Gaming technology provider GAN saw revenue grow in 2020, but higher expenses led to a loss of $20.2m.
Revenue for the 12 months to December 31 amounted to $35.2m, up 17.3% from $30.0m in the previous year.
Real-money internet gaming (RMIG) remained by far the main source of income for GAN, with revenue from these operations climbing 5.8% year-on-year to $25.6m as a result of new client launches.
GAN noted that last year’s RMIG revenue total included the impact of an existing partnership with the WinStar World Casino brand in Europe, but the Chicksaw Nation ended this deal in 2020. Excluding this impact, RMIG revenue was up by 28.0%.
In terms of simulated gaming, revenue here increased 66.7% to $9.5m, helped by four new client launches, most notably with Penn National Gaming.
GAN signed a total of six new client partnerships in 2020 – two within is RMIG business and four for simulated gaming – and secured seven new client deals, including an agreement with Wynn Resorts 10-year deal in Michigan and a multi-state deal with Churchill Downs.
Shortly after the year end, GAN completed its $167.6m acquisition of Coolbet and has since secured its first sportsbook deal for the brand with an existing client in Virginia.
“2020 was a highly successful, foundation-building year for GAN,” GAN chief executive Dermot Smurfit said. “We expanded our top-line, doubled our new client launches, signed numerous new customers that we believe will support stable and growing recurring revenue, and rounded out our product portfolio through multiple new content partnerships and the acquisition of Coolbet.”
However, alongside this increase in revenue, GAN reports a significant rise in operating costs, with the provider spending a total of $54.6m up 99.3% year-on-year.
The largest increase in spending came with general and administrative costs, which almost trebled from $8.4m in 2019 to $24.8m in 2020.
Higher spending meant GAN posted an operating loss of $19.5m, compared to a $2.6m profit in the previous year. After accounting for $392,000 in other costs, loss before tax stood at $19.9m, in contrast to a $2.6m profit in 2019.
GAN paid $353,000 in income tax, meaning it ended the year with a total net loss of $20.2m, compared to a $2.0m profit at the same point in the previous year.
However, Smurfit remained optimistic about the year ahead, highlighting the new sportsbook deal in Virginia, as well as recent launches with a number of clients in Michigan.
“We have the right strategy, an industry leading platform that we enhance each and every day, and a strong financial position that will support our growing recurring revenue-based model and help us drive long-term value for our shareholders,” Smurfit said.
GAN also published figures for its fourth quarter, during which revenue fell by 16.8% to $8.9m. RMIG revenue was down by 35.5% to $6.0m, but simulated gaming revenue more than doubled from $1.4m to $2.9m.
Operating costs increased 142.3% year-on-year to $17.2m in Q4, resulting in an operating loss of $8.3m, compared to a $3.5m profit in 2019.
When including other costs, loss before tax was also $8.3m, and after accounting for $34,000 in tax payments, net loss for Q4 was $8.3m, in contrast to a profit of $3.4m in the previous year.
Looking ahead, GAN forecast a significant increase in revenue for 2021, saying it expects to achieve between $100.0m and $105.0m in revenue, including up to $25.0m in Q1.