Wall Street Bets: Analysts take on Gambling.com, Caesars, New York OSB

Gambling.com buys Odds Holdings

Analyst Barry Jonas of Truist Securities December 15 looked at prospects for Gambling.com, and it’s purchase of Odds Holdings.

“Last week, Gambling.com announced the acquisition of Odds Holdings for an initial upfront payment of $80 million consisting of $70 million in cash and $10 million in stock,” Jonas wrote. “The company plans to fund the cash payment through its expanded credit facility. An additional $80 million payment will be contingent on Odds Holdings EBITDA to double for the full year in 2026 compared to 2024. Closing is expected to occur on January 1, 2025 (per management).

“Management expects the transaction to be immediately accretive upon closing. For 2024, Odds Holdings expects to generate revenue and adjusted EBITDA of approximately $26 million and $12 million, respectively. Gambling.com expects that under its management EBITDA derived from the Odds Holdings will grow by at least 20% in 2025.”

Caesars and VICI Properties

“The key discussion of the past week focused on Caesar’s and VICI Properties, given the pressures on the Caesar’s regional business of the past year, where competition and construction have impacted results,” wrote Jeffries analyst David Katz in a note December 15. “Note that results are expected to stabilize, according to management, in 2025 based on the opening of Danville and New Orleans, which are significant projects. However, the question investors have posed is whether pressure on that business could continue and whether there could be a range of outcomes to the expiring VICI lease which includes escalators and expires in 2035, with the option to renew residing with the tenant. In our view, it’s a bit early to focus on 2035 operating outcomes and while the regional operating execution for Caesars has been disappointing in 2023-24, the assumption that the business would not redirect in the next decade is aggressive.”

New York OSB figures

Joseph Greff, analyst with J. P. Morgan, looked at New York online sports betting figures for the week ending December 8, 2024, as released by the New York Gaming Commission.

“Quarter-to-date OSB GGR is tracking up 9% year over year, while handle is tracking up 13%, implying an 8.2% hold rate, versus 8.5% during the comparable 2023 period,” Greff wrote on December 13. “For the week ending December 8, 2024, GGR was down 35% year-over-year, while handle was up 25%, implying a 7.2% hold rate versus 13.9% in the comparable period ended 12/10/23.”