Entain PLC · LSE:ENT
Entain — BetMGM — Investor Day (April 2021)
44 slides from Entain's investor day presentation, Apr 21, 2021
Slide 1: Investor Day
io) BETMGM Investor Day APRIL 21, 2021
Slide 2: Disclaimer
Disclaimer Cautionary Statements Concerning Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve substantial risks and/or uncertainties, including those described in the MGM Resorts
Slide 3: BetMGM is a winning combination of two industry leaders
BetMGM is a winning combination of two industry leaders Proprietary retail and online technology 35+ million platform supported by member database 2,000+ developers Iconic brands Leading global with 31 hotel online operator and gaming with over 50 destinations licenses in 27 across the globe jurisdi
Slide 4: BetMGM: Believe in your game
BETMGM BELIEVE IN YOUR GAME
Slide 5: Agenda – Adam Greenblatt, CEO
Agenda Adam Greenblatt Chief Executive Officer Business and • Market Overview Deep experience in omni-channel gaming and sports betting from both sides of the Atlantic Product • Previously Director of Corporate Development and Strategy at Entain, Ladbrokes Coral and Marketing Ladbrokes • Former merg
Slide 6: Executive Summary
Executive Summary $163M $1B+ 22% Estimated Q1 Forecasted 2022 February market share across 2021 net revenue1 net revenue1 all active jurisdictions2 $32B 20-25% 30-35% Long-term total Expected long-term Expected long-term addressable market (TAM)3 U.S. market share EBITDA margin1 1 Net revenues and p
Slide 7: We have created a sustainable competitive advantage
We have created a sustainable competitive advantage National Market Access Leading Product • Market access currently and Technology secured or anticipated in Efficient Player 24 jurisdictions1 • Fully-featured Acquisition and Retention • Relationship with MGM proprietary tech-stack Responsible Gambl
Slide 8: Built by a highly-experienced team
Built by a highly-experienced team CRO Matt Prevost CFO Gary Deutsch 500+ Employees VP Trading Jason Scott COO Ryan Spoon VP Gaming Matt Sunderland CEO CTO Adam Greenblatt Liron Snir Broad experience VP Strategy & across gaming, Development technology and media Witek Wacinski CPO Jarrod Schwarz VP C
Slide 9: Massive long-term North American opportunity
Massive long-term North American opportunity Total Long-Term Addressable Market U.S. • ~65% of the adult population OSB • Average GGR per adult of ~$90 Canada $4.4B U.S. • ~35% of the adult population $32B iGaming U.S. • Average GGR per adult ~$160 OSB North American TAM $14.1B U.S. iGaming $13.4B •
Slide 10: Secured broad market access
Secured broad market access 12 20 Active Expected live jurisdictions jurisdictions in next 12 months 40% 24 Population with Market access expected access in secured or Live next 12 months1 anticipated2 Market Access Secured or Anticipated2 Current or Future Retail Location3 1 Approximate U.S. adult
Slide 11: Proven ability to win in different types of markets
Proven ability to win in different types of markets Michigan Colorado New Jersey Market Position1 #1 #1 #1 OSB, iGaming, Retail OSB (est.) iGaming Products OSB Gaming Poker OSB OSB Gaming Poker Day-1 Launch Omni- channel Local Partnerships 1 Based on market share for products listed for last 3 month
Slide 12: Poised to sustain rapid growth
Poised to sustain rapid growth Monthly Gross Gaming Revenue (GGR) ✓ Proven ability to launch on day 1 +400% 1 ✓ Platform built to deliver rapid market rollout ✓ Top 3 in U.S. OSB2 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 ✓ #1 in U.S. iGaming2 State Launches WV NV MI CO OR TN PA IA IN VA
Slide 13: Positioned to be a long-term market leader
Positioned to be a long-term market leader Overall Estimated National Market Share1 35% 30% Competitor 1 25% BetMGM 20% Competitor 2 15% 10% Competitor 3 Competitor 4 5% 0% Jan 2020 Feb 2020 Mar 2020 Apr 2020 May 2020 Jun 2020 Jul 2020 Aug 2020 Sep 2020 Oct 2020 Nov 2020 Dec 2020 Jan 2021 Feb 2021 1
Slide 14: Agenda – Ryan Spoon, COO
Agenda Ryan Spoon Chief Operating Officer Business and • Market Overview Deep product and technology experience across the digital sports and media industries Product • Most recently served in various senior leadership roles at ESPN, including SVP of Marketing Social & Digital Content and SVP of Dig
Slide 15: Technology enables exceptional user experience
Technology enables exceptional user experience Customer Channels Product Principles Sports Betting Simplicity Enabled by our Casino Speed LEADING GLOBAL & PROPRIETARY Retail & Omni Live TECHNOLOGY Loyalty & Rewards Personalization 15
Slide 16: Proprietary tech-stack provides competitive advantage
Proprietary tech-stack provides competitive advantage Multi-Brand Competitive Advantages ✓ Multi-brand capabilities Omni-Channel ✓ Seamless omni-channel offering Mobile POS Desktop Kiosk ✓ Best-in-class integrations API Services ✓ Robust player analytics ✓ Superior operating flexibility Sportsbook C
Slide 17: The King of Sportsbooks
The King of Sportsbooks 2M+ Sports bets per day made through Entain platforms worldwide 43% Of total handle comes from in-play bets 116% Quarterly growth in parlay bets 33% Of NV retail bets placed at kiosks Player-centric platform optimizes the user experience All data for Q1 2021; quarterly growth
Slide 18: The market leader in iGaming
The market leader in iGaming #1 Market leader in U.S. iGaming market1 674 Unique slot, table, and instant win games 71% Of iGaming players played in-house games2 15% iGaming GGR from Live Dealer games3 Depth and exclusivity of content creates a competitive moat 1 Measured by GGR for the L3M period e
Slide 19: More on the horizon
More on the horizon 1 Denotes ranking improvement in Eilers & Krejcik March 2021 U.S. Sports Betting App Rankings 19
Slide 20: More on the horizon
®) |BETMGM ©) | HORSE RACING ||" "3 BETMGM Re) | HORSE . Z . POKER BINGO RACING IN-PLAY LIVE DEALER BETMGM
Slide 21: More on the horizon
MAKE ANOTHER DEPOSIT ‘Top Events Baseball Gacketbl © Baseball UNIFIED WALLET MODULAR PERSONALIZATION MARKETING PARTNERS BetMGM Sportsbook What'snew * About this game ANDROID BETMGM
Slide 22: Agenda – Matt Prevost, CRO
Agenda Matt Prevost Chief Revenue Officer Business and • Market Overview Unique combination of brand leadership experience and expertise in Europe’s most competitive betting environment, with a deep Product understanding of the U.S. and U.K. consumer and media landscape Marketing • Previously served
Slide 23: Pillars of our marketing strategy
Pillars of our marketing strategy 1 Brand 2 Omni-Channel 3 Personalization 4 Integrated Partnerships BI ENGINE Strategy leverages our competitive differentiation and technological superiority to maximize ROI across all channels 23
Slide 24: 1. The leading sports betting and gaming brand
1. The leading sports betting and gaming brand 84% National MGM brand awareness1 75% 75% of OSB players have also engaged in iGaming2 15 Retail sportsbooks nationwide, and growing $250 Long-term CPA target Our brand resonates with both sports and iGaming players 1 Brand awareness for MGM Resorts Int
Slide 25: 2. Omni-channel starts with full loyalty integration
2. Omni-channel starts with full loyalty integration 35 million+ 24 World class hotel and 18% 100% M life Rewards Members gaming destinations in the U.S. with loyalty Of FTDs in 2020 were of BetMGM players integration active with MGM1 BEST LOYALTY PROGRAM enrolled in M life Global Gaming Awards in 6
Slide 26: 2. Competitive differentiation through on-property experiences
2. Competitive differentiation through on-property experiences 42.5M Annual visitors to Las Vegas1 15.2M Available room nights annually at MGM U.S. properties2,3 9,000+ Publicly ticketed live events held annually at MGM properties2 8,500+ On-property March Madness registrations Brick-and-mortar pres
Slide 27: 2. The omni-channel advantage
2. The omni-channel advantage Non-MGM Sourced MGM Sourced1 Est. Normalized Avg. Marketing ROI is 5.4x 157% higher for MGM- sourced players2 100% 100% Value of omni- channel will increase post-COVID 28% CPA GGR 1 MGM Sourced players include on-site registrations and other directly attributable market
Slide 28: 3. Utilizing customization to maximize player value
3. Utilizing customization to maximize player value Personalized marketing with dynamic elements results in 75% higher engagement1 Dynamic item based on offer Personalized items based on behavior / value Personalized items based on behavior / value 1 Measured by click-through rate 28
Slide 29: 3. Personalization enhances acquisition and retention
3. Personalization enhances acquisition and retention Acquisition Retention Right Offer. Right Segment. Right Time. 29
Slide 30: 3. Personalization, a player experience
3. Personalization, a player experience Joe bet on the Yankees in Joe watched the game Joe is sent key game Joe celebrates his team their last game. An hour live. The Yankees went information throughout, winning the game. 2 out before the game, he received ahead early and Joe’s linking to in-play be
Slide 31: 4. Integrated partnerships enhance and extend brand awareness
4. Integrated partnerships enhance and extend brand awareness Media and Retail 28% National of all acquisition from Partnerships & Affiliates1 1,000+ Regional days of unique player experiences 1 Percentage of total FTDs from partnerships and affiliates for Q1 2021 31
Slide 32: 4. Continually expanding Yahoo integration
4. Continually expanding Yahoo integration Seamless player journey SSO Capabilities Yahoo Betting- Sports focused reaches articles #1 BetMGM ~70 million received referral fans per ~220m partner month views in 2020 Yahoo FTDs per Month 2020 2021 32
Slide 33: 4. Continually expanding Yahoo integration
4. Continually expanding Yahoo integration Integrated Content Direct Link Yahoo Betting- Sports focused reaches articles #1 BetMGM ~70 million received referral fans per ~220m partner month views in 2020 Yahoo FTDs per Month 2020 2021 33
Slide 34: BI engine enables rapid improvement in player metrics
BI engine enables rapid improvement in player metrics Acquisition Conversion Retention Business • Predictive analysis pROI • Pinpoint drop off within • Personalization of Intelligence calculated within 7, 14, 21 conversion funnel experience across player Enablers days • Reactive responses and lifecy
Slide 35: Agenda – Gary Deutsch, CFO
Agenda Gary Deutsch Chief Financial Officer Business and • Market Overview Strong understanding of early-stage venture capital and private equity–backed startups Marketing • Most recently CFO and EVP Corporate Development at New York–based marketing Product services company, LiveIntent • Formerly se
Slide 36: Financial highlights
Financial highlights $163M $1B+ $450M Est. Q1 2021 FY 2022 Expected Net Revenue1 Forecasted Net Capital Consumed in Revenue1 20212 Up 114% versus Q4’20 and Driven by continued growth 2021 highest planned nearly 90% of full year in current jurisdictions plus annual cash usage; $210M 2020 revenue key
Slide 37: Path to state-level profitability
Path to state-level profitability 4. Growing Annuity Steady base of real-money 3. Cumulative players yields long-term cash Payback flow Cumulative profit from all 2. Contribution cohorts exceeds upfront Breakeven market access and cumulative acquisition costs Cash flow from maturing of all cohorts c
Slide 38: 1. Acquisition
1. Acquisition Key determinants of player acquisition cost: Illustrative Cohort Analysis • Omni-presence The majority of churn Churn stabilizes while happens quickly player values continue to grow • Entry at market launch Player Value1 • Multiple products for cross-sell Digital Sports Q1 2021 TN CPA
Slide 39: 2. Contribution breakeven
2. Contribution breakeven Key determinants of contribution breakeven: Illustrative State Breakeven • State Tax Rates Overall • Market Access Revenue Shares Contribution • Market-specific Player Values Individual Cohorts Profitability VA NGR per player already hit highest of Time all digital states i
Slide 40: 3. Cumulative Payback
3. Cumulative Payback Key determinants of cumulative payback: NJ NGR and Contribution1 2018/19 cohort 2020 cohort 2021 cohort 2022 cohort • Upfront Market Access or Licensing Costs • Player CPAs $203 • State-specific cost & player economics $114 $60 $41 NJ expected to achieve full payback in Q3 2021
Slide 41: 4. Growing annuity
4. Growing annuity Key determinants of annuity value: Player Value1 • Loyalty & Retention Marketing NGR Player Retention +14% 96% • Customer Service • Product Experience Q4'20 Q1'21 Q4'20 Q1'21 NJ NGR per active for players active in Q1 2020 grew by 147% in Q1 2021 for that same group of players2 NG
Slide 42: Long-term profit outlook
Long-term profit outlook Long-term Margin Target1 Structural Cost 100% Advantages ✓ Omni-channel reduces marketing spend, increases retention and 57-60% increases player value ✓ In-house tech significantly cheaper 30-35% ✓ Revenue share lower due to MGM market access ✓ Scale supports national advert
Slide 43: Conclusion
Conclusion $32B long-term North American market opportunity1 Sustainable competitive advantage through proprietary technology, product, loyalty and omni-channel 20-25% expected long-term U.S. market share Advantaged cost structure with 30-35% expected long-term EBITDA margin at scale2 $1B+ forecaste
Slide 44: Q&A
To ask a question, please connect via the live audio dial-in details below: US: +1 (833) 562-0152 Q&A UK: +44 (0) 20 3107 0289 International: +1 (661) 567-1234 Conference ID: 3511619