GAN, the supplier of igaming services to the US and European land-based casino industry, has stated that regulatory delays in the US are set to have an impact on its results for the second half of this year.
After releasing results in line with expectations for H1 2018, with a 28 per cent increase in gross income to £23.8m (H1 2017: £18.6m), GAN produced a loss after tax of £2.9m (H1 2017: loss after tax of £2m).
With cash and cash equivalents standing at £5.1m, a subscription by new investors of 15m new shares raised gross proceeds of £7.5m and GAN elected to pay in full £2m in convertible unsecured loan notes 2022 issued by the company in April, 2017. Net assets as of June 30, 2018, stood at £12.3m (H1 2017: £9m).
GAN extended its platform deal with Paddy Power Betfair in New Jersey, announced a strategic relationship with SBTech to serve real-money sports betting to GAN's US casino operator clients and also signed a multi-year agreement with Goldbet, the Italian internet sports betting and casino gaming operator.
GAN has committed to a significant expansion of engineering resources principally in Sofia, Bulgaria, with secondary recruitment in Las Vegas, Nevada in order to meet existing and expected demand for internet gambling services, particularly with regard to sports betting in the US.
However, the company’s performance in the second half of the year will depend much on the growth of sports betting in New Jersey and the speed with which the Pennsylvania Gaming Control Board permits the launch of gambling for the state’s residents.
A total of 61 per cent of GAN’s net revenue in H1 2018 was derived from the US, with 38 per cent from Italy.
Dermot Smurfit, CEO of GAN, said: “Regulatory delays will impact US real money gaming results in H2 2018, but we will continue to invest in resources to prepare for 2019 and beyond.
“GAN's prospects for 2019 and beyond in real money gambling are very encouraging given the initial results from the launches of internet sports for Paddy Power Betfair’s FanDuel Group in New Jersey, internet gaming for Ocean Resort Casino in New Jersey, and the start of customer acquisition marketing for overseas internet casino.
“By way of outlook on 2019, the recent launch of internet sports betting, the company's current sales pipeline and existing contracted clients are projected to significantly enhance GANs revenue and EBITDA prospects.”
