GAN set to beat 2018 projections after strong second half

Igaming platform and software provider GAN has said that it expects revenue for 2018 to come in ahead of market expectations after the business was boosted by a strong performance in the second half of the year.

Total revenue from the year is now expected to come in between £10.5m (€12.1m/$13.8m) and £11.3m, up from £9.1m in the supplier’s 2017 results. This, it said was driven by growth in real-money igaming, which helped H2 revenue grow 40% from the prior half-year period.

Recurring revenue accounted for around 85% of total half-year revenue, with two-thirds of the total coming from the key US market.

GAN said the launch of online sports betting in the US had exceeded expectations in the first 143 days since New Jersey took its first bets over the internet, to January 21. It highlighted the positive impact of the launch in a trading update for the fourth quarter of 2018, revealing that gross operator revenue was up 56.4% quarter-over-quarter, with active player days rising 50.6% to 4.6m for the period.

In 2018 GAN expanded its presence in New Jersey, powering the launch of the newly-opened Ocean Resort Casino’s igaming offering, which went live on July 10. It has also prepared for the launch of online casino in Pennsylvania though deals with Parx Casino and Paddy Power Betfair’s FanDuel Group.

This has been complemented by growth in simulated gaming, with existing clients such as the Chickasaw Nation’s WinStar World Casino and Resort in Oklahoma and the California-based San Manuel Band of Mission Indians both said to be performing well. Simulated gaming was also launched for the Mississippi Band of Choctaw Indians in Q4, with 13 clients active in the vertical by the end of the year.

The supplier has also launched a European-facing offering for the Chickasaw Nation, targeting regulated markets on the continent. GAN said that it would be able to provide a more detailed overview of the WinStar-branded product’s early performance when it publishes its 2018 results on March 29.

While Italian online operators are facing an uncertain period as a result of the country’s ban on gambling advertising, GAN said the move actually favoured its clients in the country, with many operating retail gaming. The Italian business performed in-line with expectations, the supplier said, with growth continuing over the winter months.

GAN also revealed that it has put a selected number of US casino operators on notice of its patent for linking on-property rewards accounts with player igaming accounts. This, it said, would force the operators that were infringing on its patent to strike licensing agreements to use the solution, further contributing to 2019 revenue and earnings.

Despite projecting an earnings before interest, tax, depreciation and amortisation loss of between £1.0m and £1.5m for 2018, the supplier added that it holds £5.3m in cash as of December 31, 2018, with no debt. The EBITDA loss was attributed to investment in technical development resources to launch clients in West Virginia, Pennsylvania and New Jersey in H1 2019.

“We are delighted with our performance in 2018, which sets us up for strong growth in our business in 2019,” GAN chief executive Dermot Smurfit (pictured) commented. “Our intellectual property and technical expertise put us at the forefront of the internet sports betting and casino gaming market as demonstrated by our strong client base.

“Our recent contract announcements and expectation for further legislation to pass in new States in the US means that 2019 is set to be a very exciting year.

“We exceeded market expectations for revenue growth in 2018, having successfully launched Internet Sports betting in New Jersey,” Smurfit continued. “Our successful £ 7.5 million fund raising has enabled us to rapidly deliver for our clients and repay £2M in short term debt. Going into 2019, we are strategically well placed to deliver profitable growth in 2019.”