Welcome to the latest edition of “Bet On It,” where The Fly looks at news and activity in the sports betting and iGaming space.

SECTOR NEWS: “Sen. Keenan’s amendment to raise the sports betting tax from 20% to 51% has been rejected by the Massachusetts State Senate via unanimous consent,” according to an X post by Bill Speros.

DraftKings (DKNG) announced the completion of its previously announced proposed acquisition of Jackpocket, the leading digital lottery app in the United States. “Today we are announcing the completion of our acquisition of Jackpocket, and the commencement of our value creation plan,” said Jason Robins, CEO and Co-founder of DraftKings. “We are well-prepared to quickly launch cross-sell programs, further improve customer acquisition efficiency, and continue to innovate and differentiate with our overall product portfolio for our customers. We look forward to continuing to deliver enhanced value to our customers and shareholders as we integrate Jackpocket into the DraftKings ecosystem.” Northland told investors that the transaction was anticipated to be finalized by the second half of 2024 and was excluded from the company’s guidance ranges. The firm is optimistic about this strategic acquisition, as its prior research on the online lottery sector has given it a positive perspective on Jackpocket’s market positioning and offerings. Northland believes this acquisition could lead to higher customer lifetime values and improve the customer acquisition process.

Gaming and Leisure Properties (GLPI) acquired the real estate assets of the Silverado Franklin Hotel & Gaming Complex, the Deadwood Mountain Grand casino, and Baldini’s Casino, for $105.0M in aggregate. The transactions are expected to be immediately accretive. Simultaneous with the acquisition, GLPI and affiliates of Strategic Gaming will enter into two cross-defaulted triple-net lease agreements, each for an initial 25-year term with two ten-year renewal periods. GLPI also provided $5M in capital improvement proceeds at the closing of the transactions for a total investment of $110M. The initial aggregate annual cash rent for the new leases is $9.2M, inclusive of capital improvement funding, and represents an 8.4% capitalization rate. Located in Deadwood, SD, Silverado was one of the first gaming properties in the state when it opened in 1990. Silverado is expected to begin construction on a hotel renovation in 2024, using a portion of the $5M in capital improvement proceeds funded by GLPI at the closing of the transactions. Located in Sparks, Nevada, Baldini’s is an approximate 9-acre gaming property that offers approximately 492 slot machines across a 43,000 square foot gaming floor that opened in 1988. Located in Deadwood, South Dakota, DMG is an 11 acre gaming property that offers 141 slots and 8 table games.

NEW HEIGHTS IN NEW YORK: Data from New York reveals that the second week of May generated a record $70.9M in gross gaming revenue, or GGR, the highest weekly total since the state’s launch in January 2022. Jefferies said this result was driven by both a strong handle and a margin of 13.3% compared to the long-term average of 8.7%. This exceptional performance is likely due to: the NBA playoffs, featuring 13 games and a 38% underdog win rate; and the recycling of previous customer winnings, with the previous week’s margins being notably low at 4.8%, according to the firm. DraftKings emerged as the primary beneficiary, achieving a 15.8% margin and capturing 51% of the GGR share. DraftKings’ record $36.5M GGR was three times its weekly average over the past year. Jefferies noted FanDuel (FLUT) also performed well, posting a 13.5% margin and a 38% share, with its GGR being 1.6 times its weekly average.

NCAA AIMS TO GET RID OF PLAYER PROPS: Mike Mazzeo of Legal Sports Report noted that NCAA Managing Director of Enforcement Mark Hicks recognizes that a nationwide ban on prop bets involving student-athletes might result in a rise in illegal sports betting. However, NCAA President Charlie Baker has been leading efforts to eliminate player prop betting markets to reduce harassment and prevent student-athletes from betting on themselves. Additionally, as Hicks mentioned, the NCAA aims to eradicate the illegal offshore betting market.. “It might happen. My guess is some people will (bet offshore). But the alternative for us is to do nothing,” Marks told LSR at SBC Summit North America. “So we feel like we need a strong policy directed toward removing that target off student-athletes’ backs. “At the same time, we absolutely are encouraging federal law enforcement to go after the unregulated black market. It’s not either that one or this one. It’s why can’t we be doing both?”

NEVADA DENIES PROPSWAP: The Nevada Gaming Control Board, or NGCB, has once again ruled against PropSwap and the concept of companies facilitating the trading of sports bets, according to Devin O’Connor of Casino.org. On Thursday, the NGCB voted to dismiss a proposed amendment to Regulation 5.240, which would have created a new category of service provider in the state’s legal sports gambling industry. PropSwap, Inc., a Chicago-based firm, had requested the regulatory agency to establish a “betting ticket resale service provider” class, allowing for the operation of an online sports betting ticket exchange. The three-member NGCB raised various concerns and chose not to pursue the new sports wagering licensing category. NGCB Chair Kirk Hendrick expressed willingness to revisit the issue in the future, but stated that the regulatory addition is not currently warranted. Hendrick noted that adopting such a category could encourage more sports ticket exchange entities to seek entry into the state, which is not desirable at this time. “I’m a big believer in new concepts and entrepreneurship … but I have a number of concerns about this activity in Nevada. Is this something the Nevada gaming industry needs and customers in Nevada need and want?” Hendrick asked. PropSwap currently is live in more than 20 states. The company allows sports bettors to sell a ticket that is unsettled to cash in early.

ADDITIONAL ANALYST COMMENTARY: Raymond James initiated coverage of three U.S. gaming operators: Boyd Gaming Corporation (BYD), Caesars Entertainment (CZR), and Penn Entertainment (PENN).. The firm started Penn with an Outperform rating and $20 price target, Boyd with an Outperform rating and $67 price target, and Caesars with a Strong Buy rating and $55 price target. Disappointing first-quarter results, weaker-than-expected digital/online performance, and macroeconomic challenges have driven the stocks to attractive valuations, according to the firm. Despite headwinds in both Las Vegas and regional markets, the stocks are currently priced as if fundamentals are significantly worse than they actually are. Raymond James is bullish on the sector primarily due to these valuations following the recent stock adjustments. Finally, the firm anticipate better results from land-based casinos as the year progresses, increased profitability in the online/digital segments, and improving balance sheets moving into 2025.

Argus upgraded Wynn Resorts (WYNN) to Buy from Hold with a $110 price target. The firm contended that the prospects for a faster than-anticipated rebound in Macau, strength in Las Vegas, and solid results at the Encore Boston Harbor warrant a higher valuation, the analyst told investors in a research note. Wynn should also benefit from the return of convention groups to Las Vegas and expand its online sports betting business, Argus adds, boosting its FY24 EPS view by 95c to $5.90 and its FY25 view by 70c to $6.20.

Stifel downgraded PlayAGS (AGS) to Hold from Buy with a price target of $12.50, up from $12, after the company announced that it agreed to be acquired by private equity firm Brightstar Capital for $1.1B.

PUBLICLY TRADED COMPANIES IN THE SPACE INCLUDE: Accel Entertainment (ACEL), Bally’s (BALY), Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (FLUT), Gambling.com (GAMB), Gan Limited (GAN), Genius Sports (GENI), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn Entertainment (PENN), Rush Street Interactive (RSI), Super Group (SGHC) and Wynn Resorts (WYNN).