GAN predicts record revenue to result from US gambling expansion

GAN predicts record revenue to result from US gambling expansion

Wednesday, September 19, 2018 Posted by News Team
No alternative text provided
Supplier highlights New Jersey and Pennsylvania as key areas of opportunity, dismisses fears over Italian gambling ad ban

iGaming software and service provider GAN says that it has performed in-line with expectations in the first half of 2018, but it expects the roll-out of sports betting and online gaming regulations across the US to drive the company to record revenues in 2019. 

The first half of the year saw the supplier benefit from a number of positive regulatory developments, namely the US Supreme Court’s decision to overturn the Professional and Amateur Sports Protection Act (PASPA) in May. 

It has already established a strategic partnership with SBTech, and launched with its partner Paddy Power Betfair’s FanDuel brand in New Jersey. GAN said the early success of online betting in the state may prompt others to regulate online betting and gaming. In the first 17 days since the September 1st launch, the supplier noted that the FanDuel offering had “exceeded initial expectations”. 

GAN has also launched an online casino for New Jersey’s Ocean Resort Casino in July, though the planned launch of a mobile gaming offering was been delayed with the state’s Division of Gaming Enforcement processing applications for sportsbook licences. Approval for the mobile launch was finally secured on September 4th. 

The supplier’s US offering will be bolstered further by the launch of online gaming in Pennsylvania, though this has also been subject to delays, and is now expected to go live early in 2019. This is likely to affect GAN’s revenue in the short-term, as it cannot realise professional service fees, such as those delivered to Parx Casino, until clients complete the commercial launch of iGaming products. 

Looking beyond the US, GAN has claimed that it is unlikely to see Italian revenue impacted by the incoming ban on gambling advertising, which comes into force from January 2019. Instead, it says, it could actually benefit from the ban, as its clients are predominantly land-based operators supported by online operations, meaning the land-based element will help keep the brands relevant while online-only operators cannot advertise. 

GAN will also launch its ninth Italian client in the fourth quarter of the year. Goldbet operates more than 1,000 land-based betting shops in Italy, alongside its online offering. 

It has also begun operational marketing for the Chickasaw Nation, the tribal gaming operator which is developing a Europe-facing online casino offering. The project was subject to delays due to operational and financial restructuring to ensure $10m of user acquisition marketing provided to GAN by the operator could be deployed efficiently.

Finally, GAN has seen client acquisition for its Simulated Gaming business impacted by resources being diverted to support its real-money gaming operations in the first half of the year. This will continue to slow the growth of the free-play business until GAN expands its Bulgaria-based software engineering team, due to be completed in H1 2019. 

Currently it operates Simulated Gaming for 13 US casinos, as well as for a consortium of land-based gaming venues in Queensland, Australia, under the Club8Casino brand. 

Despite these setbacks, the supplier said that the recent launch of online sports betting in the US, its current sales pipeline and existing contracted clients “are projected to propel GAN to record revenues, revenue growth, and EBITDA” in 2019.

The company is to report its results for the first half of 2018 on September 28th.

Latest
Finance

JPJ Group sees Jackpotjoy decline offset by Vera&John growth in Q3

Money

Stride Gaming subsidiary hit with £7.1m UKGC penalty

France

Stellar showing from sports betting drives French market growth

Casino

Swiss Casinos selects Playtech for online launch

Gaming Products & Services Directory

The essential directory for the gaming industry