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GAN reiterates 2020 forecast despite Covid-19


Gambling software supplier GAN has reiterated its confidence in its 2020 forecast, which projected revenue of $37m-$39m, even as the novel coronavirus (Covid-19) affects its sports betting vertical.

This came alongside the developer’s 2019 results, which revealed a 114% year-on-year increase in revenue, to $30.0m for the year, as well as the signing up of Penn National Gaming and Michigan’s Sault Tribe of Chippewa Indians as its latest clients.

GAN said that, as of March 12th, online sports betting revenues had exceeded expectations. Even considering the suspension of all major sports from mid-March, revenue for the vertical is projected to come in ahead of target.

Gross operator revenue for Q1 is expected to grow 15.9% to $140m. This is mostly driven by a 341% year-on-year increase in gross operator revenue from US online casino.

GAN has also seen an increase in activity in its simulated gaming vertical after what it described as “unprecedented marketing promotion” by the majority of its land-based casino clients in the US. All have been forced to close due to the Covid-19 pandemic.

Although it didn’t reveal how much revenue was generated from free-play gaming, the supplier did say that its largest casino client saw an 86% increase in simulated gaming activity compared to the monthly average.

In Italy, meanwhile, GAN reported significant increases in betting activity, with 17.6% more Italian online bets processed in the past 24 days than the equivalent period last year.

“The recent global pandemic has caused immense tragedy for so many affected by the virus and significant disruption to a multitude of business operations,” GAN chief executive Dermot Smurfit said.

“Our thoughts are with all these people. We are extremely fortunate to be an online-only business in the wake of the social distancing mandated by governments around the globe and especially in our key markets of Italy and the US.

“GAN will be doing all it can to ensure responsible as well as responsive operations during this tragic and difficult period.”

The supplier also provided further details about its 2019 performance, after announcing in January that it expected to surpass its financial forecasts.

GAN made $30.0m in revenue for the year, up 114% year-on-year. Earnings before interest, tax, depreciation and amortisation (EBITDA), is projected to improve from a loss of $1.7m in 2018, to a profit of $8.4m.

Pre-tax income came to $2.4m, up from an $8.6m loss in 2018 and net profit totalled $1.8m, up from a $7.7m loss in 2018. The business ended the year with assets worth $26.1m.

The supplier’s board said its upcoming Nasdaq listing is still going ahead as planned, with a shareholders meeting scheduled for 31 March. The business submitted a draft registration statement to the Securities and Exchange Committee in February.

“Despite recent market turmoil, our equity capital markets strategy remains to secure the company’s Nasdaq listing next month, subject to market conditions, as we firmly believe that our growth opportunity in the US remains intact, albeit in a differently weighted product mix throughout the balance of 2020,” Smurfit said.

“As directors we will act in the best interests of all shareholders in considering the merits of any capital raising activity consequent to the Nasdaq listing and in light of the recent share price movements we will remain highly sensitive to the issue of shareholder dilution.

“The company’s resilience during this difficult time should meaningfully resonate with investors that seek to diversify their exposure to our rapidly growing end markets with our online-only products and capabilities.”

The supplier also said it had secured two new clients: Penn National Gaming and the Michigan-based Sault Tribe of Chippewa Indians.

Penn National Gaming, which acquired media brand Barstool Sports last month, operates 39 gaming facilities in 18 states.

The Sault Tribe operate Kewadin Casinos, a chain of five casinos in Michigan’s upper peninsula, with a further location proposed in the state capital of Lansing.

GAN said it would work with the Sault Tribe and “an anonymous existing client,” for which GAN provides simulated and real-money gaming already, in order to offer “substantial internet gaming operations” starting in early 2021.