GAN plc (“GAN” or the “Company”), an award-winning developer and
supplier of enterprise-level B2B Internet gambling software and
services in the United States and Europe, today provides an update
on trading for the half-year ended June 30, 2018.
GAN performed in line with market expectations during the first
half of 2018.
The outlook for the second half year period and full calendar
year 2018 is contingent on (a) the market size, share and growth
rate of Internet sports gambling in New Jersey; (b) the timing with
which Pennsylvania’s regulator the Pennsylvania Gaming Control
Board (“PGCB”) permits the launch of Internet real money gambling
for residents of the State of Pennsylvania; and (c) the speed with
which efficient marketing of the Overseas Internet Casino is
conducted in European regulated markets by GAN.
By way of outlook on 2019, the recent launch of Internet sports
betting, the Company’s current sales pipeline and existing
contracted clients are projected to propel GAN to record revenues,
revenue growth, and EBITDA.
GAN is due to release its half year result for the period ended
30 June 2018 on September 28, 2018.
PASPA / Regulatory Developments
With respect to online sports betting in the US, GAN welcomed
the repeal of the Professional and Amateur Sports Protection Act
1992 (“PASPA”) by the US Supreme Court on May 14, 2018. GAN has
subsequently integrated a leading B2B sports betting system into
GAN’s Platform and delivered Internet sports betting in New Jersey
to its client PaddyPower Betfair plc (“PPB”), branded ‘FanDuel’, on
September 1, 2018.
The reported success of the Internet sports betting market in
the first operating month of August 2018 may result in an increase
in the speed of regulation of intra-State Internet gambling going
forwards. It is believed that additional US States are now
considering the regulation of Internet gambling.
New Jersey Internet Gambling
Internet sports betting’s growth since launch on September 1,
2018 has exceeded initial expectations in the first 17 day
operating period. Continued growth is contingent on the speed with
which our client PPB phases in marketing investment and the
competitive dynamics within this emerging market.
GAN’s second client in New Jersey, Ocean Resort Casino (“ORC”)
opened the land-based casino in Atlantic City on June 28, 2018 and
the Internet casino delivered to ORC by GAN commenced operations of
its desktop-only website on July 10, 2018. The secondary launch of
mobile apps to enable end users to engage with ORC’s Internet
casino via their personal mobile devices has been delayed by the
New Jersey Division of Gaming Enforcement (“DGE”) technical
certification division due to the demand for certification of new
Internet sports betting systems.
Mobile apps are required to be downloaded by end users in order
for their physical location to be accurately determined in
compliance with New Jersey Internet gambling regulations. Mobile
casino gaming represents the substantial majority of Internet
casino gaming revenues in New Jersey. The mobile apps were approved
by the DGE on September 4, 2018.
Pennsylvania Internet Gambling
Pennsylvania’s real money Internet gambling market is now
expected to commence in early 2019. This delay, due to a
slower-than-expected issuance of regulations by the PGCB, impacts
GAN’s ability to recognise revenues derived from professional
services fees already generated by GAN year-to-date and similar
incremental professional service fees expected to be generated in
H2 2018 as preparations to launch our client Parx Casino’s Internet
gambling operations continue.
Such fee-based revenues from the professional services rendered
by GAN to its clients are recognised following the client’s
commercial launch of Internet gambling. Accordingly, revenue from
professional services delivered to Parx Casino in 2018 will now be
recognized in H1 2019.
This regulatory delay will also negatively impact GAN’s H2 2018
Net Revenue from the revenue-sharing aspect of GAN’s commercial
relationship with Parx Casino, the market-leading casino property
in Pennsylvania.
GAN has been a registered gaming services provider in
Pennsylvania since 2014 and successfully submitted its
Pennsylvanian Internet gambling software vendor license application
to the PGCB on September 17, 2018.
Italian Internet Gaming
GAN notes the recent legislative ban on advertising of gambling
in Italy which comes into effect in January 2019. GAN’s clients in
Italy are predominantly land-based operators of retail betting
shops as well as Internet gambling. Following consultation with
selected Italian clients and specialised gaming research firm
Eilers & Krejcik Gaming LLC1, Italian Internet gambling
operators supported by significant retail operations are not
expected to be materially impacted by the ban on advertising and
may benefit from reduced competition from Internet-only
operators.
As previously announced2, the Company will launch its 9th
Italian client GOLDBET in Q4 2018 which operates more than 1,000
land-based betting shops in Italy.
Overseas Internet Casino
Operational marketing of the Overseas Internet Casino in Europe
commenced on September 12 2018. This followed an extended period in
Q3 restructuring certain operational and financial arrangements to
ensure an efficient deployment of the previously-reported $10m in
user acquisition marketing provided to GAN by our client, the
Chickasaw Nation, to develop their Internet gambling business in
European regulated markets.
Simulated Gaming™
The acquisition of new US casinos as clients for GAN’s US-facing
Simulated Gaming business has been impacted by the increased
allocation of internal technical engineering resources towards real
money Internet gambling in H1 2018, which will continue to delay
incremental client acquisition until the previously announced
expansion of the Company’s software engineering team in Sofia,
Bulgaria has completed in H1 2019.
GAN’s client of Simulated Gaming, the Mississippi Band of
Choctaw Indians, was announced on April 30, 20183 and is now
anticipated to launch Simulated Gaming in Q4 2018.
As on June 30, 2018 GAN operated Simulated Gaming for 13 major
US casinos coast-to-coast together representing in excess of $8bn
in annual land-based gaming revenues as well as for a consortium of
land-based gaming venues in Queensland, Australia identified as
‘Club8Casino’.
Notice of Results
The Company will release its results for the half year period
ended June 30, 2018 on September 28, 2018.
FAQ’s about GAN’s Internet Gambling ‘Platform’ & US
Patent
- For investors and Industry analysts:
The core of a “Platform” from both a technical and regulatory
standpoint is the Player Account Management System i.e. where
highly sensitive customer and player activity data is stored and
processed. Other elements of Platform can include a sportsbook
transaction engine, gaming content integrations, payment services,
marketing services, trading services and other ancillary
activities. However, the core functionality to describe B2B systems
and services as a 'Platform' is the Player Account Management
System. This is also the layer of B2B activity which tends to
require regulatory approval as a 'Platform' since it is the focal
point of data and player security. Therefore, without the Player
Account Management System, a service provider might be offering
very valuable B2B functionality but not in the strictest sense a
'Platform' (source: Regulus Partners, an international gambling
advisory group).
- All US casinos operate an on-property
rewards program (also called ‘loyalty programs’) where visitors to
the land-based casino can enrol in a loyalty program, collect a
rewards card and accumulate reward points from real money gambling
on-property. Typically, US casinos have more than half of their
active on-property patrons enrolled in these reward programs.
- GAN’s US-patented technology
principally permits US casino operators’ carded patrons to link
their reward card to their online gambling account in order to
identify themselves as a patron of the land-based casino and a
member of their retail rewards program.
- The Patent was awarded to GAN plc in
September 2014 by the US Patent & Trademark Office (“USPTO”)
with the Patent reissued under the same Patent number by the USPTO
on March 17, 2017 following an unsuccessful ex parte challenge
brought by an anonymous US Industry actor.
Notes:
1 “The Italian gambling advertising ban is unlikely to impact
operators equally with online only firms expected to be more
significantly impacted by the blanket ban on all gambling
advertising in the country. As can be seen from the market share in
CY17 five of the seven largest operators in the iGaming market have
a substantial land-based presence and will look to use that brand
recognition along with cross- sell from land-based to online to
continue to grow their share post-ban.” Eilers & Krejcik Gaming
LLC, September 4, 2018
2
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/GAN/13606639.html
3
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/GAN/13622744.html
GAN | Overview
GAN is a leading B2B supplier of Internet gambling enterprise
software-as-a-service solutions to the US land-based casino
Industry. GAN is listed on the ESM Market of the Irish Stock
Exchange and the AIM Market of the London Stock Exchange under the
ticker: GAN
The Company has developed an Internet gambling enterprise
software system, GameSTACK™, which it licenses principally to
land-based US casino operators as a turnkey technology solution for
regulated real-money Internet gambling encompassing Internet gaming
& Internet sports betting and/or virtual Simulated Gaming.
GAN has fourteen (14) casino operators as clients of Simulated
Gaming coast-to-coast across the US and Internationally; two (2)
clients of real money Regulated Gambling in New Jersey; one (1)
client of real money Regulated Gambling in Pennsylvania and ten
(10) clients of real money Regulated Gambling in Europe.
The Internet Gambling System, developed in London under a UK
Gambling Commission license, is certified to the highest technical
standards currently required by gambling regulators. In April 2017
GAN was granted a Casino Service Industry Enterprise license by the
New Jersey Division of Gaming Enforcement being GAN’s first
privileged gaming license in the United States. In May 2018, the US
Supreme Court repealed PASPA and GAN confirmed the H2 launch of
sports betting for US clients integrated into GAN’s enterprise
software platform. In September 2018 GAN launched Internet sports
betting in New Jersey, available as an integrated option alongside
Internet gaming.
For more information please visit www.GAN.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180918005724/en/
GANDermot SmurfitChief Executive Officer+44 (0) 20 7292
6262dsmurfit@GAN.comorUS Investors: The Equity GroupAdam
Prioraprior@equityny.com212.371.8660orUK & Ireland
Investors: Walbrook PRPaul CorneliusGAN@WalbrookPR.com+44 20
7933 8780orDavy (Nominated Adviser, ESM Adviser and Joint
Broker)John Frain / Barry Murphy+353 1 679 6363orLiberum
(Joint Broker)Neil Patel / Cameron Duncan+44 (0) 20 3100
2000
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