The New Year is fast approaching and it is time for the gaming industry to reflect on the past year. Headlines included further sports betting expansion into new states, major acquisitions, and even a company-wide ransomware attack or two.
For some, the year offered a chance for redemption after a tumultuous 2022, while others went from hero to zero in just 12 months. With the year almost over, it’s time to separate the winners from the losers.
Using the stock prices of US gaming giants, including operators and suppliers, VegasSlotsOnline news has compiled a list of the losers of 2023. From Wynn Resorts International to Entain, these companies all had a year to forget.
5. Wynn Resorts International
January share price: $85.61
Share price in December: $82.68
Decline: 3%
While a 3% drop in share price isn’t too bad compared to our other losers, it was a year to forget for Wynn Resorts International for several reasons.
First, the casino operator’s sports betting division, WynnBET, was one of the latest casualties in the US marketing war. Wynn announced the closure of its online sports betting operations in eight states in August this year, including Arizona, Colorado, Louisiana, New Jersey and others. Sportsbooks in Massachusetts and Nevada will remain in place due to land-based operations in those states. In an argument that has now become common among closed US sportsbooks, Wynn blamed the cost of user acquisition.
The sexual abuse case against its former CEO Steve Wynn has reared its ugly head again
Wynn has also often found himself in the press for the wrong reasons. The sexual abuse case against its former CEO Steve Wynn reared its ugly head again when he agreed to pay a $10 million settlement to cut ties with the Nevada gambling industry. Wynn’s lawyers also confirmed in September that a settlement had been reached with the nine women who allege the company permitted the abuse.
Two more lawsuits capped Wynn’s terrible year. In April, a slot attendant sought more than $15,000 in compensatory damages, lost tips and punitive damages. She claimed she was illegally forced to share her tips with managers. Recently, a family sued Wynn Las Vegas last week, alleging that employees failed to prevent the deaths of their relatives while they were gambling at the casino.
4. 888 stocks
January share price: £93.65
December share price: £83
Decline: 11%
888 Holdings has dominated VSO News’ headlines over the past 12 months, and not for the right reasons. This has contributed to the British company’s share price falling 11% over the year.
888’s problems began right at the beginning of the year. From March 2022 to March 2023, shares fell a staggering 72%, including 48% in the first three months of this year alone. In fact, they fell so much that the company lost its place in the London Stock Exchange’s FTSE 250 index, a list that includes the 250 mid-cap companies based in the UK.
The issuances began in September 2021, when 888 secured UK-based sports betting operator William Hill’s assets outside the US for 2.9 billion pounds ($3.47 billion). This proved to be a misguided acquisition as 888 completed the acquisition with money the company did not have. The group said it would have to take on $1.76 billion ($2.16 billion) in debt. This debt remains significant despite 888’s best efforts to reduce it.
The company also ran into difficulties in January in connection with its VIP activities in the Middle East. An investigation found that the company did not follow best practices for anti-money laundering and know-your-customer systems. Subsequently, CEO Itai Pazner resigned from his position with immediate effect after serving the company for two decades, including four decades as boss.
As if all that wasn’t bad enough, in March the UK Gambling Commission fined 888 company William Hill a record 19.2 million pounds ($23.6 million).
Considering all of this, the 11% drop in the share price in 2023 isn’t all that dramatic. The stock recovered significantly in April before gradually falling again.
3. Penn Entertainment
January share price: $30.32
Share price in December: $24.90
Decline: 18%
Penn Entertainment seems to be a staple on our losers lists. The company secured the top spot in 2021 when its shares fell 45% for the year, and took third place last year when its share price plunged 34%. Good news for Penn executives is that the company is improving year-over-year, with its shares only falling 18% in 2023 – although that puts it back in third place.
Penn couldn’t wait to offload Barstool back to Portnoy
The most notable part of Penn’s year came in August 2023, when the company finally folded Barstool Sports and its controversial owner Dave Portnoy. It was such a failed venture that Penn couldn’t wait to sell Barstool back to Portnoy. The latter paid just $1 to buy back 100% of Barstool shares. To put that in perspective, Penn paid $551 million for Barstool in multiple payments.
What was the reason for such a loss? Some of the blame lies with Portnoy, who, unlike a traditional gaming brand like Penn, continues to stir up controversy. Business Insider And New York Times The posts brought to light a series of sexual abuse allegations from more than two dozen women. The allegations resulted in a loss of approximately $2.5 billion in market value for Penn.
Meanwhile, Barstool’s sales were hit by a lack of access to key markets. This was undoubtedly linked to connections with Portnoy, who admitted on X that the company was “denied licenses because of me”. He added: “The regulated industry is probably not the best place for Barstool Sports and the type of content we create.”
Given Barstool’s disastrous failure, Penn’s 18% share price decline doesn’t seem too bad. That’s because the company has a new sports betting venture backed by ESPN, a Disney corporation. The company signed a 10-year deal with Penn in August that includes a $2 billion payment over the term.
2. Bally’s Corporation
January share price: $19.48
Share price in December: $12.37
Decline: 36%
Looking at Bally’s Corporation’s most recent quarterly results, you might mistakenly think that the company’s stock is booming. The company reported record companywide revenue of $632.5 million, up 9% year-over-year, including record casino revenue of $359 million, also up 9%. While the company continues to thrive in the land-based space, the company has struggled elsewhere.
a staggering net loss of $428 million from its North American online arm in 2022
In January, the company announced it would have to cut 15% of its online division’s workforce after a nightmare year for Bally’s Interactive. The following month, Bally’s announced that it was seeking buyers for its online brand Monkey Knife Fight (MKF) as part of restructuring efforts. The move came after a staggering $428 million net loss from its North American online arm in 2022.
Bally’s purchased MKF in 2021 for $90 million, hoping it would be a key part of its online expansion. Ultimately, the company had to shut down the platform this year after failing to find a buyer. With this failure came a significant loss of investor confidence, with Bally’s share price falling as low as $8.65 in October this year, a 56% decline from January.
Fortunately for Bally’s and its loyal investors, the last two months have brought an uptick in this stock. This was most likely boosted by its promising third quarter results and the opening of its temporary casino in Chicago. However, even this Chicago project remains in limbo due to an investigation into the issuance of the company’s casino license.
1. Included
January share price: £1,415
December share price: £825.26
Decline: 42%
Entain finally takes first place on our 2023 losers list. The company’s share price has fallen an incredible 42% this year. This all came to a head earlier this month when CEO Jette Nygaard-Andersen resigned after investors expressed their feelings about her leadership. The share price rose 5% following the announcement.
His Majesty’s Revenue and Customs found GVC in breach of the Bribery Act 2010
Her tenure has been turbulent, particularly in the last 12 months, including a bribery scandal that cost the company millions of pounds. Entain agreed in November to pay 585 million pounds ($743 million) for historic violations in Turkey under its now-renamed GVC business. His Majesty’s Revenue and Customs found GVC in breach of the Bribery Act 2010.
The new British laws for safer gambling have also not been kind to the owner of Ladbrokes and Coral. Entain took a 1 billion pound ($1.2 billion) hit to its market valuation in September, a loss the company attributed to “weaker than expected” revenue. The new laws dictated in the Gambling Reform White Paper are not yet officially in force, but Entain enacted them early and suffered a £110 million ($134 million) drop in revenue as a result.
To make matters worse, Entain now has more competition than ever in the UK market thanks to one of its partners. MGM Resorts International launched BetMGM in the UK in August. BetMGM UK operates under the LeoVegas brand and is now in direct competition with Ladbrokes and Coral.
Entain is the fourth worst performing company in terms of total shareholder return in the FTSE 100 in recent years. Despite all this, the company remains steadfast and has rejected two takeover offers from DraftKings and MGM.
Perhaps a leadership change could give Entain a rosier outlook for 2024 following Nygaard-Andersen’s retirement. Be that as it may, the next 12 months will prove crucial.
