Buckle Up

About Buckle Up

“We have said that many times before,” he added. “I think it consists of multiple aspects. We are still open to and keen on consolidating minorities if there is opportunity that is being presented.

“In terms of the SunBet business, there might be opportunities to consolidate locally, but there might also be opportunities outside of South Africa. We are looking at all of it, but we have a very high bar for what we deem to be good investments.”

SunBet launched in Namibia in May, with Bede Gaming powering its platform.

What is Buckle Up?

Many top gaming stocks have underperformed relative to the broader market in recent years, and most of the M&A activity has been facilitated by private equity and other institutions that can more readily capitalise on depressed valuations. There had been hope that rates would start to fall and help alleviate those pressures.

“Publicly traded valuations are a reflection of the current interest rate environment,” Chad Beynon, lead gaming analyst for Macquarie, told iGB. “Whether it’s a long-term financial model on a growth company, you’re going to discount that back at a higher rate, or if it’s just a standard four-wall business, the cash flows in a higher interest rate environment are worth less.”

According to data from Yahoo Finance, the resort and casino sector is -41% over the last five years, and the overall gambling sector, which includes major sportsbooks and online operators, is +7%; the benchmark S&P 500 index, by comparison, is +71% during that span.

How to play Buckle Up

Fantini points to land-based examples like Red Rock Resorts and Monarch Casino as companies that can still attract capital because they offer sensible growth and strong management. That is a telling comparison with the industry’s recent past.

London’s problems are real. Entain’s removal from the FTSE 100 and Flutter’s move away from its London primary listing are evidence of that. But Flutter’s experience in New York shows that changing the listing does not remove the pressure.

The deeper change is global.