1 on 1: Dermot Smurfit on GAN’s move west
1 on 1: Dermot Smurfit on GAN’s move west
Social casino provider GAN received a vote of confidence towards the end of August when major shareholder Dermot Desmond, Irish billionaire and one-time owner of Betdaq, took up a large placing of shares in the company.
The company pivoted in 2015, with chief executive Dermot Smurfit relocating to Las Vegas and its focus of operations now concentrating on providing social casino and simulated casino services to US land-based operators. The company is making headway both with tribal and commercial casino concerns, announcing deals in August with the Chickasaw Nation and with regional casino operator Isle of Capri.
With £1.3m in the bank from the share sale, Smurfit tells TotallyGaming.com how he intends to use the cash to press home the company’s message both in the US and back in Europe.
Totally Gaming: Dealing first with the new investment, you must be pleased to receive the vote of confidence from a major shareholder - what will the new cash be used for?
Dermot Smurfit: Principally to accelerate delivery for existing clients (new product features) and launching new clients. Yes, that means more people, but the costs are manageable through the recent opening of our Sofia offices where we now have our first GAN employees in place and beavering away.
TG: Can you give us some colour on how you view the simulated/social gaming opportunity in the US - you have racked up quite a few deals now, what do you think is the size of the opportunity?
DS: There are two components; we believe 50% plus of casino patrons are already playing multiple social casinos online today. If all US casinos had a GAN Simulated Gaming product and service we think these patrons would spend $250m per annum. However, with recent product upgrades, most visible on LadyLuck.com delivered for Isle of Capri, we can also permit our US casino clients to tap into the global social casino market, if they're willing to invest in user acquisition.
TG: GAN has effectively pivoted - why did you opt to move to the US personally and what do you think being based there does for the company?
DS: Being in Las Vegas brings you professionally into the heart of the US casino industry. Many US casinos make repeated visits every year, so your existing and prospective clients are routinely on your doorstep. Living there gives you insights you can't gain through repeated visits from Europe, and to an extent you're taken more seriously by the market by having human, office and technical infrastructure deployed as a long-term investment.
TG: The social gaming/casino market in the US has seen a few developments in recent months - the Playtika sale and the Penn National Rocket buyout - what do you think these moves say about the market at present?
DS: It’s hard to comment on Caesars. More generally I think major US casinos may choose to build, buy or rent technology to enter the lucrative social casino gaming market (and product verticals adjacent thereto). We're the number one choice if someone wishes to rent and build organically versus placing a huge one-off financial bet by making an acquisition. Only time will tell which approach will deliver the best value for shareholders.
TG: How do you view the progress of further state-by-state real-money online gaming in the US? How is GAN positioned for further de-regulation?
DS: Pennsylvania looks promising, as does the often-overlooked Michigan and even Nevada is twitching about online casino gaming. California remains troubled and New York may well make a move next year, albeit online poker only. So, things are happening finally after a near-three year wait.
TG: What opportunities is GAN viewing further afield? What are your remaining ambitions as a business in Europe?
DS: We see continued opportunity for content delivery in Italy and potential for US casinos to enter Europe's dotcom markets through GAN.
Totally Gaming says: The social casino space is as busy as it has ever been and Smurfit is surely right to have decamped personally to Las Vegas where he can hope to sell the company’s service provision to the wider land-based casino sector in the US. The slow progress of state-by-state legislation remains a handicap, but as Smurfit says, there are signs – finally – of more states following in the footsteps of New Jersey, Nevada and Delaware.