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Child care provider Antonia Rivas leads children in yoga at her Reseda home on Feb. 13. Senate President Pro Tem Kevin de Leon is introducing a bill to fund child care and provider training, and set up a structure to facilitate collective bargaining for family child care workers.; Credit: File Photo: Maya Sugarman/KPCC

Senate President Pro Tem Kevin de Leon is introducing a new bill on Wednesday that aims to address the state's critical child care shortage and give providers the right to unionize.

The lack of sufficient child care has been statewide. In Los Angeles County, a recent study found only 2 percent of infants and toddlers have access to a licensed child care facility; for preschoolers, it's about 40 percent.

The shortage is most acute in low-income areas, and the bill aims to inject more child care vouchers into the system so poor families can have free child care.

A more controversial provision, however, would allow collective bargaining for those who provide child care in their homes whose earnings can fall near or below the minimum wage. Child advocates cite poor pay as a major reason why providers often leave the field.

“The turnover in the child care field is approaching 30 percent. So the lack of continuity and quality care is a major obstacle,” said El Cerrito Mayor Mark Friedman.

Friedman co-chairs a coalition of early childhood groups called Raising California Together. Preschool advocacy groups, anti-poverty and immigrant groups, NAACP, and the Santa Monica school district count among its members.

“I think one thing everybody agrees on as a high priority is getting more resources in the system, and if there is a strong union presence in the field that then there will be a stronger voice for those additional resources,” said Friedman. 

Under the bill,  a network of 32,000 home childcare providers statewide could unionize. Currently, providers operate as independent business owners and typically lack the right to organize and collectively bargain for wages.

Finding child care

For many families, having a quality child care option is their most pressing need.

Vicky Montoya, a Reseda mother of three, is desperate for a child care alternative to family members. Montoya’s 18-month-old son, Esteban, is a bright-eyed toddler who loves balls. He can fling one clear across a room, even a field. But all too often, when both his parents are at work, he’s not doing much.

“Sometimes he’s with an aunt, sometimes with my eldest daughter,” Montoya said in Spanish. “But he doesn’t really do anything, all he does is watch cartoons on TV. And he’s alone, there’s no other children around.”

Montoya works five hours a day at a solar company, where she makes $10 an hour. Her family depends on her income to supplement her husband’s low-wage, full-time job. Montoya applied for a child care voucher so Esteban could go to a properly licensed day care. She submitted two applications to a local agency over the last two months.

When she called the agency to find out the status of her applications, she said she wasn't given much information. “'You are on the waiting list,'” she said they told her, “'and there are people ahead of you.'”

Seeking unions as a solution

In Maryland, unionized providers reduced the wait list for poor families by 80 percent by securing state dollars to fund more free child care slots. According to a 2010 report by the National Women's Law Center, 14 states guarantee home-based child care workers the right to unionize.

SEIU Local 99 spokesperson Terry Carter said what local providers tell her is that they want a seat at the table where child care decisions are made.

“What collective bargaining would do for providers is it would let them sit down with the top decision makers in the state and say these are things that are simple to fix, they would vastly improve our ability to operate our businesses and they would give us the time to direct more of our attention and energies into raising California’s kids,” Carter said.  

Some of those issues include delayed government payments for subsidized child child and the low reimbursement rate from the state for serving low-income kids.

Antonia Rivas, a Reseda child care provider, knows well the struggle of providing care in her home. She infuses yoga and meditation into daily lessons, and buys organic food, her major expense.

But she also has to pay her assistants, buy toys, books, and supplies. After her costs, she said there is not much left.

“I just got my 2014 W-2 and it's $24,000,” Rivas said. Her W-2 comes from the agency that pays her for the low-income kids she serves. Add to that the $15,000 from her private paying families and Rivas pulled in about $40,000 last year. After expenses, she estimates she netted less than the minimum wage for her time.

Rivas said with her low wages and delays in receiving payments from government agencies for subsidized child care, she is constantly relying on credit to keep her business running.

“We need to get a contract [and] better pay,” Rivas said.

Even if the child care legislation passes, a contract with the state would be a long way down the road. All child care providers would need to vote on whether they want union representation. And, if all that is successful, child care providers could then negotiate a labor contract.

Similar bills granting child care providers the right to unionize have made it out of the legislature, but both Gov. Arnold Schwarzenegger and Gov. Jerry Brown have vetoed them.

Opponents have called the effort to organize providers a move to empower labor unions, not fix a broken child care system. 

Recent legal rulings are also presenting challenges to unions seeking to organize both child care workers and health care workers. The U.S. Supreme Court ruled last year in an Illinois case that home health workers could opt out of paying union dues, even though they are paid with state subsidies.

While Vicky Montoya waits for a better solution for her son's care, she pays Esteban’s aunt or a neighbor $10 a day to watch him while she works.

“I know lots of families who have to leave their children with a babysitter, usually just a woman who watches the child. But they are not trained and even their homes are not suitable for childcare,” she said. 

Correction: A previous version of this story erroneously described a U.S. Supreme Court case as originating in Minnesota. 

This content is from Southern California Public Radio. View the original story at SCPR.org.

UTLA says it is at an impasse with the Los Angeles Unified School District over a new contract for its 31,000 teachers. ; Credit: File photo by Letsdance Tonightaway/Flickr Creative Commons

The United Teachers Los Angeles declared an impasse Wednesday in its talks with the Los Angeles Unified School District.

The action opens the way for a mediator to be brought in to help bring about a settlement.

Contract talks have been ongoing since July, UTLA said on its website.

"There is still a significant gap between the two sides on compensation," the union stated. UTLA is seeking an 8.5 percent, one-year increase; LAUSD has offered a 5 percent increase. 

The union said the district is "refusing to bargain in good faith on student learning conditions, and threatening educator layoffs as a scare tactic."

LAUSD Superintendent Ramon Cortines said in a statement that the district agrees the talks are at an impasse.

"I've been disappointed and frustrated by the lack of progress toward an agreement," he said. "It's my hope that the appointment of a mediator will lead to an expeditious settlement that ultimately supports our students and the District at large."

UTLA represents 31,000 members, including teachers and health and human service professionals.

The differences between the two sides amount to more than $800 million, the district said in its statement. Cortines has maintained that the district is facing a deficit. The union insists the district has money.

Other issues dividing the two sides include class room size and teacher evaluations.

This content is from Southern California Public Radio. View the original story at SCPR.org.

File: Los Angeles Unified 6th-grader Jack Spiewak performs as Macbeth at Eagle Rock Elementary School. District schools can now use a major source of federal funds to incorporate the arts into academics.; Credit: Maya Sugarman/KPCC

Los Angeles Unified School District officials have cleared the way for principals to tap into a major source of funding for arts programs targeting low-income students starting this fall.

Although state and federal officials previously said national Title I dollars, allocated to help disadvantaged students improve in academics, could be used for the arts instruction, some district officials had been reluctant to move ahead. The latest decision reverses the district's long-standing practice and opens the door for Title I-funded arts instruction that helps students improve their academic performance. 

"This has been a long time coming and this really is a day of rejoicing, quite frankly, in LAUSD," said Rory Pullens, the district's executive director of arts education. 

RELATED: For Pasadena school, arts plus math is really adding up

A two-page memo issued Thursday from Pullens, Deputy Superintendent Ruth Perez and Karen Ryback, executive director of Federal and State Education Programs, confirms the arts as a core subject and allows schools with high percentages of low-income students to use Title I funds for the arts.

Those schools "may utilize arts as an integration strategy to improve academic achievement," the directive reads. However, Title I funds are not allowed "to fund programs whose primary objective is arts education," according to the memo. As an example, the funds could be tapped to help students learn a character's point of view in a lesson that requires acting out a skit. 

Title I funding, developed in 1965 as part of President Lyndon Johnson's war on poverty, has been used historically to increase students success in reading and math. The funds have paid for efforts like reading coaches or math tutors, supplemental software programs and professional development for teachers to improve low-performing students' test scores.

At $14 billion a year, the Title I funds make up the federal government's largest expenditure for grades K-12. The majority of LAUSD schools receive Title I dollars.

Arts advocates have long sought to get the second-largest district in the country to shift its stance on Title I arts funding, arguing that the arts have been shown in research to boost student academic performance. 

LAUSD joins just a handful of districts around the state that have committed to a district-wide Title I plan including the arts. San Diego Unified, Sacramento City Unified and Chula Vista Elementary School District are among them, according to Joe Landon, executive director of the California Alliance for Arts Education. 

Landon says beyond these districts, the decision to use Title I for the arts is largely playing out on a school-by-school basis. Some principals are using Title I funds for the arts, but they're doing so largely under the radar, some fearing that state monitors will say the funds were used incorrectly. 

"At each level, there are people that are afraid," Landon said. The reason: schools are accountable for how Title I dollars are spent and misuse could cause schools to lose a valuable funding source. Despite the state and federal directives on Title I allowing arts instruction in academics, school officials have been hesitant to make changes because Title I spending is monitored so closely. 

Landon explained that a decision to use Title I funds for the arts is momentous for schools.

"When districts begin to move," he said, "that really changes it."

Attention turns to principals, funding gatekeepers

When Los Angeles Unified brought on Pullens, attracting him from a well-known arts school in Washington, D.C., he took on the task of securing Title I funding in his early months on the job. He said budgeting would be a huge challenge in increasing access to the arts for more of the district's students. 

The deed now done, Pullens said: "This was clearly a very high priority of what we wanted to accomplish and we are just so thrilled that this has finally come to pass."

It'll now be up to school principals to decide how much of their Title I funding to allocate for arts instruction. Pullens said plans to train principals on the benefits of arts integration are underway.

While the Title I arts spending is not mandatory, he expects the new directive to free up significant funding for the district's arts efforts. He didn't have exact estimates, but pointed out that schools' Title I funds range anywhere from hundreds of dollars to hundreds of thousands of dollars per school. 

As KPCC reported in July, only about 70 of the district's more than 500 elementary schools were on track to provide all four art forms (dance, visual arts, music and theater) for the 2014-2015 school year — a legal requirement under the California education code. 

Cheryl Sattler, senior partner with the Florida-based consulting firm Ethica, has worked closely with about 100 school districts nationwide and estimates only two have used Title I funding for the arts.

“The urgency is to try to get kids to read," she said, "and if you have kids, for example, in the 10th grade who are reading at a 3rd or 4th-grade level, it’s really hard to think past that, because that’s the emergency.” The arts are often left out of the conversation, according to Sattler, which means they're left out of funding.

“I think the issue is that largely principals, and school improvement committees, and other folks who are worried about academic performance don’t always look to the arts and they don’t always know the research about how powerful arts can be,” she said. 

The LAUSD directive described examples of arts integration activities that schools might consider:

• Invite community members to demonstrate or share their talents with students as a prompt for a writing assignment.
• Have students create models that display mathematical data pertaining to each planet of the solar system: distance from the sun, length of day and night, length of year, and day and night surface temperatures.
• Ask students to create a small piece of dance/movement that models their understanding of geometric concepts.
• Encourage students to explore the science of sound by utilizing rubber bands, oatmeal containers, coffee cans, balloons, etc. to construct one or more of the four families of musical instruments: strings, woodwinds, brass and percussion.
• Have students write and perform a short skit to illustrate a literary character’s point of view.
• Provide a lesson on utilizing a software program to create an animated film that highlights key historical events that occurred during the Civil War (In this instance, the cost of the software program would be an appropriate Title I expenditure). 

Supporting Title I Schoolwide Program 2-19-2015

This content is from Southern California Public Radio. View the original story at SCPR.org.

In this file photo, students warm up in a mariachi class at Hamilton High School.; Credit: Susanica Tam for KPCC

Los Angeles Unified's arts education leaders took steps to renew long-dormant community partnerships with arts organizations Wednesday, part of an effort to revitalize arts education in the nation’s second largest school district. 

At the Los Angeles Cathedral in downtown L.A., the district's new arts ed director, Rory Pullens, held his first meeting with community arts organizations. More than 100 people representing several dozen groups attended the event.

Pullens outlined the district's arts plans and how community partners can help boost the arts for students.

“Guess what," Pullens said, getting a round of applause with cheers of support from some of the attendees. "We're back." 

RELATED: LAUSD decision ushers in new source of funding for arts education

Pullens lauded the district's recent announcement clearing the way for arts funding for low-income students, and pointed to new allocations this year that helped some of the district's schools purchase items like art supplies.

He also said the district is working on a school survey to create an arts equity index that will change the way the district allocates arts funds. The index would measure how well schools are providing arts instruction and arts access to students. Originally planned for release last year, the index is now expected next month.

But Pullens also painted a grim picture of the district’s current arts offerings. He said about a third of the district's middle schools currently offer little or no exposure to the arts. Some of the district’s students can go through both elementary and middle school without taking a single arts class, he said. Because of gaps in arts instruction, students who start learning an instrument in elementary school, for example, might not have classes to continue music study in their middle or high schools.

Pullens further talked about widespread budget problems, but took district leaders to task for failing to restore arts funding to the budget as the recession eased.

He said the arts education branch is still facing a deficit. Superintendent Ramon Cortines told reporters recently that the district as a whole is looking at a $160 million shortfall heading into the 2015-2016 school  year.

Despite the mixed funding news, for many in attendance, the meeting marked a positive shift in the district's arts strategy. Some groups currently serve as partners with the district, but the gathering was the first major effort in several years to reach out to organizations with the aim of restoring arts in the schools.

Jay McAdams, the executive director of 24th Street Theatre, said he remembered a few years back when the district emailed a cease-and-desist letter calling for an end to all arts partnership programs. He saw Wednesday's meeting as a major turnaround. 

"This is just a real breath of fresh air. There’s hope, there’s hope for first time in a long time for arts," he said. 

This content is from Southern California Public Radio. View the original story at SCPR.org.

The studio arts program at California Lutheran University in Thousand Oaks, Calif., includes courses in painting. ; Credit: Photo courtesy of Cal Lutheran/Brian Stethem

California Lutheran University in Thousand Oaks has taken the first steps toward building a new, art center with a commitment of at least $8 million in contributions and matching funds.

Over the weekend, the university's board of regents voted to spend $300,0o0 on design and planning for the new project. The complex will include offices and art studios in about 25,000 to 30,000 square feet of space.

RELATED: Top 10 arts education stories for 2014

The center will be the new home for the school's art department, which is currently spread out across the campus. 

"The facilities that they're in now are really not optimal," said Karin Grennan, the media relations manager for the university. 

The school offers instruction in studio arts, design and commercial art, digital art and art history. 

Grennan said the new project will add to the university's recent art initiatives: in 2012, the faculty members launched an art conference that's attracted international interest. Two conferences have been held so far and the next one will take place in November. The university is also raising funds to build a new performing art center on campus. 

Art collector and real estate developer William Rolland pledged up to $4 million toward the art center project, an amount the university will match. 

Rolland has previously donated money to the university, including contributions for the football stadium and art gallery. Rolland spent several decades as a real estate developer in Ventura County, and once lived in Thousand Oaks. 

This content is from Southern California Public Radio. View the original story at SCPR.org.

Los Angeles Unified school board candidates, from left, Andrew Thomas, Ref Rodriguez and Bennett Kayser take a group photo after a debate at Eagle Rock High School on Feb. 5, 2015. ; Credit: Cheryl A. Guerrero for KPCC

Los Angeles Unified school board candidate Ref Rodriguez collected $21,000 in campaign donations from employees of his charter school network, Partnerships to Uplift Communities, in his bid to unseat incumbent Bennett Kayser in East Los Angeles’ District 5.

Most striking, a handful of his workers – a janitor, maintenance worker, tutor — are donating at or near the contribution limit, $1,100.

The contributions are a measure of supporters' high hopes to unseat Kayser in favor of Rodriguez, a candidate friendly to charter schools.

Rodriguez, an charter school administrator at Partnerships to Uplift Communities, received most of his financial support from the California Charter School Association Advocates, which received donations from such wealthy donors as former New York Mayor Michael Bloomberg and philanthropist Eli Broad.

Kayser, a former teacher elected as a board member in 2011, collected his largest donations from labor unions, particularly the United Teachers Los Angeles. 

Most of the money working toward Kayser and Rodriguez's reelection are not funneled into their individual campaigns, but to independent expenditure committees which are not subject to the $1,100 contribution limit.

In her first foray into political giving, Luz Maria Lopez, an office worker, donated $1,000 donation to the Rodriguez campaign, twice the amount of Partnerships to Uplift Communities' CEO, Jacqueline Elliot.

“I really believe in Ref. My kids go to PUC schools,” said Lopez, who has been employed by PUC since it opened 15 years ago.  

The employee contributions weren't coerced and will not be reimbursed, Rodriguez said. Many of them can be traced back to a holiday break fundraiser at Rodriguez’s sister’s home in La Puente.

“I know for many of them this is a tremendous sacrifice,” he said. “It’s just been sort of an outpouring of folks belief in me and what we are trying to do for the city.”

Charter school groups major funders

Direct campaign donations from individual contributors, such as Rodriguez’ employees, make up 18 percent of the money spent in the LAUSD’s District 5 school board race. 

The biggest donor is charter school advocacy groups, such as the California Charter School Association Advocates.

Donations have also come from self-described education reform groups that support charter school expansion and firing teachers deemed ineffective, among other issues.

All told, the advocacy groups contributed more than $700,000 to activities in support of Rodriguez and working against Kayser.

On the other side, UTLA funneled $330,000 of members’ contributions to activities supporting Kayser and working against Rodriguez.

While UTLA has turned up its political spending in the board race to stay competitive, it is routinely outspent, said Oraiu Amoni, the union’s political director.

“We never are going to be able to match [reformers] dollar for dollar,” Amoni said. “So our biggest thing is making sure our members are educated, are engaged, are aware — and vote.”

So far, campaigns and committees have spent more than $2 million on the 13 Los Angeles Unified school board candidates, according to filings with the L.A. City Ethics Commission. The contributions have paid for mailing of glossy ads, phone banks, billboards, robocalls and commercials on Spanish-language radio. 

Total contributions are expected to increase in the few days remaining before the primary and swell again in any May runoff. 

Even in major races, aggressive campaigns fueled by growing contributions from special interest groups make it difficult for candidates not affiliated with interest groups to stay competitive.

Limitless independent expenditures are "playing a major role in smaller and local elections,” said Ryan Brinkerhoff, campaign manager for Andrew Thomas, the unaffiliated candidate in the District 5 race.

Thomas, a professor at Walden University, donated $51,000 to his campaign, making him his own biggest contributor. He’s also attracted sizable local support: about 70 percent of his campaign donations come from residents who live in District 5.

Thomas has received no contributions from political action committees or advocacy groups.

Can he win?

“I think so, but it’s getting harder and harder,” Brinkerhoff said. “The results of this election are going to be very telling.”

Outside contributors, local concerns

When public schools were created in the United States, local communities were given control over their governance. Outside money “undermines the relationship between community members and their local public institutions,” according to John Rogers, an education professor at UCLA. 

“It undermines their sense that they own those institutions, and those institutions are theirs to be shaped,” he said.

Without the funds from Broad, Bloomberg and other large donors, Rodriguez’s employees’ contributions would have made up more than 30 percent of his campaign support. Instead, it’s 4 percent.

Kayser has also received support from outside the district, including donations from the American Federation of Teachers and the California Teachers Association.

"The voters have an interest in open and transparent elections in which outside dollars don't have too large an influence," Rogers said. 

To read more about the school board election and City Council races, visit the KPCC 2015 voter guide.

Clarification: This article has been updated to make clear that the California Charter Schools Association does not support or advocate for teacher firing policies. Support for incumbent Kayser from outside the district has also been noted.

This content is from Southern California Public Radio. View the original story at SCPR.org.

Apr 16, 2020; 133:jcs245373-jcs245373
CELL SCIENTISTS TO WATCH

Georgi Dimchev
Apr 9, 2020; 133:jcs239020-jcs239020
Articles

Norbert Volkmar
Apr 24, 2020; 133:jcs243519-jcs243519
REVIEW

Full Text:

The molecular mechanism used by many bacteria to kill neighboring cells has redundancy built into its genetic makeup, which could allow for the mechanism to be expressed in different environments, say researchers at Penn State and the University of Wisconsin-Madison. Their new study provides insights into the molecular mechanisms of competition among bacteria. "Many organisms, including humans, acquire bacteria from their environment," said Tim Miyashiro, a biochemist and molecular biologist at Penn State and the leader of the research team. "These bacteria can contribute to functions within the host organism, like how our gut bacteria help us digest food. We're interested in the interactions among bacteria cells, and between bacteria and their hosts, to better understand these mutually beneficial symbiotic relationships." Cells of the bioluminescent bacteria Vibrio fisheri take up residence in the light organ of newly hatched bobtail squid. At night, the bacteria produce a blue glow that researchers believe obscures a squid's silhouette and helps protect it from predators. The light organ has pockets, or crypts, in the squid's skin that provide nutrients and a safe environment for the bacteria. "When the squid hatches, it doesn't yet have any bacteria in its light organ," said Miyashiro. "But bacteria in the environment quickly colonize the squid's light organ." Some of these different bacteria strains can coexist, but others can't. "Microbial symbioses are essentially universal in animals, and are crucial to the health and development of both partners," says Irwin Forseth, a program director in the National Science Foundation's Division of Integrative Organismal Systems, which funded the research. "The results from this study highlight the role small genetic changes can play in microbe interactions. Increased understanding will allow us to better predict organisms' performance in changing environments."

Image credit: Andrew Cecere

Full Text:

How do galaxies such as our Milky Way come into existence? How do they grow and change over time? The science behind galaxy formation has long been a puzzle, but a University of Arizona-led team of scientists is one step closer to finding answers, thanks to supercomputer simulations. Observing real galaxies in space can only provide snapshots in time, so researchers who study how galaxies evolve over billions of years need to use computer simulations. Traditionally, astronomers have used simulations to invent theories of galaxy formation and test them, but they have had to proceed one galaxy at a time. Peter Behroozi of the university's Steward Observatory and colleagues overcame this hurdle by generating millions of different universes on a supercomputer, each according to different physical theories for how galaxies form. The findings challenge fundamental ideas about the role dark matter plays in galaxy formation, the evolution of galaxies over time and the birth of stars. The study is the first to create self-consistent universes that are exact replicas of the real ones -- computer simulations that each represent a sizeable chunk of the actual cosmos, containing 12 million galaxies and spanning the time from 400 million years after the Big Bang to the present day. The results from the "UniverseMachine," as the authors call their approach, have helped resolve the long-standing paradox of why galaxies cease to form new stars even when they retain plenty of hydrogen gas, the raw material from which stars are forged. The research is partially funded by NSF's Division of Physics through grants to UC Santa Barbara's Kavli Institute for Theoretical Physics and the Aspen Center for Physics.

Image credit: NASA/ESA/J. Lotz and the HFF Team/STScI

Source: Knox Henderson for Streetwise Reports   05/05/2020

News Update: A quick update since FansUnite Entertainment Inc. went live on Tuesday, May 5, because big things are happening in the industry, thus showing there is an enormous appetite for this kind of technology especially now, as we (very slowly) emerge out of this COVID pandemic. . .FansUnite is at a small-cap entry point with tremendous upside. After a financing at $0.35, the now-trading company rests slightly above that as a relatively new and unknown entity—so far—which is why now is great opportunity participate in a smaller scale, yet leveraged, consolidation play. "We have a great opportunity to use our stock as currency, and then grow and scale companies through our team and resources," says CEO Darius Eghdami. Read the entire update here.

Lets face it: gamers love games. While currently there's a dearth of real sports activity, that doesn't mean people aren't starving something to speculate on. No sports? No problem. Consider that there is $50 billion dollars placed online every year, according to ESPN. That's a lot of hungry money looking for a place to play.

So, despite the absence of the NFL, NHL, NBA and MLB, new online platforms are offering fun times for taking your chances on everything from reality TV shows, award shows, online gaming and virtual sports along with real in-the-flesh nail-biters like horse racing, table tennis and snooker. Who cares? It's all about the thrill of playing and winning. According to The The Guardian, just last week, "as coronavirus and the subsequent shelter-in-place orders have shut businesses around the globe and forced people to stay inside, some jobs have proven more stable than others," it said referring to online players. "The four U.S. states with legal sites—New Jersey, Nevada, Delaware, and Pennsylvania—reported record revenues in March." Meanwhile despite our current "modified behaviors" and "slowing of the economy," investors are also very keen on speculation in the gaming industry itself.

"FansUnite is at a small-cap entry point with tremendous upside."

Take, for example, DraftKings (NASDAQ:DKNG), which launched as recently as April 23, in the thick of this stay-at-home pandemic. After completing a merger with Diamond Eagle, a special purpose acquisition company, and back-end technology provider SBTech, its stock soared. Not only did DraftKings' stock jump 14% in its first day of trading before closing up 10.38% at $19.35, but the company was also able to add another half a billion dollars on the balance sheet at a time when it's not easy to raise money. The company is currently nearing a $1 billion market capitalization.

In this game, consolidation is key. Another highly successful big gaming conglomerate over-the-pond is UK-based GVC Gaming Group, which has been consolidating gaming assets over the last 15 years and is now worth $7.5 billion.

This week on the Canadian Securities Exchange (CSE) an emerging player is launching its platform onto the public market. FansUnite Entertainment Inc. (FANS:CSE), a company active in the gaming industry since 2014, is led by industry veterans who are looking to unleash their own high-growth consolidation strategy. The company is focusing on technology related to regulated and lawful internet activity and other related products.

Its business is to consolidate business-to-business (B2B) partnerships worldwide, operate its FansUnite business-to-consumer (B2C) coined Sportsbook launching later this year, and operate its recently acquired (March 26) Scottish subsidiary, McBookie, an online white-label sportsbook licensed and regulated by the U.K. Commission. Even considering the "COVID" delays in traditional sports, the company expects to generate at least $1 million in 2020. Considering FansUnite's experience in the space and its established technologies in an industry that is truly trending, FansUnite has a long runway from its current $25 million market cap to the billions-dollar peers it's chasing, and that is why this looks be a great stock to hold right out of the gate.

When you consider "B2B" in this scenario, consider an entity that wants to create a sportsbook, to become "the house," if you will. That company would turn to FansUnite to set up a turnkey "white-label" (as in use FansUnite technology but with its own brand) online platform, complete with user onboarding, fan integration and access to fulfillment in fiat currency (hard dollars) or cryptocurrency. For this service FansUnite takes a percentage of the "house earnings" and also charges for its Software as a Service (SaaS) platform. In the B2C scenario, FansUnite itself is the "house," using its own sportsbook and technology platform, and executes the marketing efforts to on-board new users.

McBookie, the company's first acquisition, is a white-label sportsbook in the UK, focusing on the Scottish market. It offers 200,000 members active in sports, and virtual games and boasts over $100 million turnover cumulatively the last three years. "It's a great brand with an experienced team operating for over a decade," says FansUnite CEO Darius Eghdami. "We completed this acquisition late March, and our focus currently is going to continue building our presence in the Scottish market."

Moving forward, Eghdami says the team will be putting an emphasis on M&A activity. "We'll continue to look for strong assets with either great technology or a strong database of users where we can come in with our team and resources and really grow and scale the business," he says.

With strong financial backing, Eghdami is also looking at potential opportunities in the colossal U.S. market. "The big heavyweights are coming into the U.S.. We don't intend to be an operator in the U.S., so we're looking at other ways to get in the market and that includes social peer activity, fan engagement, as well as licensed affiliate opportunities."

Eghdami points to another big success story in Canada, Amaya (TSE:TSGI), which is now The Stars Group and has a market capitalization of $11.5 billion. "It's a tremendous story of how they built the company and started to acquire assets. It's a model that we would love to follow."

After a crushing dip into the pandemic, TSGI.T is big-board player that has catapulted to new highs once the reality set in that social isolation might not necessarily be a bad thing for online gaming providers. According to Bloomberg, "The Stars Group Inc. says it saw record revenue in its first quarter as COVID-19 led to an increase in online activity starting in March. And, it says, it has continued to see increased activity in its online playing into the second quarter. In an update to its expectations for the three-month period ended March 31, the company says it expects revenue of approximately US$735 million, up from US$580 million in the first quarter of 2019."

"The stay-at-home lifestyle we now face in 2020 could result in a massive shift in the habits of players," says Eghdami. "Players that are used to going to the physical house, or the horse track, may now shift their habits to online. The older generation now may be signing up on online platforms and realize they can do this a lot easier. We're getting new users on the platform every day, and players starting to turn to virtual sports as well."

FansUnite is the brainchild of three entrepreneurs who have each already carved out more than a decade of in-the-trenches experience in the industry. Two of them including founder Eghdami and his former associate at KMPG, Graeme Moore, are chartered accountants, while co-founder Duncan McIntyre is a practicing lawyer schooled in mergers, acquisitions and corporate development. The teams' first success was the development of the FansUnite B2C social platform, which they eventually sold to a public company in 2016. FansUnite Social uses a free virtual currency for members to simulate the real thing while following and learning from their online heroes. The endgame, of course, is toward transferring the activity to the real-dollar platforms.

FansUnite Technology—B2C Social Platform

After the sale of the social peer platform, Eghdami and company decided to maintain the "FansUnite" brand equity in their new venture, launched in 2017. "We had the idea of getting into real-money sports gaming, spun it out of the pubic company, raised money in 2018 and started down this path. For the last year and a half we've been building our own technology to launch our sportsbook from a B2C perspective as well as prepare it for a full turn-key B2B solution. An option on the B2B platform will be a "smart contract sports book" whereby the funds are held "in-trust" and not accessible to FansUnite or end users until the event is completed and funds are directly sent to the winning party. The FansUnite platform is expected to accept cryptocurrency and regular fiat currency on its sportsbooks.

As part of FansUnite's roll-up strategy of entering into other world markets, acquiring yet maintaining well-established brands is the key to building its global B2B customers and B2C end users. The company is well funded with access to capital. Much of its support comes from industry leaders on the board like Shafin Diamond, CEO of Victory Square since 2015, a venture builder that builds start-ups in web, mobile, gaming, AI and AR/VR. Diamond has launched 40 start-ups in 24 countries, employed more than 350 people, and has generated over $100 million in annual revenues. He has received numerous awards, including the BC Tech Person of the Year Award, BC Angel Investor of the Year in 2014, and Business in Vancouver's Top 40 under 40.

FansUnite recently completed a financing of $3.1 million at $0.35 (free trading upon listing) and used $500,000 cash for the McBookie transaction before launching its IPO on the CSE. Total consideration for the McBookie deal was for approximately CAD$2.2 million, composed of the $500,000 cash up front, and $500,000 cash to be paid within 12 months, the rest in stock, at $0.35 a share, vesting and unrestricting over a course of 36 months.

Currently, management and insiders hold about 20% of the 70 million shares outstanding, and there are 3.5 million options and 1.4 million warrants with a weighted average price of $0.48 and $0.17 respectively, so no scary skeletons in the closet. Eghdami says the company is now sitting on about a $2 million war chest and burning about $175,000 per month. Should investor speculation lift its share price (as predicted here), it should be able to execute is M&A activity with a much stronger currency.

With $1 trillion waged annually, according to UK-based Football Report, the global market for this kind of technology is insane. Apparently, due to "COVID self-containment," it's "trending" even more as digital consumers are quarantined in their homes with nothing better to do but play on their computers.

As we hopefully ease out of this economic situation, FansUnite will have to execute fast and furiously. Now launching on the CSE at C$0.35 with a current market capitalization of $25 million, it has a long way to go, and much to prove, toward reaching the billion-dollar heights of its gaming peers, but the pie is big and the appetite is certainly there.

This is one race worth watching.

Knox Henderson is a journalist and capital markets communications consultant. He has advised for a broad range of small cap companies in the resource, life sciences and technology sectors for more than 25 years.

Disclosure:
1) 1) Knox Henderson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: FansUnite Entertainment Inc. My company has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with FansUnite. Please click here for more information. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of FansUnite. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of FansUnite, a company mentioned in this article.

( Companies Mentioned: FANS:CSE, )

Source: Knox Henderson for Streetwise Reports   05/07/2020

A quick update since FansUnite Entertainment Inc. (FANS:CSE) went live on Tuesday, May 5, because big things are happening in the industry, thus showing there is an enormous appetite for this kind of technology especially now, as we (very slowly) emerge out of this COVID pandemic.

On the sports front, Germany announced that its Bundesliga soccer will resume games in May, yet with tight restrictions and no fans. This is followed by the Turkish soccer league, which plans to resume playing on June 12. The Ultimate Fighting Championship (UFC), with a huge draw to the masses—the UFC 246 prelims averaged 1.767 million viewers on ESPN—will return at VyStar Veterans Memorial Arena in Jacksonville, Fla., on May 9, again featuring no live fans. So as more sports emerge in our "new reality," where will those fans be? Online, of course! In a fanless sports environment we're going to see a lot of online engagement no matter what sport or activity that may be. That's going to spawn even more online attention, which will likely hold firm even after we emerge from our home quarantine.

The industry is rapidly consolidating. On Tuesday we alluded to The Stars Group Inc. (formerly Amaya), which, according to Bloomberg, "saw record revenue in its first quarter as COVID-19 led to an increase in online activity starting in March. Indeed TSGI.T has had a great run from $18 mid-March to a high of $40 on May 1 after it confirmed shareholder approval of a friendly takeover by UK based Flutter Entertainment plc. (LSE:FLTR.L - News). The two create a £10 billion (US$12 billion) giant, according to Racing Post, and combine for more than 13 million customers, US$4.6 billion in revenue and US$1.7 billion in EBITDA.

Investors are getting on board

In our previous note we referred to DraftKings (NASDAQ:DKNG), which launched as recently as April 23, in the thick of this stay-at-home pandemic. After completing a merger with Diamond Eagle, a special purpose acquisition company, and back-end technology provider SBTech, its stock soared. DraftKings' stock jumped 14% in its first day of trading before closing up 10.38% at $19.35. The company was also able to add another half a billion dollars on the balance sheet at a time when it's not easy to raise money. That company currently has a $17 billion market capitalization.

Meanwhile there's been a noticeable correlation of trading activity in the industry from mid-March to the end of April:

• Prior to the merger with Canadian The Stars Group, Dublin, Ireland-based Flutter, trading as OTC:PDYPY in the U.S., had a good run of its own. Since mid-March it doubled from $31 to $64 by the end of April, despite any global sport-killing pandemic.

• UK-based GVC Holdings PLC (LSE:GVC) gained 23% in the last month, from $611 to $750, reaching a US$4.3 billion market capitalization.

• After falling from February highs of $30, Scientific Games (NASDAQ:SGMS) more than tripled from a $4 low mid-march to $13 by the end of April to again reach a $1 billion market valuation.

• Penn National Gaming (NASDAQ:PENN), now at a US$1.8 billion market capitalization, has a chart that mirrors SGMS. After February highs of $38, PENN rebounded through the COVID crisis. It also more than tripled from a low of $4.50 mid-March to a $17.80 high by the end of April.

• Score Media and Gaming (SCR.V,) with a market capitalization of $185 million, during that same period, ran from $0.32 to $0.42 mid-march to April 29, gaining 31%

• (are you starting to a pattern here?)

On the regulatory front, Colorado, became the next state to legalize sports bargaining following New Jersey, Nevada, Delaware and Pennsylvania. The state is poised to generate $6 billion in annual wagers and an estimated $400 million in revenue once the industry matures, according to Dustin Gouker, chief analyst for PlayColorado.com. According to the Denver Post, Colorado fans will have their pick of 17 digital sportsbooks currently licensed to operate in the state.

FansUnite Is at a Small-Cap Entry Point with Tremendous Upside.

It is in this environment that FansUnite launched on the Canadian Securities Exchange on May 5. "We are just getting started," said CEO Darius Eghdami. "We've bought a great asset in McBookie and will be continuing to focus on M&A." McBookie, the company's first acquisition, is a white-label sportsbook in the UK, focusing on the Scottish market. It offers 200,000 members active in sports and virtual games, and boasts over $100 million turnover cumulatively the last three years. "We want to be active in finding that next 'McBookie' operating in a niche market, looking at Esports assets and also creative ways to get into the U.S. market. "

After a financing at $0.35, the now-trading company rests slightly above that as a relatively new and unknown entity—so far—which is why now is great opportunity participate in a smaller scale, yet leveraged, consolidation play. "We have a great opportunity to use our stock as currency, and then grow and scale companies through our team and resources," says Eghdami.

"We also have great investors and support, a very experienced board and management team and a clear vision of how we want to be that next gaming giant. The path has been shown by other Canadian gaming companies such as Amaya, and we want to follow that path and execute on our vision."

It's an ambitious plan: a CA$25 million market-cap company, $2 million in the bank, with a consolidation plan to attack a $1 trillion online industry. Yet FansUnite comes out of the gate with strong financial backing led by board member Shafin Diamond, CEO of Victory Square since 2015, a venture builder that builds start-ups in web, mobile, gaming, AI and AR/VR. Diamond has launched 40 start-ups in 24 countries, employed more than 350 people, and has generated over $100 million in annual revenues.

Eghdami says the immediate plan is to strengthen its UK presence with McBookie and focus on M&A activity, while continuing to develop its software platform.

The games are just beginning.

Knox Henderson is a journalist and capital markets communications consultant. He has advised for a broad range of small cap companies in the resource, life sciences and technology sectors for more than 25 years.

Disclosure:
1) 1) Knox Henderson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: FansUnite Entertainment Inc. My company has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with FansUnite. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of FansUnite, a company mentioned in this article.

( Companies Mentioned: FANS:CSE, )

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