currently being converted back to its intended use. Drazin said the Monmouth Park sportsbook could open within weeks of a SCOTUS decision.

Fan Marino: Give DraftKings credit for being creative in finding ways to engage fans. The company recently partnered with MSG Networks (MSGN) on a live fantasy show that ran parallel to a Knicks game broadcast and as of Q1 2018, will be airing select Euroleague games within their mobile app; enabling fans to flip between their fantasy contest and a live game broadcast. Unfortunately for those invested in daily fantasy, legalized gambling is set to put the industry out of business. In-game betting is going to replace it.

A Borgata Sportsbook, An NBA Pivot And What Else We Learned From A Week Of Sports Betting Conferences

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MGM, Professional Sports Leagues Backing Esports Development Studio

Former WME-IMG executive Tobias Sherman, backed by seed funding from MGM Resorts International (MGM), has launched Foundry IV; a studio that intends on developing games with “esports prioritized at the earliest DNA.” That philosophy differs from industry norms, which tends to see publishers use competition as a method of marketing their games. Sherman, who previously lead the esports department at WME-IMG and helped to co-found the ELeague, will act as the company’s CEO. Foundry IV is raising a Series A round, with professional sports leagues said to be invested.

Howie Long-Short: Take-Two Interactive (TTWO) reported Q2 revenue figures that beat market estimates ($577 million to $511.3 million) and the company raised full-year adjusted revenue forecasts (from $1.65 billion to $1.93 billion), as sales have been strong for both NBA2K ’18 and Grand Theft Auto 5. TTWO also reported a 31% YOY increase (to $303 million) in digitally delivered net revenue and said that it expects to record net bookings in fiscal ‘19. Shares rose 10.58% following Wednesday’s news.

Fan Marino: Activision Blizzard’s (ATVI) Call of Duty: WWII generated $500M in sales over its first 3 days on the market; while setting a day 1 record for full-game downloads on PS4. The new game sold twice as many copies as last year’s Call of Duty: Infinite Warfare did during the first weekend; which would seem to indicate that gamers are not yet tired of the 15-year old franchise. That’s good news for esports franchise owners. I’ve had difficulty envisioning scenarios in which games could remain popular over an extended period. Perhaps my concerns are overblown.

Former WME|IMG executive Tobias Sherman creates game studio Foundry IV

Editor Note: The summary for this story was co-written by our friends at The Water Coolest. Check out TheWaterCoolest.com for the latest market news and professional advice.

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Kevin Harvick’s Investment Portfolio, DANICA Premiers Tonight

Kevin Harvick won the Monster Energy (MNST) NASCAR Cup Series race at Texas Motors Speedway last weekend, which gives him a spot in the “Championship Four”; the 4 remaining drivers who will race for the title at Homestead-Miami Speedway on November 19th. JWS got the exclusive opportunity to sit down Kevin to discuss his investment portfolio, sponsorship partners and sports marketing agency.

JWS: How important is it to you to have sponsors that you would invest in?

Kevin Harvick: The companies that you believe in and invest in, are the companies that you want on your car. I can tell you Exxon Mobil (XOM) is in my portfolio.

JWS: How have you managed to maintain long-term partnerships with several of your sponsors?    

Kevin Harvick: We’ve been fortunate through the years to develop what we have with the Busch Brand (BUD), Jimmy John’s, who’s been with us since 2009 and Textron (TXT), who started with us back in 2007. We’ve kind of found the niche with each of those companies in terms of what they like to do, how they like to entertain and where they like go.

JWS: Does having KHI Management (his sports marketing agency) help in terms of signing NASCAR sponsorship deals?

Kevin Harvick: The thing that makes us unique and different is that we have a sports agency that represents 2 PGA golfers, Donald Cerrone (UFC) and Harrison Burton (motocross). We’ve tried to make ourselves more diverse so that when we are trying to cut a deal for a NASCAR sponsorship, we have a family of assets that we can blend in; golf tournaments, UFC fights, etc.

JWS: How closely do you follow the market?

Kevin Harvick: I wake up with Maria (Bartiromo). I like to understand what is happening in the world. I spend a lot of time paying attention to it because I’m intrigued by it.  

Howie Long-Short: Metro-Goldwyn-Mayer (MGM) acquired Epix, buying out Viacom (VIAB) and Lionsgate (LGF.A) back in April for $1.031 billion. The company has underperformed over the last 6 months (+2.8% compared with industry-wide growth of 15.6%), and analysts are projecting Q3 earnings ($.33/share) that would be a 43% YOY decline. The company will report later today.

Fan Marino: If you enjoy sports documentaries, check out DANICA; premiering this evening at 8p EST on Epix (or for free at epix.com). The film, directed by broadcasting pioneer Hannah Storm, focus on Danica Patrick; the most successful woman in the history of professional motorsports. It’s a rare, candid look at Danica as a competitor eagerly preparing for her next race; a woman confidently considering when she wants to start a family; and a budding mogul carefully considering thinking about her next steps.

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MGM RESORTS PURCHASES WNBA’S STARS WITH PLANS TO MOVE FRANCHISE TO LAS VEGAS

MGM Resorts International (MGM) has purchased the San Antonio Stars of the WNBA and has announced intentions to relocate the franchise to Las Vegas for the start of the 2018 season. The Stars, who become the 3rd pro sports franchise to announce relocation to Sin City since ’16, will play its home games at the MGM owned 12,000 seat Mandalay Bay Events Center. NBA legend Bill Laimbeer has been named the team’s head coach and president of basketball operations.

Howie Long-Short: With acquisition of the Stars, MGM becomes is the 2nd gaming company to purchase a WNBA team; Mohegan Sun owns the Connecticut Sun. While news of the acquisition isn’t going to move the MGM share price, the move makes sense as the Stars will fill open dates at a MGM venue. The Stars are the first professional sports franchise under a MGM umbrella that includes the T-Mobile Arena; home to the Las Vegas Golden Knights. MGM is treating the Stars as a trial run for an NBA team, as they would like to land a co-anchor tenant for their arena.

Fan Marino: Speaking of gambling, for the 2nd time in 3 weeks MNF finished with a wild backdoor cover. With the Titans up 7, the ball on their own 27 and just a minute to play; a single first down would have won the game and made those who bet the Colts +7.5 winners. However, on 3rd and 5, Derrick Henry broke free for a 73-yard TD to ice the game and reward those who placed their money on the Titans. Had Henry simply gone down after picking up the first down, the Titans still would have won the game but the team would have failed to cover 7.5 points.

MGM Resorts revealed as buyer of WNBA franchise for Las Vegas

TWITTER CAN BEAT THE HOUSE

A study published by the Economic Enquiry, found that Twitter (TWTR) is a better predictor of sporting event results than odds makers. During the ’13-’14 English Premier League season, mathematicians at the University of East Anglia (U.K.) used software to analyze 13.8 million tweets (5.2/second). They compared the results with in-play betting on Betfair (PDYPY) and found that at any given second, a positive “combined tone” about one team indicated that team had a better chance of winning than the odds suggested. The software’s recommendations produced an average ROI of 2.28% on 900,000 bets; particularly astounding when you consider PDYPY gamblers lost an average of 5.41% on those same matches.

Howie Long-Short: The predictive power of social media works if you’re analyzing the right sections of the crowd. TWTR can beat the house. Unfortunately, the average gambler lacks the ability to analyze the tone or crowd worth following; and certainly, not in real time. The “wisdom of crowds” isn’t going to put casinos out of business.

Fan Marino: Speaking of gambling, casinos were illegal in Japan until parliament passed a controversial law last December allowing them to be part of larger resorts. Now American gaming companies are actively competing to gain foothold in a market that can be “bigger than Las Vegas”, according to Chairman of MGM Resorts International (MGM) James Murran. Both Las Vegas Sands (LVS) & MGM have repeatedly stated they would be willing to spend at least $10 billion in Japan, while Melco Resorts & Entertainment (MLCO) has expressed it would be willing to spend “whatever it takes” for the opportunity.

Twitter Could Be The Key to Successful In-Play Sports Betting, Says Study