Bet On It: Score Media Surges After Sports Betting Bill Passes In Canada

This week's in the sports betting and iGaming space the news includes operators are behind a commercial betting proposal in Florida and an Ohio bill deadline receives lifeline and in Canada, single-sport gambling will pass soon.


Florida has authorized sports and event betting under Florida law at "professional sports venues and pari-mutuel facilities and statewide via online sports betting platforms by entities authorized to conduct online sports betting, and by Native American tribes with a Florida gaming compact, only for persons age 21 years or older," according to a statement by the Florida Division of Elections. The statement goes on to say that it "requires legislative action to regulate sports betting. Legislature may tax betting revenues, and all such taxes are required to supplement the Educational Enhancement Trust Fund." Earlier in the week DraftKings (DKNG) and FanDuel (PDYPY) were behind a proposal to allow for commercial statewide wagering in Florida and have filed a proposed ballot initiative, Sports Handle's Jill Dorson reported, citing multiple industry sources. One industry source says "interested parties" have already contributed a "significant amount" to the initiative campaign, and that information will become public in mid-July, when official funding reports are filed.

Penn National (PENN) shares rose on Thursday after the company provided a Q2 outlook higher than consensus analyst expectations. "The midpoint of our expected revenue and Adjusted EBITDAR ranges reflect a quarterly sequential improvement of 18% and 25%, respectively, and Adjusted EBITDAR margin improvement of 220 basis points. When compared to the three months ended June 30, 2019, we expect revenue, Adjusted EBITDAR and Adjusted EBITDAR margin to increase by 10%, 32%, and 625 basis points, respectively. We believe this year-over-year and sequential improvement not only highlights continued strong demand trends, but also underscores our ability to drive sustainable margin improvement," Penn National Gaming said in a statement. The company also announced that it plans to offer $400M aggregate principal amount of eight-year senior unsecured notes in a private offering.

Genius Sports (GENI) has been selected by the Argentine Football Association as its exclusive Official Data & Streaming partner for all AFA competitions. This partnership will be central to AFA's strategy to increase fan engagement and visibility over all levels of Argentinian soccer. Genius Sports has also been granted official data distribution rights for media across all AFA competitions, enabling brands, publishers and advertisers to exploit its suite of personalized advertising, content and fan-messaging solutions. To help grow Argentinian football's global reach, Genius Sports will install cutting-edge GeniusLive+ cameras at over 100 venues, capturing broadcast-quality streams that will power AFA's OTT platform. Genius Sports will work in partnership with Pixellot and Argentinian company La Corte for the production of all GeniusLive+ events, enabling AFA to live stream over 2,000 new games from eight competitions per season.

Bally's (BALY) announced that it has entered into a multi-year market arrangement with Boot Hill Casino & Resort, located in Dodge City, Kansas. "With the pending Kansas state sports betting legislation, Boot Hill Casino is committed, as a manager on behalf of the Kansas Lottery, to timely and effectively implement "Bally Bet," Bally's mobile sportsbook, to provide Kansas sports fans access to sports betting upon enactment of the legislation.

Bally's expects that its media partnership with Sinclair Broadcast Group, which provides it with access to integrate content into Sinclair's portfolio of 19 regional sports networks, will also attract sports fans in neighboring states to the Kansas mobile sportsbook," the company said. All gaming in Kansas is owned and operated by the Kansas Lottery. The arrangement, as required by law, would license, transfer or lease the necessary Bally's mobile sportsbook elements to the Lottery to offer Kansas sports fans a premium sports betting platform.

Earlier in the week, Deutsche Bank analyst Carlo Santarelli upgraded MGM Resorts (MGM) to Buy from Hold with a price target of $54, up from $42. The "next leg of the stock story" is likely to be improving margins that extend well beyond the "over 30%" targets management has discussed as the Las Vegas Strip goal, as well as the 32.5% peak margins of 2006, Santarelli told investors. The analyst sees out year consensus estimates for MGM as being too low and, accordingly, the perceived embedded sports / iCasino valuation as too high. As such, despite the strong performance in shares, he raised forecasts for MGM and upgraded the shares.


Rick Westhead, author and correspondent with The Sports Network, W5, CTV National News, tweeted: "Bill C-218 has officially passed in the Senate and will become law in coming days. Single-event sport gambling on its way to Canada." Credit Suisse analyst Benjamin Chaiken said Score Media and Gaming (SCR) is the "biggest winner" from Bill C-218 passing the Canadian Senate yesterday. C-218 legalizes single-game sports betting in Canada, whereas previously only multi-game parlays were permitted, Chaiken told investors in a research note. The Canada legalization also has implications for the U.S., as Score Media "now has a cash flow engine to help it opportunistically gain share" in America, says the analyst.

Despite the recent rally, Chaiken said Score shares "still only captures a fraction" of the company's long term potential. He maintained an Outperform rating on Score Media with a $50 price target. The stock closed Tuesday up 8% to $29.70.

Macquarie analyst Chad Beynon noted that the bill passing represents a "major catalyst" for the industry, potentially unlocking a market with approximately 40M people and a proven appetite for sports betting. Assuming the country fully legalizes, the analyst estimates the Canada online gaming total addressable market is greater than $4.6B in 2030, using the same assumptions of $60/adult for sports and $75/adult spend for iGaming as he does for the US. The analyst told investors that as Canada approaches legalization, industry stakeholders are positioning themselves for a potential push up north. Operators including DraftKings, FanDuel and PointsBet have spoken on expansion to Canada. 


While Benchmark analyst Mike Hickey told investors that the Ohio sports betting bill will likely have to wait until next fall, there is still a chance the bill could get done ahead of the June 30 deadline. Action Network's Ryan Bulter reported that Ohio lawmakers shoehorned sports betting legislation into an unrelated veteran identification bill Thursday night, restarting backers’ hopes they can squeeze the bill in by a self-imposed June 30 deadline. Speaker Bob Cupp told media outlets earlier this week the bill would have to wait until after June, but supporters of the bill remain hopeful.

“We think we have an amendment that will finally get gaming accepted and be part of the Ohio revised code that is long overdue,” said Senate Majority Leader Kirk Schuring, one of the bill’s leading advocates, on the Senate floor Thursday. “We think this amendment will get us there.” Components of the bill include 25 statewide mobile licenses.

Ohio's 11 casinos and racinos can have two mobile partners, or skins, each, but professional sports teams can have only one. Butler noted that Ohio’s eight combined NFL, NBA, NHL, MLB and MLS franchises are likely to apply for licensure, along with the PGA Tour and NASCAR. Ohio would join Washington D.C., Arizona, Illinois, Virginia and Maryland among the first jurisdictions to approve sportsbooks within sports venues. The bill expands the retail sportsbook license pool from to 40 from 33 as well.

As for what's next, Butler wrote, "It's not a sure thing to pass the House of Representatives yet, but tacking the unrelated sports betting language to a banal voter identification measure the House already passed as a standalone bill could help the newly conjoined legislation clear the full General Assembly. “I think we’re on the threshold of getting something done,” Schuring told Action. “I think this is an amendment to this bill that hopefully the House cannot refuse. It’s good policy and hopefully, once and for all, we’re have this done and we can see sports gaming in Ohio sometime in 2022.”

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