GAN plc (“GAN” or the “Company”) a leading B2B supplier of
Internet gaming enterprise software-as-a-service solutions to the
US land-based casino Industry, provides an update on trading for
the year ended December 31, 2017.
GAN performed in line with market expectations during the second
half of 2017 in both its real money Regulated Gaming and Simulated
Gaming activities due to the launch of several new clients,
including the launch of the Overseas Internet Casino2. During the
period, the Company benefited from strict cost management and
generated positive clean EBITDA1 for the full year 2017.
Furthermore, the outlook for 2018 remains positive due to continued
growth in real money Regulated Gaming and Simulated Gaming.
Regulated Gaming
In Italy, growth in Net Revenue experienced during H1 has
continued into H2 where the Company has benefitted from the
seasonally strong Q4 period.
In New Jersey, GAN’s business continues to enjoy favourable
market conditions and performed strongly in 2017. In H2 2017, GAN
signed a multi-year agreement with AC Ocean Walk LLC which will be
GAN’s second client for real money Regulated Gaming in New Jersey.
AC Ocean Walk LLC is the newly-announced owner-operator of Ocean
Resort Casino for the launch of a real money Regulated Gaming
online experience offering Internet casino gaming together with
Internet sports betting integrated with the on-property rewards
program in reliance on GAN’s Patent3. This new Internet gaming
destination is currently expected to launch in H1 2018 and will
contribute materially to GAN’s revenue and earnings in H2 2018.
Ocean Resort Casino in Atlantic City New Jersey is the substantial
casino property formerly known as TEN/Revel Casino.
In Europe, the identity of GAN’s client for the Overseas
Internet Casino2 can now be confirmed as the major Native American
US casino operator Chickasaw Nation. The Overseas Internet Casino
launched for the Chickasaw Nation was delivered in H2 2017 and is
now available in regulated European markets at www.WinStar.com.
In Pennsylvania, regulation of real money Internet gaming
occurred on October 30, 2017. GAN has served Simulated Gaming to
Pennsylvania’s market-leading land-based US casino Parx Casino with
GAN’s GameSTACK™ enterprise gaming software platform installed
on-property at Parx Casino since 2015 and is currently preparing to
deliver real money Regulated Gaming upon commencement of the
Pennsylvanian Internet gaming market anticipated later in 2018.
Simulated Gaming™
GAN’s US-facing Simulated Gaming business continued to benefit
from the launch of several new US casino operator clients in 2017
including Ocean Resort Casino (formerly TEN/Revel Casino),
Chickasaw Nation’s WinStar World Casino, MGM’s The Borgata, Oneida
Nation’s TurningStone and Station Casinos.
As on December 31, 2017 GAN operated Simulated Gaming for 12
major US casinos coast-to-coast (December 31, 2016: 8) together
representing in excess of $8bn in annual land-based gaming revenues
as well as for a consortium of land-based gaming venues in
Queensland, Australia identified as ‘Club8Casino’.
Regulatory Progress
On October 30, 2017 the State of Pennsylvania regulated Internet
gaming becoming the fourth US State to regulate Internet gaming and
the first new State to regulate Internet gaming since 2013.
Additional US States are now considering the regulation of Internet
gaming including Illinois, New York and Michigan.
With respect to online sports betting in the US, GAN welcomes
any potential repeal of the Professional and Amateur Sports
Protection Act 1992 (“PASPA”) by the US Supreme Court and has taken
preparatory steps to deliver a managed sports betting solution to
its US clients via GAN’s GameSTACK™ enterprise gaming software
platform in partnership with a leading European B2B sports betting
system and services provider SBTECH (as announced previously by the
Company on January 15, 2018).
Patent
The US Patent3 comprises multiple claims principally for linking
on-property rewards accounts held within casino management systems
to patrons’ online accounts held within an Internet gaming system
and delivering a converged online-to-onproperty experience for US
casino patrons. This Patent has now been licensed more than a dozen
times by GAN to major US casino operators for the conduct of both
real money Regulated Gaming and Simulated Gaming in the United
States.
The Patent was subjected to an ex parte re-examination process
which successfully concluded in 2017 in favour of GAN with the
issuance of a certificate by the United States Patent and Trademark
Office (“USPTO”) confirming the validity of GAN’s claims within the
Patent.
GAN has now placed a selected number of US casino operators on
notice of GAN’s Patent and associated intellectual property and
anticipates concluding commercial licensing arrangements which
shall contribute to GAN’s revenue and earnings in 2018.
Notice of Results
The Company will release its results for the year ended December
31, 2017 on March 29, 2018.
Management Commentary
Dermot Smurfit, CEO of GAN commented on the 2017 period:
"The Company generated positive clean EBITDA1 in H1 2017
following a substantial multi-year period of investment focused on
the US land-based casino Industry. This favourable EBITDA trend has
continued throughout H2 and we have delivered on the market’s
expectations to generate positive EBITDA for the full calendar year
2017.”
1Clean EBITDA is a non GAAP Company specific measure and
excludes interest, tax, depreciation, amortisation, share based
payment expenses and other items which the directors consider to be
non-recurring and one time in nature.
2Overseas Internet Casino to be delivered by GAN to an anonymous
US casino operator and existing client of Simulated Gaming was
previously announced by GAN plc on September 12, 2016.
3Network Gaming System and Casino Management System Link, patent
number 8,821,296 (“the Patent”), issued to GAN by the United States
Patent and Trademark Office (“USPTO”) on September 2, 2014.
FAQ’s about US regulation & GAN’s real money online
Regulated Gaming
- In the event PASPA is overturned by
SCOTUS in H1 2018 the US market opportunity for retail, online and
mobile sports betting deployed on-property and online is expected
to exceed $6bn by 2023 (source: Eilers & Krejcik Gaming, LLC
November 2017).
- Internet gaming was effectively
out-lawed in the United States during October 2006 by the Unlawful
Internet Gaming Enforcement Act by prohibiting financial
institutions from processing Internet gaming payments.
- In 2013 three (3) US States passed laws
to regulate Internet gaming within their borders: Nevada (pop.
2.8m), Delaware (<1m) and New Jersey (8.9m) comprising a total
of 12.6m people representing less than 4% of the US population
(324m). In the neighbouring State of New Jersey (pop. 9m) the
Internet gaming market commenced in November 2013 and generated
$197m in gross Internet gaming revenues in calendar year 2016
representing 8.2% of the $2.4bn in land-based gross gaming revenues
generated by New Jersey’s eight (8) casino properties operational
in full or in part throughout 2016.
- Both New Jersey and Pennsylvania have
passed legislation enabling existing Internet gaming operators to
launch Internet sports betting in the event PASPA is overturned by
SCOTUS.
- Pennsylvania has a population of 12.8m,
which more than doubles the number of Americans, who will be
legally permitted to wager real money on Internet casino games
following the commencement of Regulated Gaming in the State of
Pennsylvania, anticipated in the first half of 2018.
- Real money online Regulated Gaming for
GAN comprises wholly-regulated and US-compliant Internet gaming
where end user players resident in wholly-legal jurisdictions
deposit & wager real money while playing casino games
online.
- GAN received its first full US gaming
licence in April 2017 awarded by the State of New Jersey.
GAN | Overview
GAN is a leading B2B supplier of Internet gaming enterprise
software-as-a-service solutions to the US land-based casino
Industry. GAN is listed on the ESM Market of the Irish Stock
Exchange and the AIM Market of the London Stock Exchange under the
ticker: GAN
The Company has developed an Internet gaming enterprise software
system, GameSTACK™, which it licenses principally to land-based US
casino operators as a turnkey technology solution for both
regulated real-money and/or virtual Simulated Gaming. GAN has
thirteen (13) casino operators as clients of Simulated Gaming
coast-to-coast across the US and Internationally; two (2) clients
of real money Regulated Gaming in New Jersey; one (1) client of
real money Regulated Gaming in Pennsylvania and ten (10) clients of
real money Regulated Gaming in Europe.
The Internet Gaming System, developed in London under a UK
Gambling Commission license, is certified to the highest technical
standards currently required by gaming regulators. In April 2017
GAN was granted a Casino Service Industry Enterprise license by the
New Jersey Division of Gaming Enforcement being GAN’s first
privileged gaming license in the United States.
For more information please visit www.GAN.com
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180123006135/en/
GANDermot Smurfit, +44 (0) 20 7292 6262Chief Executive
Officerdsmurfit@GAN.comorUS Investors: The Equity GroupAdam
Prior, 212-371-8660aprior@equityny.comorUK & Ireland
Investors: Walbrook PRPaul Cornelius, +44 20 7933
8780GAN@WalbrookPR.comorDavy (Nominated Adviser, ESM Adviser and
Joint Broker)John Frain / Barry Murphy+353 1 679
6363orLiberum (Joint Broker)Neil Patel / Cameron Duncan+44
(0) 20 3100 2000
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