1. ANALYZING THE IGT ASSETS ON THE BLOCK

• Does anyone want the sports? With an increasingly small TAM for B2B sports in the U.S. it's hard to see it as a viable takeout target as a standalone business. Per our partnerships tracker, IGT’s U.S. sports partners include: Circa, Maverick Sports, SuperBook, Betly and Sportsbook Rhode Island.   
• Could one of those existing clients move to take it in-house? Unlikely. A buyer is more likely to come from the other side of the Atlantic, where partners include LNB (Belgium), OPAP (Greece), and Lottomatica (Italy).
• Online casino the jewel. The online casino arm is a significantly more attractive asset in our view, with IGT games accounting for 17.4% of U.S online casino GGR, per the EKG Online Game Performance Database. That’s behind only Evolution (and its near-monopoly on live casino) and ahead of Light&Wonder in third place at 16.2% share.
• Relationships. Beyond those revenues, an acquirer also gains valuable US casino IP and deep relationships with casino groups.
• Who could buy it? Evolution looks a logical option for the online casino assets in our view, as it builds its non live-casino content in the U.S. beyond its existing NetEnt portfolio. 

3. WHAT DOES THE NEXT PHASE OF U.S. OSB LOOK LIKE?

1. Novel integrations. Think B2C meets D2C. Early versions of this dynamic have included BetMGM-Buffalo Wild Wings and PointsBet-Topgolf. Digitally native brands like FanDuel could differentiate by offering sports tourism-based integrations with hotel chains. Such integrations could position digital brands to (better) compete with U.S. land-based casinos, which haven’t really begun to harness their omni-channel potential.
2. Disruptive product. U.S. market OSB product is somewhat homogenous, with most operators doing a version of the same thing. The focus is mainly how to slice, dice, and repackage parlays. Adam Greenblatt said as much recently. But I’m intrigued by casual product variants that mostly exist in the fantasy sports space. In the U.S. OSB market, nobody has yet stepped into—let alone claimed—this non-intimidating lane.
3. More sports, more eyeballs. The U.S. is one of the world’s most exciting growth markets for sport. Lionel Messi’s move to Inter Miami CF could have a significant positive impact on Major League Soccer betting volumes and, longer term, a transformational impact on soccer fandom levels in the U.S. I’m also excited by Formula 1's push into the U.S. market (admittedly, the Netflix F1 show Drive To Survive hooked me)—and especially by the myriad betting-racing mash-up possibilities that exist in Las Vegas.
4. Paradigm shift in CS. My wife and I buy our pet food from a company called Chewy. In short, Chewy’s customer service—which includes hand-written notes and gratis paintings of your pets (seriously!)—is phenomenal and has gone viral over and over because of how thoughtful it is. I have yet to see a U.S. OSB operator have a viral moment in response to its thoughtful, outside-of-box customer service.
5. Expect the unexpected. Despite the U.S. OSB market having the appearance of a settled affair (e.g., FanDuel and DraftKings Inc. consistently controlling a steadily expanding TAM), it … is so not that. The combination of transformational M&A, unlooked-for market entrants, disruptive product, and policy change—among other factors—could and likely will reshape the playing field in surprising ways.