UK analysts: Roar Digital has yet to gain real US market share
GVC/MGM JV reports “good progress” in Q4 trading update, but analysts warn it is not growing fast enough
UK analysts have criticised GVC’s JV with MGM, Roar Digital, for not gaining significant market share in the US, despite reporting “good progress” in a Q4 trading update this morning.
London-listed GVC gave a vague overview of the JV’s performance, reporting that “online revenues grew strongly throughout the quarter and the Group is excited about the outlook for 2020 and beyond.”
City analyst firm Regulus Partners said in a note: “Roar has yet to materially move the needle in terms of market share in any of the major US sports betting markets and this is the only true barometer of ‘good progress’ in our view.
“While GVC’s ability to improve underperforming assets or capture growth across a wide number of geographies has been impressive, the challenges of the US are in many respects distinct: not least the appetite of a critical mass of operators to lose large sums of money in a landgrab of uncertain end value,” the note said.
However, Peel Hunt said the JV was seeing its New Jersey revenues “inching up”, despite the firm not “burning through eye-catching amounts of money to grab market share.”
GVC CEO Kenny Alexander set Roar a target to gain 10-15% market share (behind FanDuel’s 50% and DraftKings’ 30%) in New Jersey by April 2020.
However, Numis Securities estimates its share of the digital market in the Garden State is still in single figures.
Roar’s BetMGM betting product sits on Borgata’s license, which reported the fifth-largest online wagering revenue in December ($995,096), behind Meadowlands ($12m), Resorts ($9.3m), Monmouth Park ($1.9m) and Ocean Resort ($1.2m).
Borgata came in fifth overall in 2019, recording $10.5m in revenues (including retail).
Roar Digital recently signed a landmark media partnership with Yahoo Sports to gain access to its 60 million monthly fantasy sports users.