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00:00Welcome back to Newswire here on SportsGrid. Sam McQuillan has got himself a brand new
00:09studio. My gosh, what a great work in progress that appears to be going. Let's bring Sam
00:14in, take a look and see how... Oh, there he is. Sam's looking good. I think he got a haircut
00:18even too. Sam, thanks for coming back here on Newswire. Great to see you.
00:21Yeah, Greg, thanks for having me.
00:24All right, so let's get started right away. You don't want to have any fun with me. That's
00:27fine. We'll get right to the news. PrizePix, let's dive in. PrizePix basically getting
00:31themselves in a new partnership with another company. There's some discussion as to whether
00:36or not they would be sold outright. What's the very latest there?
00:40Yeah, interesting development here. PrizePix has hired MOLUS & Co., which is one of the
00:45largest investment banks in the world, to explore potential merger and acquisition opportunities.
00:51MOLUS & Co., if you're not familiar with them, helps facilitate high-profile deals
00:56like the Sprint and T-Mobile merger that happened a few years ago. They've helped MGM sell off
01:02a couple of casinos. So they're no stranger to the gambling or fantasy space either. But
01:07it's being reported that PrizePix is apparently not interested in selling itself outright
01:12to another company. So that kind of leads us to speculate what exactly might happen
01:17here, whether they'd be buying somebody else, whether they'd be merging with someone else.
01:22On paper, you would think a company like DraftKings or FanDuel would be really interested in PrizePix
01:27because of the database of players that they have in states like California and Texas,
01:32basically places that those companies have been pining away to have legalized forever.
01:37And PrizePix has been able to kind of offer this, shall we say, adjacent product, the
01:42whole pick-up thing going on, where you can basically do parlays as long as they're in
01:47an entry. But off of paper, PrizePix and the other pick-up companies, the underdogs of
01:55the world, sort of have bad blood with the companies. They've kind of, you know, behind
02:01closed doors or sometimes outside of closed doors, have accused them of leading this kind
02:06of attack against them where states have cracked down on their products. So it makes you kind
02:11of think that a company like DraftKings or FanDuel wouldn't really be interested in merging.
02:15And you've had other companies like Underdog start off with fantasy sports betting and
02:20then use that as a way to launch into sports betting. PrizePix has been pretty vocal about
02:26not wanting to do sports betting, and you can't really blame them when they've been so
02:29successful doing the fantasy product, which is a lot cheaper and probably has a lot better
02:35return. So you're kind of wondering what might happen here. You know, they've obviously
02:42hired this firm to make some sort of move. I don't know if they'd be acquiring a competitor
02:45like Underdog or Sleeper. You kind of have to see how this all develops. So it's going to be
02:50something to watch. I guarantee, you know, it's going to be another interesting year with all
02:54this fantasy stuff coming to a head once the political stuff gets going. So the fact that
03:00PrizePix is making moves at this time is definitely a significant sign to keep watch going forward.
03:06Yeah, I would agree. All right. So now it is earnings season. And for you folks over at Legal
03:11Sports Report, that means we get the very latest going on with all of the sports betting
03:14operators. Let's start off with Caesars. What did their numbers look like?
03:19Yeah, it's really interesting for reporters like us to kind of get a good look under the hood of
03:24what these sports betting companies are doing. And Caesars was one of the first to report. They
03:28had a really, really strong second quarter, especially when you're talking about the entire
03:34business, but also specifically online sports betting and iGaming. They had $45 million in
03:41adjusted earnings before interest taxes, depreciation, depreciation, sorry, and
03:47amortization. It's kind of a tongue twister. It's very jargony, but that's basically the way we
03:52look at when you're talking about making profit in the industry. That's been a big theme over the
03:56last couple of years. One of these companies is going to start making profit. Caesars wants to
04:00make a $500 million profit sort of by the end of next year. So the fact that they were able to do
04:05$45 million just in the first half of this year is pretty impressive when you look at what they did
04:10last year, when they only had $7 million in EBITDA at that time. So the way that they've done it is
04:16essentially growing their iGaming app. Sports betting really hasn't been as big of a priority
04:23for them as much in terms of growing Handle and growing users. They've really focused on using the
04:28Caesars product. They launched the App Palace last year, which they said is really fueling growth
04:34there. They had, I think, Handle and iGaming is up 39% this year, which is obviously huge when you
04:40talk about a business with better margins for a company like that. Sports betting is also improving,
04:46but not as much at the same rate. They had a 7.2% hold compared to 6.4% last year. So it's getting
04:53better, which they're talking about, you know, the product is improving, which, you know, when it
04:58comes to the product, it's how can you get people to bet more parlays? How can you have the most
05:01attractive same game parlay offering that people are going to basically bet more on these bets that
05:06don't turn out as well for them typically as kind of straight bets on different sides of games and
05:12totals and things like that. So they're kind of catching up in that department. But sports betting
05:16is definitely still not as much of a priority as iGaming. So it'll be really interesting to see going
05:21forward, you know, whether they pivot when they kind of get happy with iGaming. And okay, maybe this is
05:27the time you can utilize the sports betting product more. But so far, kind of the plan that they've had
05:31of doing iGaming first and getting that right seems to be working out for their bottom line.
05:36Yeah, I agree. A very interesting company, I think, to watch in Caesars as well. Now, the one that that
05:42we all talk about here on the show, the two, I should say, probably are FanDuel and DraftKings, because
05:47those are the leaders. And those are the ones that really set the bar for everyone else. They also, I know,
05:51recently had their earnings report. And not surprisingly, you know, Sam, it just seems to me that
05:58everywhere I look for promos involve parlays. And if that's the case, that's telling me what's driving the
06:05bus for these companies.
06:08Yeah, you're 100% spot on, Craig. It's kind of like, you know, where there's smoke, there's fire. If these
06:12companies are going to continue to offer me more parlays and say, hey, you know, we can juice your bet even
06:18better if you add another parlay leg. Please do it. Here's all these promos around parlays. That's really
06:23telling you what they want you to do, obviously. And it seems to be working for DraftKings. In the first
06:28quarter, they had really impressive numbers having a 9.5% hold, despite having a lot of
06:36having one of the worst quarters in terms of sports results, a lot of favorites. One, they got hammered in
06:42football, they got hammered in baseball early on. But DraftKings was able basically to weather the storm by
06:50offering so many parlays where they were actually able to squeeze more money out of their existing
06:54customers. So this go around second quarter, it's gonna be really interesting because, you know, sports
07:00results have gone a lot better in favor of the books and worse against betters, presumably because last
07:05quarter was one of the worst ever. So now it's about how is DraftKings able to take what they did with a
07:09really bad quarter? And wow, can they do an even more amazing job now that they had kind of normal, a normal
07:16environment to work with. So they might be kind of victims a little bit of their success with the last
07:22quarter. So investors are going to be looking for a blow us away kind of quarter in terms of how much they've
07:28been able to grow a new customer and how much they've been able to grow a hold because all that kind of fits
07:34in of their vision of having 10.5% hold at the end of the year, which, you know, doesn't make much sense unless
07:39you have context, the industry average is kind of 8%. So that'd be a pretty big margin that they're hoping to
07:45get and in turn, have their first year of profitability. So it's going to be a pretty big report that investors
07:52are hoping comes out from DraftKings and hoping that it keeps them kind of steady on this path. And I'm sure the
07:59market will react really quickly. And as you said, these are the leaders in the space. So whatever DraftKings
08:03and Fandula are doing, everyone else is going to follow. Caesars is starting to do more parlays because it worked
08:08with DraftKings. So maybe if they offer something new, we can hear the rest of the industry can also look at, hey, we
08:17haven't had that work.
08:18All right, Sam, thanks so much for coming on Newswire. We'll catch up with Sam again next week. Now there is one
08:24story to update from the National Football League today. Reporters who are covering the Cleveland Browns say that
08:30on a kickoff return drill. Now remember, kickoffs are different in the NFL this season, which is leading to more
08:37action and less touchbacks. Deontay Foreman, who was playing on special teams, if his name sounds familiar, played
08:43running back for a number of years in the NFL. He was on special teams and was injured in a play and the medical part had
08:50to come out and take him off the field and immobilize him. So naturally, when anytime this happens in the NFL, want to
08:56bring you that quick update to Deontay Foreman running back on the Cleveland Browns.