Sector Spotlight: Sportsbooks look to rebound from historically bad year

Welcome to the latest edition of “Sector Spotlight,” where The Fly looks at a new industry every week and highlights its happenings.

SPORTS BETTING NEWS: MGM Resorts (MGM) announced that Corey Sanders, COO, will retire from the company after more than 30 years of service. Sanders has agreed to remain COO through Dec. 31, 2025, and to serve as an advisor to the president and CEO through Dec. 31, 2026. The company intends to name a new COO to serve as Sanders’ successor later this month.

Rush Street (RSI) announced the appointment of Shubham Tyagi as chief technology officer, or CTO. He joins RSI’s senior leadership team reporting directly to Richard Schwartz, CEO.

Penn Entertainment (PENN) expects to open the second hotel tower at M Resort Spa Casino Las Vegas to the public on Monday, December 1, pending customary regulatory approvals. The approximately $206M project is slated to open months ahead of the original construction timeline. In addition, the Company is partnering with The Emeril Group to bring Meril, one of New Orleans’ most beloved neighborhood restaurants, to the property. The new hotel tower nearly doubles the capacity of the Company’s property south of the Las Vegas Strip, bringing its total to 765 rooms and suites. Meeting space will also increase, as the new, 15,000 square foot Montese Ballroom is expected to open on October 1, 2025. PENN estimates the overall expansion will add 120 new jobs to M Resort’s workforce.

Gaming and Leisure Properties (GLPI) announced its $225M commitment to serve as the lead real estate financing partner for a new, integrated resort, Caesars Republic Sonoma County, that will be developed on the site of the current River Rock Casino. Pursuant to its agreements with Caesars Entertainment (CZR) and the Dry Creek Rancheria Band of Pomo Indians, GLPI will initially act as a lender to the project, with a delayed draw term loan of $180M, priced at a fixed rate of 12.50%, and a term loan B of $45M, with a current yield to maturity of 13.95%. The blended interest rate of GLPI’s financing is expected to approximate 12.79%. Upon, or prior to, maturity of the six-year term loans, Dry Creek will lease the property to an affiliate of GLPI for a 45-year term, for an amount no less than $112.5M, and GLPI will sublease the property back to an affiliate of Dry Creek. Annual rent on the sublease will be based on a cap rate of 9.75%.

Macau’s gaming bureau reported August gross revenue from games of fortune in the region was up 12.2% year-over-year to 22.156B patacas.

In a regulatory filing, Flutter Entertainment (FLUT) disclosed that its CEO Amy Howe sold 4.1K shares of common stock on August 28th in a total transaction size of $1.25M.

Nevada reported July Las Vegas Strip gaming win up 5.60% to 749.08M versus last year.

Americans are expected to wager an estimated $30B on the 2025 NFL season through legal U.S. sportsbooks, according to American Gaming Association estimates. This represents an 8.5% increase over last season’s revised estimated handle of $27.6B. “This season, fans have more ways than ever to responsibly engage with the game they love. Legal sports betting enhances the fun and friendly competition that make NFL games and traditions even more special,” said AGA president and CEO Bill Miller. “With strong consumer protections and a shared commitment to responsibility, the legal, regulated sports betting industry encourages all footballs fans to have a game plan before placing a bet and ensure their gameday experience – regardless of the outcome of a bet or the game – remains enjoyable.” Since the U.S. Supreme Court’s decision to overturn PASPA in 2018, 38 states and Washington, D.C. now offer consumers safe and regulated options to engage with their favorite sports

ANALYST COMMENTARY: According to BTIG, last year’s regular season was historically bad for the sportsbooks with 72% of contests won by favorites. That is one of the worst win ratios on record with schedule expansion also helping to magnify the financial impact, the firm noted. Sportsbooks and investors alike will be hoping for a more normal backdrop this year with greater parity and more mid to late season upsets, BTIG told investors in a research note.

HSBC downgraded Entain (GMVHF) to Hold from Buy with a 917 GBp price target.

Prediction markets are relevant, but Jefferies expects measured approaches from Flutter and DraftKings (DKNG). The firm views prediction markets as only having fractional earnings power compared to online sports betting. Jefferies added that predictions have limited product capabilities, penetration, and is legally uncertain. The firm told investors that, at best, prediction could offer modest leverage for OSB operators on new state legalizations.

Morgan Stanley raised the firm’s price target on Entain to 1,310 GBp from 1,300 GBp and keeps an Overweight rating on the shares.

Argus upgraded Wynn Resorts (WYNN) to Buy from Hold with a $145 price target. The firm is positive on the company’s prospects for share gains and its leadership position in the Las Vegas market. Argus further cited “significant recovery” in Macau and anticipates “rapid growth” at the Wynn Al Mar Jan in UAE, boosting its FY26 EPS view by $1.20 to $6.50, the analyst said.

Citizens JMP increased its price target on Genius Sports (GENI) to $15 from $13 and kept an Outperform rating on the shares. Internal technology platforms are continuously improving, and despite the noise during the prior two NFL seasons, companies are in a position for “higher highs,” a positive backdrop for football season, the analyst tells investors in a research note. The firm recommends Genius Sports as its favorite way to own the B2B online gaming space.

Goldman Sachs updated its U.S. trackers and noted that online sports betting trends have improved, with same-state online sports betting gross gaming revenue growth of 44% supported by operator-friendly sports results with win margins better-than-average. FanDuel’s market share is tracking down, DraftKings is broadly stable and BetMGM’s market share is up slightly, according to the firm. iGaming same-state GGR growth continues to be very strong in both June and early July data, Goldman added. The firm concluded that overall customer feedback trends from HundredX indicate FanDuel and DraftKings typically have a strong lead versus peers on both net purchasing intent and net promoter score.