Jack On Hold

How to play Jack On Hold

“Publicly traded valuations are a reflection of the current interest rate environment,” Chad Beynon, lead gaming analyst for Macquarie, told iGB. “Whether it’s a long-term financial model on a growth company, you’re going to discount that back at a higher rate, or if it’s just a standard four-wall business, the cash flows in a higher interest rate environment are worth less.”

According to data from Yahoo Finance, the resort and casino sector is -41% over the last five years, and the overall gambling sector, which includes major sportsbooks and online operators, is +7%; the benchmark S&P 500 index, by comparison, is +71% during that span.

Two blockbuster developments in the casino space earlier this year seemed to indicate an increasingly bullish bet on the sector, including Fertitta Entertainment’s acquisition of Caesars Entertainment in May. The other is a subsequent takeover offer of MGM Resorts from its largest shareholder, Barry Diller’s People Inc. But a negative shift in market conditions could affect both deals.

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All submissions must also now include an exit plan – a new obligation that applies across the board. This requirement, intended to ensure orderly market withdrawal, marked a move toward embedding long-term risk management into the licensing process.

It requires operators to describe in detail how they will responsibly wind down their operations should their licence not be renewed or be revoked. Or if they decide to leave the market midway through the five years between renewals.

The regulator noted that several operators received “additional points for attention”, indicating that while these applicants met minimum legal thresholds, the KSA expected continuous improvements in compliance practices.

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The committee also suggested a ban on inducements (free bets, sign-up bonuses) as these promotions stimulate betting activity and recruit new or lapsed customers.

Another point of contention was content marketing and influencer promotions. The Lords committee advised treating this as advertising and, if a full ban were not immediately feasible, prioritising its prohibition.

Sponsorships and advertising with sports teams was also flagged as according to the report, voluntary efforts had failed to reduce the industry’s exposure.