GAN narrows pretax losses as it continues to tackle US market
Revenue rises as GAN signs up new casino clients
Internet gaming software firm GAN narrowed its pretax losses in 2017 as revenue rose and the company continued to make inroads into the US market.
The company, which provides internet gaming enterprise software as a service to land-based casinos in the US, said losses for the year ended December 2017 were £4.2 million (€4.8 million) compared with £5.2 million a year earlier. Losses per share were 5 pence.
GAN increased its gross income by 30 per cent to £41.1 million, with net revenue up 17 per cent to £9.1 million. Earnings before interest, taxation, depreciation and amortisation were £500,000, compared with a loss of £900,000 a year earlier.
Distribution costs, which include royalties payable to third parties, direct marketing expenditure and the direct costs of operating the hardware platforms deployed across the business, rose from £7.4 million in 2016 to £8 million last year. The firm said the increase was due primarily to increased royalties to games content providers in Europe for real money gaming and in the US for Simulated Gaming.
Total administrative expenses for the year were slightly down, falling £100,000 to £5.5 million. This was despite a £200,000 foreign exchange loss due to the weakening of the US dollar during the year.
“2017 saw GAN deliver its first full year of positive EBITDA since 2013 following a lengthy investment cycle to position GAN as a market leader in the US casino Industry delivering Internet gaming solutions for real money Regulated Gaming and Simulated Gaming which is deployed in advance of regulation. GAN’s performance to date in 2018 is in line with our expectations,” said chief executive Dermot Smurfit. “GAN has continued to position its business to capture growth in emerging online gaming markets in the US.
During the year, the firm launched simulated gaming for five new US casino clients, and signed up two US casino clients for real money regulated gaming in New Jersey and European markets, respectively. October also saw legislation introduced in Pennsylvania that would allow residents to play real money Internet casino games, starting from the second half of 2018.
“We are increasingly confident in the long-term prospects for intra-State real-money gaming in the US and believe Pennsylvania may now serve as a catalyst for other US States to regulate Internet gaming and, in the event the US Supreme Court ruling lifts the long-standing Federal ban, the incremental opportunity of Internet sports betting,” Mr Smurfit said.