Sports Betting and iGaming Monthly Report | June

27 June 2022

Sports Betting ETF Monthly Report: Key Takeaways


The last few weeks have been busy with many companies in our ETF reporting Q1 results. Generally, the “picks and shovel” companies eg Everi and IGT, reported better than expected results with the B2C players eg DraftKings guiding towards lower than expected losses for the full year. Nonetheless, the stocks have been down heavily with many hitting 12 month lows, with the market, including tech, selling off. As a result, companies such as MGM Resorts and Penn were busy buying back stock. [1]

On May 2, MGM announced that it has commenced a recommended public tender offer for 100% of the shares of LeoVegas, a European-based global iGaming company, for approx. SEK61 per share or US$607m in an all-cash offer, 44% to the last closing price of LeoVegas shares (Nasdaq Stockholm). LeoVegas, founded in 2011 and headquartered in Stockholm, is a European iGaming/Sports Betting B2C operator comprised of ~70%+ Casino, 15% Live Casino and ~15% Sports. TTM revs/EBITDA as of March 31, 2022, were €393m/€48m (US$415m/US$51m), which implies 12x EBITDA and 1.5x Sales on the B2C business. [2]

Macquarie analysts said in their April 2022 report, "We have long admired LeoVegas, given their vertical integration, transition out of grey markets and their B2C growth in regulated markets during the last few years. With roughly 50% of revenues from the Nordics (Sweden being the greatest), we believe LeoVegas’ success stems from efficient customer acquisition, but more importantly a strong competitive edge, technology platform, which has helped with third-party integration and new market launches. This iGaming platform, Rhino , in our view, may have been a meaningful reason for the acquisition. In addition, LEO has OpenBanking (lower transaction payment process cost) and a portfolio of in-house games (Blue Guru Games). Regarding sports, LeoVegas controls most of the tech, but outsource risk/trading to Kambi. They also recently acquired Expekt. LeoVegas also is a top player in Canada, a recently launched market. From a brand standpoint, LeoVegas has also has a strong portfolio of over 16 brands" [3]

This further confirms our view that there will be increased M&A through ’22 given B2C plugging of holes and/or B2B vertical integration. As a reminder, MGM Resorts made a bid for Entain in January 2021 and there is some speculation that this maybe revisited at some point, according to an April 2022 Jefferies report. [4]

MGM Reports better than expected Q1 EBITDA of $694m v consensus of $663m. They acquired $1b in stock during Q1 and another 6.2m shares in April. Bet MGM had revenues of $271m and MGM’s 50% share of the operating losses were $92m. [5]

DraftKings reported Q1 revenues of $417m v guidance of $400-420m and an EBITDA loss of $289m v guidance of $320-340m. For the full year, they raised revenue guidance and lowered their EBITDA loss from guidance to $760-840m from $810-910m. [6]

Caesars reported Q1 EBITDA of $296m with Caesars Digital recording an EBITDA loss of $554m and therefore dragging down the overall performance of the company. [7]  In their May 2022 report, Morgan Stanley expect Digital losses of $1.2b in 2022 and then a major reduction to $340m in 2023. [8]

Everi reported Q1 EBUTDA of $90m which was 3% above consensus.

IGT also reported than expected EBITDA of $433m which was 7% above consensus. The EBITDA from their Digital & Betting business increased by 63% to $17m.

Penn National Gaming reported EBITDAR of $495m v consensus of $468m. The company raised full year guidance by 2%. In their May 2022 report, Morgan Stanley expects a FY EBITDA loss for their Interactive business of $59m before turning to a $13m EBITDA profit in 2023. [9]

Bet MGM hosted an analyst day on May 12, 2022. Overall the tone remained very bullish. Some key points:

• The company expects the market to grow to $37b. This is an increase on their previous estimate of $32b due to the inclusion of California ($2.5b) and others.

• They are on track to achieve revenues of $1.3b in 2022, after $850m in 2021.

• They are targeting long term market share of 20-25% and EBITDA margins of 30-35%. They believe their large scale and relationship to their parents (MGM Resorts and Entain) will drive 7-12% in margin benefits. [10]


Please note that all performance figures are showing net data. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product.


Macro Outlook

The US Sports Betting and iGaming market is expected to expand 23x from $2.3 billion in 2020 to nearly $53 billion in 2033, according to Goldman Sachs. Europe and Asia are also expected to be high growth markets. [11]

Regulatory changes giving US states the right to legalise Sports Betting and iGaming is the major growth catalyst. Similarly, an easing regulatory landscape in markets such as Macau and Singapore fuelled massive growth in a short period of time. [12]

Other growth drivers include spending conversion from illegal to legal platforms, wider social acceptance of sports betting as an entertainment activity, technological improvements and expansion of product offering including in-play betting. 

Unlike other high growth industries, digital gaming can deliver high margins for leading operators in the near term, with expected EBITDA margins of 25-35% according to Morgan Stanley, DraftKings and MGM. Relatively moderate capex also drives strong Free Cash Flow and ROI metrics. [13]



Sports Betting ETF Performance (as of 31.05.2022)








Fischer Sports Betting & iGaming UCITS ETF (Acc)







Solactive Fischer Sports Betting and iGaming Index







Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31.05.2022

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. 

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