Stock Watch: Everi Holdings (EVRI)

Everi Holdings Inc.
Symbol: EVRI
Current Price: $3.19 USD / $4.17 CAD
Recommendation: BUY

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Most gamblers will not recognize the name Everi. Heck, most of you reading this will be hearing about Everi for the first time. I was not familiar with the company until getting involved in the regulated Canadian casino market just a short time ago. So as you continue to read, you will likely have as much as an eye opening experience as I did when I found out about Everi and did more research into the company.

Everi has two big claims to fame.

One is the fact that their software controls the New York Lottery VLT’s. Two is their TRK redemption kiosks.

Point one is quite self explanatory, but, for those of you who do not know, TRK stands for Ticket Redemption Kiosk. If you have ever been inside of a casino, I am sure you have seen giant ATM machines which accept slot machine vouchers and turn them into cash. This is a product that Everi has developed and mastered over the years. Their Kiosk system allows casinos to offer a premium experience to their guests, cutting out the wait in line at the window and providing instant cash. In recent years, Everi has also developed a instant cash call, or cash advance station which accepts credit and debit cards. Rather than relying on a cashier to carry out the cash call or withdrawal process at the window for a large fee, Everi offers a self serve solution for casinos.

Incredibly, Everi has developed into one of the major players in the industry today dealing more than $20B in transactions lat year and a running annual average of 85M transactions per year through their terminals and kiosks.

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As I mentioned in my last Stock Watch article on Amaya Inc, one of the things I like to look for when investing in a company is market share and staying power. I like to invest in companies that are not going to disappear tomorrow. With such a staggering volume of transactions inside casinos in Canada and the United States, too many casinos rely on Everi for this company to go away.

The self serve and kiosk side of the business is a security clause for me when buying shares. The upside I feel in Everi comes with their machines. After mastering the payment side of the business, Everi began developing slot machines. Not only have they created beautiful cabinets, they have created a fantastic set of games as well. Their multiple touch screen panels offer interactive games which feel more like a video game than they do a typical slot machine. Their “Smokin’ Hot Dice” and “Peking Fantasy” are two of my personal favourites. Their MPX cabinet and screens really stand out on the casino floor.

Everi as I mentioned is a systems first company, and what they have done with their “Tournevent” system is brilliant. Already with traction in hundreds of casinos, their “Tournevent of Champions” is a slot league that runs internationally between March and July of 2017. It is a bracket style format promoted within different casinos that see patrons play off in 2 minute intervals in 8 man leagues. The winners advance until there is a winner at each participating casino. All casino winners get flown to Las Vegas for a chance to play for $1M in cash at Everi’s big finale.

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The system that Everi runs is so easy to use and so flawless, it is a product that casinos are going to have to introduce inside their locations if their competitors begin to offer it. I was blown away by how much fun slot players have in these tournament settings, and no company offers a more flawless integration than Everi. This year their casino registration numbers continued to climb, and as the event continues to get more and more press, the future becomes brighter and brighter for Everi. Couple this in with the fact that many jurisdictions in the United States are beginning to introduce casino betting, Everi is naturally in line to secure a number of deals. The most recent deal in the works is to do with the $2.5B development plan around Atlanta.

Everi had a very poor year in 2016, which has to do with their low share price today. A lot of big steps were made in that year, none more notable than the hiring of Michael Rumbolz as CEO. Rumbolz has over 35 years experience in the gaming industry and has worked with some big names. I like Rumbolz because of his time with ACME Gaming, which gives him a strong technical systems background when it comes to the machines, something that is showing through already in Everi’s products and vision. His time spent as the Director of Hard Rock Cafe likely gives him a very helpful rolodex in this space. It also explains the strong presence for Everi in HR locations as well as the event style approach to gaming Everi has developed.

It was no less than 2 years ago that the share price of Everi was up north of $9. With it sitting low at $3 right now, it is hard not to see the upside. Everi has such a strong market share with little risk in their self serve business. The biggest state lottery in the US depends on them and their new CEO has 35 years of connections and experience in the space. This stock has been trending up for a couple months now and with a good Q4 report in 2016 coupled by a big Tournevent of Champions this summer, Everi could get to that $4 mark and beyond quite quickly.

Stock Watch: Amaya Inc. (AYA)

Amaya Inc.
Symbol: AYA
Current Price: $14.65 USD / $19.08 CAD
Recommendation: BUY

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I have had a few chances to meet with David Baazov through a business partner of mine who has done work with him for many years now. I have sat in on meetings and attended events where he was at. I don’t particularly like the guy, and I am not alone in sharing that sentiment. The feeling is not jealousy, although, I wouldn’t mind changing my net worth for his, but rather, the feeling is more of a dislike of his disconnect.

Baazov works about as hard and as often as anyone I have ever met in my entire life. His pursuit of perfection is relentless. No doubt, his drive and ambition has led him to do some questionable things, but from a business perspective, everything he has done up to this time and now has been, well, brilliant. But it is difficult to have a connection with someone in the same industry as you even be it for just a couple minutes, when the person simply is always thinking about something else, thinking about what is next. But, at the end of the day, this is the world of financial trading and feelings get left at the door. When buying shares in a company the most important thing to do is believe in the person running the company, and from the brief time I spent around David Baazov, one thing was extremely clear to me, he will do whatever it takes to win. He is the type of guy I want my money in on.

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Regardless of who has their name listed as CEO on paper, the truth is that Baazov is still running this company. He owns roughly 17% of the shares in the company and while dealing with his court case is without question advising Rafi Ashkenazi from the sidelines. High ownership in the company is another important factor when buying shares in a gaming company, almost as important as who is running it. If you can find a combo like Amaya where the guys at the top of the charts are highly invested themselves, you can be sure the motivation in always going to be there to improve the bottom line.

Market share is another important factor in the gaming industry. Amaya of course, owns both Poker Stars and Full Tilt which combine to house play for 72% of the online industry, roughly 100 million active users. Poker Stars strong marketing footprint along with the continuous innovation to speed up play, get more hands dealt and in turn generate more rake is leaps and bounds ahead of the remainder of the industry. Poker Stars will forever be at the Coca Cola mark where they are so established that regardless of what competitors come up now, the brand and name is so strong it will always hold the share of the market.

Amaya for me checks all the boxes when looking from the outside as a stock to narrow down. A cerebral leader that is highly invested and does whatever it takes, strong market share and leading innovation.
The question now becomes, what is the big picture and does the price make sense?

The big picture for Amaya is the United States. It was the reason Bazzov did what he did to raise the 4.9 billion dollars to buy Poker Stars and Full Tilt. He ultimate and only goal out of all of this was to get poker re-established in the United States and take advantage of the massive market. This, as I write this, is slowly coming into fruition. On Friday February 10th, a preliminary bill was put into the house in Pennsylvania. This bill should be passed at the initial stage mid March. It would then hit the senate mid April and be on the desk of the governor by mid May.

Pennsylvania would be a big win, but what interests me the most is what is going on in New York. Last year the vote to regulate Poker in the State of New York passed 53-5 in the Senate, but Gary Pretlow shot down the bill and declared it dead in the Assembly. Pretlow, the one key clog in the path to regulation has since turned on his stance and is in approval of the newly pending bill. The debate in New York is because it is against the law to expand any type of gaming which is not skill based. This issue has been relived because Pretlow has since defined poker as a game of skill.

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If Pennsylvania falls in place, then New York will follow shortly after. These two States should create a domino affect across the country. With each State voting for regulation and legalization of online poker, Amaya puts themselves in a better and bigger position to grow. Each State could drive the price of the stock up $1-$3. With the current price at $14.50, should both States fall into place, we could be looking at Amaya shares being valued in the mid $20’s by the end of the year, a very nice return on investment. To make matters even more positive, many people in the industry are expecting the final quarter results for Amaya to be very positive after a disappointing Q3 in 2016. This spike in revenue should cause a lot of excitement around the stock heading into these government hearings and provide a nice momentum in the market.

With the court case for Baazov expected to wrap up by the end of 2017, there is potential for him to try take the company private again. I have little doubt he gets let off his charges and takes back at the helm of the company. His connections with Hong Kong funds gives him basically an unlimited source of funds to work with for financing. He has already offered $24 a share (about 6.7 billion total offer) in 2016 which caused the price to rise like crazy, and I would not be shocked to see him come over the top with another big offer when all the dust clears, especially after multiple State regulations. I see a ton of upside in Amaya for 2017, and recommend a buy at $19.08 (CAD) or $14.65 (USD).

 

NFL Superbowl Futures Bet

UPDATE – Jan 22nd, 10:59pm MST (GMT -7)

I will be risking 8.70pts to win 6.00pts on New England to win the Superbowl. This means I will have Atlanta risk free to win the Superbowl to return 29.30pts or 73% of the original maximum return of my wager. Here is hoping we have a GREAT end to the NFL Season with what could potentially go down as one of the best bets I have ever made. Enjoy!

UPDATE – Jan 21st, 1:06pm MST (GMT -7)

I will be risking 2.00pts to win 3.90pts on Green Bay against Atlanta to protect my 4pt liability on my futures bet. Should Atlanta win, then I would have a liability of 6 with an upside return of 40pts. Should Atlanta face New England in the Superbowl, any hedge options would come at a moneyline price of roughly -175. Should Atlanta face Pittsburgh in the Superbowl, any hedge options would come at a moneyline price of roughly -115. Either way, we are in a VERY favourable position with a TON of upside should the Falcons win at home this week.

To Win Superbowl LI
Bet: Atlanta Falcons
American Odds: +1000
EU Odds: 11.00
Stake: 4.00 pts
To Win: 40.00 pts

As a bettor, I do not care much for futures. I care even less for NFL futures. The reason for that is because rarely can a bettor ever identify value in a futures market. Many bettors without thinking twice will ignore the fact that margins books install into futures markets are bigger than any other markets. It is not rare to find some bookmakers that cater to unsuspecting US bettors, even in Las Vegas, price their NFL futures markets up to 140%. To put that in perspective some of these futures markets have margins that would be equivalent to each side being priced at -220 (1.45) in a head to head matchup. No one in their right mind would consider playing into that market, yet, bettors constantly flock to futures markets without thinking twice.

Long story short, between having stake tied up for an extended period of time and poor margins, futures are not often a great bet.

However, this postseason is quite a different scenario.

The Patriots, Steelers, Cowboys and Packers are all market leaders. These four teams are the four most popular teams in all of American sports. This has caused the top of the NFL futures market to be extremely top heavy, eating up much of the margin and leaving other teams at the bottom of the market priced too long.

I think the mistake many bettors make is approaching futures markets looking only at the end goal. Looking at the league right now, outside of those four teams listed, it is hard to make a strong case for other teams to win the Superbowl. However, this should not stop anyone from looking at these other teams because at the end of the day this is a market and it must respond to and respect results. With that in mind, to have success betting futures, one does not only need to have the winning team at the end, but rather, have a team which is priced too long and will shorten significantly as they advance.

The one team that really stands out to me in the NFC is the Atlanta Falcons. This price at 10/1 right now is way too long in my opinion. Never have I seen a two seed as disrespected as Atlanta. By securing the two seed, depending on how games go this wildcard weekend, Atlanta could see their price shorten significantly before their second round game even kicks off should Seattle or Green Bay lose.

The most likely opponent for Atlanta in the second round is Seattle. Not that any team needs extra motivation to perform in the playoffs, but the Falcons should have that extra bit behind them to beat Seattle after the refs chose not to throw the flag in their match-up earlier in the year, costing Atlanta a field goal attempt to win. Whether they should have won or not is a conversation for another time, but what I took most out of that game was the fight the Falcons showed. It was a back to back road trip after playing Denver in tough conditions the week before. Not only did Atlanta whether the best half Seattle played all season, but they forced them to score late to take the lead. Atlanta is a terrible match-up for Seattle, and it showed. Seattle has about as significant of home/away splits as any playoff team in the league, and with the home field advantage on a fast surface in favour of Atlanta, the Falcons are surely to be a nice sized favourite with a very good chance of winning that game.

Should Atlanta take care of business in their home playoff game in the second round, their price will be cut in half, no higher than 6/1. Assuming they go to Dallas, they will be a 4-5 point underdog, which would present a ton of opportunity to remove any liability on them and run the rest of the way risk free.

With the price dropping down to 6/1 off a win it would also present an opportunity for a significant hedge and a nice profit. Of course, anyone wanting to let the bet run will be in a nice position. Atlanta is the worst match-up for Dallas in the NFC. The Falcons have quietly put up one of the highest scoring seasons in NFL history, and they are as good as any team at taking what opposing defence give them. It just so happens that Dallas gives up the short 5-8 yard pass to anyone wanting to take it, which is where Atlanta can be very effective with tall, strong receivers and accurate Matt Ryan.

Much of the Cowboys success has come this season due to their offence masking their porous defence. Atlanta is the one team in the NFC that can keep pace with Dallas and stay competitive in the game, not letting the Cowboys offence drain them out. With so much uncertainty surrounding the Cowboys in terms of how will rookies Prescott and Elliott handle the extended season and playoff atmosphere, the Falcons are likely to be a very sharp play on conference final weekend should they end up playing Dallas. Of course, should any other scenario happen, the Falcons would end up hosting that conference final game against Green Bay in all likelihood, a team they have already beat at home this season.

The combo of the big four public teams leading the market is allowing for this price to be available at a much bigger price than they should be listed at. The perception on the Falcons is also very good for bettors, as they are flying well under the radar. Atlanta has not been in a big profile game since the end of October. A lot of people may be underestimating just how good this team is seeing them with victories over the Rams, 49ers and Panthers (12-33 combined record) in the three weeks leading into the playoffs. Even though the competition may have been poor, the Falcons have exceeded their opponents average allowance considerably in each game and have proven to be one of the most efficient teams in the league despite what many make of their easy schedule down the stretch.

Since 2000, a team that has finished in the top 3 of net yards per play has competed in the Superbowl each year. This year the only two playoff teams in the Top 3 were Atlanta and Seattle. With my opinion on the matchup with Seattle listed above, Atlanta would be the last remaining team to keep this angle alive for yet another season. Atlanta at 10/1 with arguably the second easiest route in the league to the Superbowl has far too much upside to pass up.

Power Ratings: NFL 2016 Season Review

Way back at the beginning of the year on September 1st, I posted about a method using the highly efficient preseason win total markets to set a baseline for NFL Power Ratings. I wanted to experiment using the expected win total at the end of the season as the determining factor for moving power ratings. I thought if I could move the ratings week to week based on where a team would end up, rather than what they did the week prior, it would lead to more accurate movements and ratings throughout the league. This method prevented me from installing personal bias into the ratings and exceeded my greatest expectations.

After the regular season, here are how my Power Ratings record ended up:

Top Bets (advantages of 3 points or more) in 2016 went 39-24-1 for a winning percentage of 62% against the spread. 

Ratings overall went 112-101-5 for a winning percentage of 53% against the spread.

While the sample size is still somewhat small, this method made me feel very confident on a week to week basis. This is certainly a method I will revisit for next season.

I appreciate all followers who visited my website on a week to week basis throughout the NFL season. I encourage all to continue to follow throughout the upcoming tennis season and get involved with my weekly tennis tournament wagers.

Happy New Year!

Power Ratings: NFL Week 16

At the beginning of the season when I began doing this ratings, I said it was important to adjust them from week to week to stay in lane with where things would likely end up at the end of the season. The concept of the ratings was very simple, if you know where the teams will finish, the value of a win can determine the point spread. With just two weeks to go in the season, the results have spoke for themselves, with top bets hitting over 64% after a 1-2 tally last week.

What is important to note now that the end of the season is here is  that it is quite easy to make an accurate prediction on where teams will finish, and bet accordingly with confidence. Of course, there are cases where motivation and starting players factor into the equation, but, for the most part throughout the league with so many teams fighting for final playoff spots, this week should allow everyone betting the ratings to dial the risk up a bit, and take bigger shots with some of these bets. Not to much surprise, there are more top bets this week than any other during the season.

I have two bets circled this week…
Both of these favourites will win by double digits
Get both bets and full write-ups here

To date, my power ratings are 102-94-5 (52%) ATS overall. Top Bets (advantages of 3.5 points or more) are 36-20-1 (64%) ATS. This week there are SEVEN teams with an advantage of more than a field goal. They are, NY Giants, Tennessee, New England, Oakland, Seattle, Los Angeles and Kansas City

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Power Ratings: NFL Week 15

The results of the Power Ratings last week we are good as could be expected. There were 3 Top Bets, all of which covered the spread. After a slight bump in the road to end November, things have righted themselves nicely, with Top Bets going on a 6-1 run and the ratings overall showing back to back winning weeks in December.

There is a NFL total this Sunday which is off by 5 points

I have singled it out and bet it big

This will be NFL Double Bet winner 11 of 12

Get my bet and full write-up here

To date, my power ratings are 95-87-5 (53%) ATS overall. Top Bets (advantages of 3.5 points or more) are 35-18-1 (66%) ATS. This week there are THREE teams with an advantage of more than a field goal. They are, Houston, Buffalo and Dallas.

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Power Ratings: NFL Week 14

It was a very nice rebound week last week as my Top Bets went 3-1 and my Power Ratings overall went 8-5 ATS. After two weekends of torture losing countless games by less than a field goal, the bounces began to fall the way of the ratings.

NFL Double Bet Winner #11 in a row is set for Sunday

I have an underdog which will win outright!

Make sure you have this bet on your Sunday card

Get my best bet this week with full write-up here

To date, my power ratings are 89-81-5 (52%) ATS overall. Top Bets (advantages of 3.5 points or more) are 32-18-1 (64%) ATS. This week there are THREE teams with an advantage of more than a field goal. They are, Houston, NY Jets and New England.

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