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December proved to be a favourable month for the stock market, with the majority of gambling stocks on our watchlist registering gains.

Yet, true to the pattern observed every month, there were still a handful of less fortunate ones.

Rivalry

Within the operator category, Rivalry stood out as one of the month’s under-performers, wrapping up December with a 7% loss.

The stock plummeted from C$1.14 on 30 November to C$1.06 on 29 December.

The drop, however, appeared to be a stabilisation following a sharp increase in the share price at the end of November, which was an eventful month for the company.

On 15 November, the operator announced a new C$14m-investment, resulting in an immediate spike in its share price when disclosed.

The new investment was earmarked for strategic purposes including marketing initiatives, product development, and expansion into new geographic markets.

Rivalry also reported a 22% year-on-year revenue increase to C$8.7m for Q3 2023, while betting handle surged to C$105.7m, a 50% rise from the same period in the previous year. 

Despite Rivalry’s primary focus on esports betting, the operator’s online casino segment contributed C$50.4m to the Q3 betting handle.

However, the expanding iGaming share within Rivalry raises questions about the potential and growth prospects for esports betting, a topic that already generates considerable debate.

Having gone public in October 2021, Rivalry still maintains a relatively modest valuation. However, the stock experienced a commendable 17.8% gain throughout 2023.

Moving ahead, investors will undoubtedly monitor Rivalry’s expanding product suite closely, while CEO Steven Salz also expressed intentions to expand into new geographic locations beyond the US in 2024.

Light & Wonder

In the supplier category, Light & Wonder registered a loss of 7.1% in December, with the share price falling from $88.42 to $82.11 at the end of last month.

The reasons behind the share decline in December remain unclear, despite the notable gains of nearly 40% for Light & Wonder throughout 2023.

In Q3 2023, Light & Wonder generated a 13% year-on-year revenue increase to $731m. 

Consolidated adjusted EBITDA grew 22% year-on-year to $286m, driven by double-digit growth  across all business segments, encompassing gaming, SciPlay, and iGaming.

The supplier highlighted the performance of its social casino business SciPlay, which posted a 15% year-on-year revenue rise to $196m on the back of strong player metrics. 

In August, Light & Wonder acquired the remaining 17% equity interest in SciPlay, which it did not own previously. 

Moreover, CEO Matt Wilson revealed that the firm is well on track to achieve its annual EBITDA target of $1.4bn by 2025.

“We’ve also built a cost optimisation programme into our plan as a mitigant against any potential headwinds. 

“But yeah, I think we are trending above the target line at the moment, and we’re on a path to deliver the $1.4bn,” Wilson had said. 

If accomplished, this would undoubtedly be welcomed as positive news for Light & Wonder’s investors.

Gambling.com Group

All affiliates on our watchlist closed the month with gains.

Interestingly, the affiliate stock that demonstrated the most robust performance this month was XLMedia, a company that found itself on our biggest loser list multiple times last year.

Raketech closed the month with a gain of 10.5%, while Better Collective experienced a notable increase of 7.8% in its share price throughout the month.

Acroud saw its stock surge by 8.6%, and Catena Media witnessed a commendable 3.9% increase in share value. 

Even though Gambling.com Group’s stock did not dip into negative territory, its modest 2% increase placed the company on the list of the month’s lowest performers.

Opening at $9.56 on 30 November and closing at $9.75 on 29 December, the stock remained relatively stable for the month. 

However, the most significant downturn in recent weeks occurred in mid-November when the group reported its Q3 2023 results.

Although Gambling.com Group generated a 19% increase in revenue, it also reported a 6% decline in adjusted EBITDA.

The stock suffered a 20.4% loss between 15 and 16 November and has yet to fully recover from that setback.

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