The New Year is fast approaching and it’s time for the gambling industry to reflect on the one that’s been. The headlines have included more sports betting expansion into new states, major acquisitions, and even a companywide ransomware attack or two.
For some, the year has provided a chance for redemption after a turbulent 2022, while others have gone from hero to zero in the space of just 12 months. Now that the year is almost over, it’s time to sort the winners from the losers.
Utilizing the stock prices of the US’s gaming giants, including operators and suppliers, VegasSlotsOnline News has compiled a list of the losers of 2023. From Wynn Resorts International to Entain, all of these companies have had a year to forget.
5. Wynn Resorts International
January share price: $85.61
December share price: $82.68
Decrease: 3%
While a 3% decrease in share price isn’t too bad in comparison to our other losers, it’s been a year to forget for Wynn Resorts International for several reasons.
Firstly, the casino operator’s sports betting arm, WynnBET, was one of the latest casualties in the US marketing war of attrition. Wynn announced the shutdown of its online sportsbooks in August this year across eight states, including Arizona, Colorado, Louisiana, New Jersey, and others. Its Massachusetts and Nevada sportsbooks remain in action due to land-based operations in these states. In reasoning that has now become common among closed US sportsbooks, Wynn blamed user acquisition costs.
The sex abuse case against its former CEO Steve Wynn reared its ugly head once again
Wynn has also found itself in the press many times for all the wrong reasons. The sex abuse case against its former CEO Steve Wynn reared its ugly head once again as he agreed to pay a $10m settlement to cut ties with Nevada’s gaming industry. Attorneys for Wynn also confirmed in September that a settlement had been reached with the nine women who claim the company allowed the abuse to occur.
Two other lawsuits have put the cherry on the cake for Wynn’s terrible year. In April, a slot attendant sought damages in excess of $15,000, lost tips, and punitive damages. She claimed that she was illegally forced to share her tips with managers. More recently, a family sued Wynn Las Vegas last week claiming that employees failed to prevent the death of their relative while she played in the casino.
4. 888 Holdings
January share price: £93.65
December share price: £83
Decrease: 11%
888 Holdings has littered the VSO News headlines over the past 12 months, and not for the right reasons. It has contributed to an 11% drop in share price over the year for the UK company.
888’s trouble began right at the beginning of the year. From March 2022 to March 2023, shares dropped a staggering 72%, including 48% in just the first three months of this year. In fact, they sank so much that the company lost its place in the FTSE 250 index for the London Stock Exchange, a list that comprises the 250 UK-based mid-market cap companies.
The issues began in September 2021 when 888 secured the non-US assets of UK-based sportsbook operator William Hill for £2.9bn ($3.47bn). This turned out to be a misguided acquisition given that 888 completed the buyout with money it didn’t have. The group announced it would have to enter into $1.76bn ($2.16bn) worth of debt. That debt remains substantial despite 888’s best efforts to reduce it.
The company also found itself in hot water in January regarding its VIP operations in the Middle East. A probe revealed the firm did not follow best practices concerning anti-money laundering and know-your-customer systems. Subsequently, CEO Itai Pazner stepped down from his role with immediate effect after serving the company for two decades, four of which he spent as the boss.
As if all this wasn’t bad enough, the UK Gambling Commission hit 888-owned William Hill with a record £19.2m ($23.6m) fine in March.
Considering all of this, the 11% decrease in share price for 2023 isn’t too dramatic. The stock made a substantial recovery in April before decreasing gradually once more.
3. Penn Entertainment
January share price: $30.32
December share price: $24.90
Decrease: 18%
Penn Entertainment seems to be a regular feature on our losers lists. The company secured the top spot in 2021 when its stock declined 45% for the year and took third last year as its share price tanked 34%. In good news for Penn execs, the company is improving year-on-year, with its stock dropping just 18% in 2023 – although that does make it third once more.
Penn couldn’t wait to offload Barstool back to Portnoy
The most notable part of Penn’s year came in August 2023 when it finally gave up on Barstool Sports and its controversial owner Dave Portnoy. It had proven such a failed venture that Penn couldn’t wait to offload Barstool back to Portnoy, the latter paying just $1 to buy back 100% of Barstool shares. To put that into perspective, Penn paid $551m for Barstool through multiple payments.
What was the reason for such a loss? The blame lay partly on Portnoy who continues to court controversy, at odds with a traditional gaming brand such as Penn. Business Insider and New York Times pieces brought to light a string of sexual abuse allegations from more than two dozen women. The allegations wiped some $2.5bn in market value off Penn at the time.
Meanwhile, revenue from Barstool was hindered by a lack of access in key markets. This was undoubtedly tied to the links to Portnoy, who admitted on X that the company “got 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 make.”
Considering the cataclysmic failure of Barstool, Penn’s 18% share price drop might not seem too bad. That’s because the company has a new sports betting venture, and this one is backed by Disney-owned ESPN. The company signed a ten-year deal with Penn in August, which includes a $2bn payment over the term.
2. Bally’s Corporation
January share price: $19.48
December share price: $12.37
Decrease: 36%
Looking at Bally’s Corporation’s last quarterly results you could be mistaken for thinking the company stock must be booming. The firm saw record company-wide revenue of $632.5m, up 9% year-on-year, including record casino revenue of $359m, also up 9%. However, while it continues to perform in the land-based space, the company has had issues elsewhere.
a staggering net loss of $428m through 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 it was seeking buyers for its online Monkey Knife Fight (MKF) brand as part of restructuring efforts. The move came following a staggering net loss of $428m through its North American online arm in 2022.
Bally’s bought MKF for $90m in 2021 hoping it would form a key part of its online expansion. It ultimately had to shutter the platform this year after failing to get a buyer. With that failure came a significant loss in investor faith, Bally’s share price dropping to as low as $8.65 in October this year, a 56% decline from January.
Thankfully for Bally’s and its faithful investors, the past two months have brought an uptick in that stock. This was most likely buoyed by promising Q3 results and the opening of its temporary Chicago casino. However, even this Chicago project remains up in the air thanks to a probe into the issuance of the company’s casino license.
1. Entain
January share price: £1,415
December share price: £825.26
Decrease: 42%
Finally, taking the top spot on our 2023 losers list… it’s Entain. The company’s share price has dropped a staggering 42% this year. This all came to a head earlier this month when CEO Jette Nygaard-Andersen resigned after investors made their feelings known regarding her leadership. The share price jumped 5% following the announcement.
His Majesty’s Revenue and Customs determined that GVC breached the Bribery Act of 2010
Her period in charge was a turbulent one, certainly for the past 12 months, including a bribery scandal that cost the company millions of pounds. Entain agreed to pay £585m ($743m) in November for historical violations in Turkey under its since-rebranded GVC business. His Majesty’s Revenue and Customs determined that GVC breached the Bribery Act of 2010.
New UK safer gambling laws have also not been kind to the Ladbrokes and Coral owner. Entain saw £1bn ($1.2bn) wiped off its market valuation in September, a loss that the company blamed on revenue that was “softer than expected.” The new laws dictated by the white paper on gambling reform are not officially in place yet, but Entain enacted them early and took a £110m ($134m) revenue hit as a result.
To make matters even 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. Operating through the LeoVegas brand, BetMGM UK is now in direct competition with Ladbrokes and Coral.
Entain is the fourth worst-performing company in terms of total shareholder returns in the FTSE 100 over the past couple of years. Despite all of this, the company is holding strong and has rejected two takeover offers from DraftKings and MGM.
Perhaps a change in leadership could give Entain a rosier outlook headed into 2024 following the resignation of Nygaard-Andersen. Whatever the case, the next 12 months will prove vital.