March 2, 2022 -- InvestorsHub NewsWire -- via NetworkNewsWire
Editorial Coverage: When Congress made sports gambling
illegal at the federal level with the passage of the Professional
and Amateur Sports Protection Act (“PASPA”) on Oct. 28, 1992,
online betting wasn’t even a topic of discussion. If someone wanted
to place a bet on the Super Bowl or a basketball game, their
options were minimal at best: jump on a plane to Las Vegas or phone
their local bookie. Fast forward 25 years and the internet is
ubiquitous and laws such as PASPA arcane, making May 14, 2018, a
day of gambling liberation, as the Supreme Court overturned the law
on the grounds it was unconstitutional and commandeered power from
states. With the federal ban removed, the majority of states have
enacted laws defining legal online gambling to participate in a
booming global market. As such, innovation is thriving to offer
operators and consumers premium experiences. Playgon
Games Inc. (TSX.V: DEAL)
(OTCQB:
PLGNF) (Profile) is seizing the opportunity,
while others in the space, including Boyd
Gaming Corporation (NYSE:
BYD), MGM
Resorts International (NYSE:
MGM), Caesars Entertainment Inc.
(NASDAQ:
CZR) and Zynga Inc. (NASDAQ:
ZNGA) also look to capitalize on the momentum
building behind online gaming.
- In 2023, online gambling is forecast to reach $92.9 billion,
contributing to total gambling revenue worldwide that is expected
to reach $525 billion.
- A SaaS company, Playgon develops and licenses its software
platform and portfolio of games, which include streaming HD live
dealer games and a slate of electronic table games.
- Since launching overseas last spring, Playgon has onboarded 30
operators to date, processing tens of millions of dollars in bets
each month.
- Funded, partnered with a unit of betting giant Bally’s, and
working with Duane Morris LLP, Playgon is prepared to enter the
lucrative U.S. markets in the near term.
Click here to view the custom infographic of
the Playgon Games Inc. editorial.
Online Gambling Growth Outstripping Broad
Market
Statistics make the opportunity crystal clear. In the United
States alone, commercial gaming revenue totaled $52.99 billion in
2021, smashing the record set in 2019 by 21%, according to the
American Gaming Association’s Revenue
Tracker. Last year’s revenue was a 77% improvement over 2020, a
year rattled by the COVID-19 pandemic, which caused casinos to be
shuttered for months. The pandemic taught operators a harsh lesson
about the importance of offering online gambling, a trend that was
already accelerating before COVID ravaged the world.
Globally, online gambling growth is outstripping traditional
gambling. Online gambling, also called iGaming, involves any
internet-based betting on games of chance, including sporting
events, skill games (i.e., blackjack) or virtual slot machines. In
2019, total iGaming revenue reached $58.9 billion, a figure
expected to climb to $92.9
billion in 2023. Within that market segment, mobile online
gambling is expected to jump from $24.8 billion to $42.5 billion
from 2019 to 2023.
Still, these figures are just scratching the surface of the
upside potential considering total gambling revenue (both land
bases and online) is forecast to total $525 billion next year. The
revenue opportunity is not being overlooked by casino operators,
which are going all in to get a slice of this booming market. U.S.
regulators are also being supportive, with more than 30 states
ditching moribund laws prohibiting online gambling in favor of new
ones that have launched or will launch new betting markets.
New Guy in the Oligopoly
Gaming operators don’t build their own tech; they rely upon what
is ultimately a very select group of Software-as-a-Service (“SaaS”)
companies for the technology infrastructure undergirding their
gambling products. By large, the live-dealer market is dominated by
Playtech, Evolution Gaming and Microgaming. Playgon
Games Inc. (TSX.V: DEAL)
(OTCQB:
PLGNF) is the savvy upstart that is disrupting
the industry with its leading-edge technology with different
aesthetics and an emphasis on mobile devices.
Incumbents generally offer generic, similar-looking products
focused on desktop and laptop computers. Clearly differentiated,
Playgon is using a business-to-business (“B2B”) strategy to provide
a multitenant gateway allowing online operators the ability to
offer their customers cutting-edge iGaming software solutions that
outclass the stale competition. Playgon prides itself on
innovation, modernizing live dealer games while developing mobile
designs with a superior UI (user interface) and UX (user
experience).
By keeping its attention on businesses for customers rather than
the end consumer, Playgon doesn’t have to deal with high customer
acquisition costs that stifle profit margins. Its model is to
develop and license its software platform and games portfolio to
operators. The current slate includes four live dealer casino games
and four multiplayer e-table games as well as Daily Fantasy Sports
products. Playgon is also in the process of launching nine new
e-table games that will include Oddsup Roulette, Hold’em and
Multiplayer Blackjack, among others. Security is a top priority
with Playgon, which built its platform to include seamless
integration in any operator’s system with zero risk to sensitive
customer information.
Taking Live Dealer Games to a New Level
Playgon’s live dealer games, comprised of Blackjack, Baccarat,
Roulette and its proprietary Tiger Bonus Baccarat(TM), stand alone
with respect to appearance and functionality as the most advanced
in the market. The design team paid attention to details and
ensured that it could meet the demands of every customer, including
using ProgressiveWeb App technology to make the platform both
device and store agnostic. Distancing itself from peers with an
enhanced UI and UX, Playgon’s customers are likely to attract the
most desirable player demographic: those who will return
remotely.
Playgon appears to have thought of everything down to the
minutiae. The company even designed its games to be played in
portrait mode only, based on its research that more than 85% of
mobile use is in portrait mode, allowing gamblers to remain engaged
in their games one-handed on a mobile phone. Connectivity being
critical, Playgon built the architecture on the cloud, delivering
robust, scalable, high-speed play. Add in the realistic graphics
and HD live-dealer streams and it shouldn’t be much of a surprise
that Playgon is attracting not only online operators but also
casinos, sportsbooks and big database firms.
It’s not easy trying to penetrate a market that is controlled by
only a few players and regulated to the hilt. Playgon has navigated
this environment remarkably quickly to clear barriers to entry,
underscored by its vetted and proven technology, which is resulting
in a rapidly growing customer list. It has only been about one year
since Playgon officially planted its flag in the market with the
receipt of a Malta Gaming
Authority license last March. Its first license paved the
way for partner SWINTT Malta Ltd, a fast-growing iGaming content
supplier and subsidiary of Glitnor Group, to begin offering the
Playgon product suite to its online gaming operator customers.
An “if you build it, they will come”-type of scenario has ensued
with an influx of international deal flow. June was a big month
featuring Playgon going live in South Africa via its partner,
Intelligent Gaming (“PTY”) Ltd. At the time, six
operators were onboarded, hosting more than 220,000 bets
and 6,000-plus unique visitors in the first month of operations. By
month’s end, a seventh operator was onboarded.
By August, 14 operators were using Playgon’s
Vegas Lounge live-dealer platform. In September, SWINTT
onboarded three more operators, and then things really heated up as
the company kept scaling. In October, the number of live operators
was 23, and Playgon’s platform had surged to $54
million in player betting turnover in the first half of
the month, up from $1.6 million for the entire month of September.
From October through January, another seven operators were brought
onboard, upping the international client count to 30.
Veteran Team Leading Charge into U.S.
Market
With international sales humming along, Playgon is eying the
lucrative U.S. marketplace. Leading the team is CEO Darcy
Krogh, a seasoned iGaming industry veteran with two-plus
decades of senior-level management experience. He was a founder of
iGaming trailblazer Chartwell Technology in 1999, which he sold to
Amaya Gaming Group in 2011. Following the sale, he served as vice
president of Amaya where he was instrumental in the sale of the
company’s business-to-business assets to NYX Gaming Group in
2015.
The team also includes Guido Ganschow as president of Playgon
Interactive. Ganschow is recognized globally as an authority in
developing real-time, live-dealer tech and platforms on the back of
successful designs, builds and launches of state-of-the-art systems
in Europe and Asia.
Steve Baker, Playgon chief operating officer, brings decades of
operational and M&A experience to Playgon, having served as VP
of operations for Shaw Communications where he oversaw sales rising
from $300 million to $2.8 billion.
The acumen of the team is evidenced in the stellar international
growth and domestic growth that should easily follow. Playgon has a
major player as a partner to backstop the move into the U.S.
after teaming with
Solid Gaming, a business of global casino-entertainment company
Bally’s Corp. Bally’s, which generated $1.3
billion in revenue last year, owns 14 casino across 10
states. After months of collaboration and testing to customize and
integrate Playgon’s tech to guarantee performance in the Bally’s
ecosystem, Playgon received the highest of acclaim and is now live
with Solid Gaming.
To keep expanding, Playgon set out in October to raise $5
million through a private placement. Owing to strong interest, the
company more than doubled its original target to
raise $10.5
million, capital that should increase Playgon’s
velocity into the American markets.
As has become a theme, Playgon is steadfast in its aggressive
growth model. The company contracted Duane Morris LLP to represent
it in its application process to license its live-dealer technology
in legal markets throughout the country. Intentions are to first
seek licenses in New Jersey, Pennsylvania and Michigan, with other
states to follow. The company has plenty of potential clients to
showcase its tech, as the U.S. is home to nearly 900 casinos.
Online Is the Place to Be
Companies of all types are looking to the online gambling market
as a driver for the top and bottom lines going forward. These
companies are jockeying for share and looking to strengthen their
positions to capitalize on the burgeoning markets locally and
across the planet.
Boyd
Gaming Corporation (NYSE:
BYD), a geographically diversified operator of 28
gaming entertainment properties in 10 states and 5% equity owner of
sports-betting and iGaming operator FanDuel Group, finished
2021 with record quarterly performances across every
segment of its operations. Boyd reported fourth-quarter 2021
revenues of $879.8 million, up 38.4% from $635.9 million in the
fourth quarter of 2020. The company reported net income of $109.8
million, or $0.96 per share, for the fourth quarter of 2021,
compared to $83.3 million, or $0.73 per share, for the year-ago
period.
MGM
Resorts International (NYSE:
MGM) and BetMGM, its sports betting and iGaming
operator, have teamed up
with SportsGrid, the nation’s first and only 24-hour sports
wagering streaming network. The two forged a strategic partnership
in February concentrating on integrating BetMGM content across
SportsGrid’s original, live programming. The content will be
supported by television and social media advertising.
Caesars Entertainment Inc.
(NASDAQ:
CZR) moved with a purpose following law changes
to allow online betting in New York. Named one of the first
operators to receive a license for mobile sports-wagering
operations in the state, Caesars made history with its online and
mobile sports betting app, Caesars Sportsbook, accepting its first
sports wagers in the Empire State during January.
Zynga Inc. (NASDAQ:
ZNGA) became famous for Farmville, but the social
game developers have actually had a number of hits, including Zynga
Poker. In January, Take Two
Interactive agreed to pay $12.7 billion to acquire Zynga.
Take Two paid a 64% premium to the value of the company the day
before the deal was made public in order to establishe itself as
one of the largest publishers of mobile games, the fastest-growing
segment of the interactive entertainment industry.
As big as the online gaming market is today, it is only just
getting started as it moves towards making up 20% of the overall
gambling market. The pandemic opened everyone’s eyes to the
opportunity at hand as the trend gains steam to keep fueling demand
going forward.
For more information about Playgon Games,
please visit Playgon
Games Inc.
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