Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Light & Wonder reassures investors
Truist Securities’ Barry Jonas focused on the Light & Wonder/Aristocrat news of last week.
“After the close, Light & Wonder held an investor call to address its ongoing and expanded litigation with Aristocrat,” Jonas wrote. “While Light & Wonder’s share price had recovered from the Dragon Train injunction in September, shares are off -10% since last week (vs. Standard & Poor’s flat) with an amended complaint from Aristocrat adding some less material games. The call should help allay ‘contagion’ concerns with Light & Wonder clearly articulating their case and we think for now putting investors more at ease. Irrespective, Light & Wonder has removed any games remotely questionable.
“While immaterial financially, this also highlights wide content diversification with the company also reiterating yet again its 2025 $1.4 billion AEBITDA target. All else equal, we would expect the shares to outperform on this; though we don’t see Light & Wonder immune to wider tariff uncertainty (not addressed on the call). Remain Buy with no changes to price targets estimates at this time.”
New York OSB totals
Estelle Weingrod of J. P. Morgan looked at online sports betting in New York state for the week ending March 30.
“The most recent OSB data released today was for the week ending March 30th, recording a handle growth of +14% year-over-year and GGR growth of -80% year-over-year, translating to an implied hold rate of 1.6% (down 756 basis points year-over-year),” Weingrod wrote. “Quarter to date, OSB handle was up 20% year-over-year, with GGR up 14% year-over-year, thereby resulting in an implied hold rate of 8.3% (down 41 basis points year-over-year).
“For the week ending March 30th, FanDuel reported a handle of $198m, down 2% year-over-year.
“For the week ending March 30th, BetMGM reported a handle of $44 million, up 60% year-over-year.
“For the week ending March 30th, DraftKings (covered by our U.S. Gaming & Lodging team) reported a handle of $178 million, up 16% year-over-year.”
Sportradar’s investor meeting
J.P. Morgan’s Samuel Nielsen covered Sportradar’s recent Investor Day in New York City.
“Sportradar highlighted its ability to leverage its scale and data and technology competencies to deliver on its strategy of innovating on its product and services to provide more value to its clients and league partners,” Nielsen wrote, “and generate higher take rates and pricing power. Sportradar has meaningful visibility into its revenue and cost base over a multi-year period, with ~€2 billion of its projected revenue under contract (or on the books) for the next two years, which would represent ~75% of (pre-investor day) consensus combined 2025 and 2026 revenue. This is noteworthy given broader current investor sentiment around the health of the consumer.”
