GAN turns attention to Pennsylvania and possible legalization of Michigan online casinos

US Online Gambling Growth Leads GAN To Strong 2017 Financials; Eyes PA Expansion

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GAN released its year-end results for 2017 on Thursday. And the results are quite good.

Thanks to significant growth in the US and the potential for more in the future, GAN turned its strongest performance to date. For the first time since 2013, the group’s finance sheet shows clean profit for the year.

GAN is an award-winning provider of online gaming technology, both for operators and direct to consumers. It’s been around since the early 2000s, and it’s been a key player in the worldwide growth of iGaming.

Top-line GAN finances

The group generated a net revenue of £9.1 million on £41.1 million in gross income in 2017. Both of those numbers are up significantly year over year.

Perhaps a better measure of its financial well-being, GAN realized about £500,000 in clean EBITDA profit, a nice turnaround from a loss of nearly twice that in 2016. The news release calls it the “maiden full year” for finishing in the black.

The company also disclosed that it raised £2 million on a convertible loan note in April. It holds £2.7 million in cash and £7.6 million in assets at year-end.

The report lays out several justifications for the numbers, including this bullet point: “Continued investment in US infrastructure.”

Indeed, the group has positioned itself for a big push in 2018 and beyond. GAN chairman Seamus McGill summed up the recent endeavors: “After four years building our US market position we are satisfied the Group is now recognised as a leading provider of enterprise-level online solutions to the land-based gaming industry in the United States.”

Click here to read the full report.

GAN executives itemize 2017 success

The financial report is framed by lengthy summaries from GAN executives.

CEO Dermot Smurfit pointed to several reasons for the group’s success in 2017. As anticipated, New Jersey online gambling through Betfair Casino was the big winner.

“New Jersey’s Internet gaming market out-performed our full year expectations with gross gaming revenues up 30% year on year to $246m,” Smurfit wrote.

Social gambling is key to GAN’s profitability, too. Its Simulated Gaming system is widely used in casino markets without regulated online gambling, including many in the US.

Smurfit took the opportunity to highlight the main selling points of the social platform:

Simulated Gaming continues to represent a significant US market opportunity which is immediately addressable and not contingent on the pace of regulation nor dependant on US casino clients’ making material investment in digital user acquisition as the majority of Simulated Gaming revenues are derived from the casino clients’ existing patrons.

The group also holds several patents surrounding online and land-based gaming, both of which were licensed to additional properties in 2017.

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What’s in store for GAN in 2018?

In addition to highlighting the 2017 numbers, GAN gave a good glimpse at what to expect in 2018. The US market remains its primary focus, and that market is going to be expanding in the coming year. How much remains to be seen, but Smurfit is optimistic given recent history.

“Legislative actions also occurred in several other US States in 2017,” he wrote, “which suggests the State-by-State regulation of Internet gaming may progress further in the US during the course of 2018.”

Here’s more of his prognosis:

For 2018, we forecast material growth of both Simulated Gaming and real money Internet gaming undertaken for US clients in New Jersey, Pennsylvania and Europe’s diverse regulated markets. Our US Patent licensing program which commenced in H2 2017 may also represent a new source of patent licensing revenues for GAN in 2018 and beyond.

Pennsylvania, in particular, could leave a big mark on GAN’s 2018 finances. The state only recently legalized iGaming, with a launch expected this year. GAN has a long-standing partnership with Parx, the largest casino in the state.

The group also picked up an additional NJ client this past year. The new Ocean Resort Casino is expected to launch iGaming on GAN software later this year.

Lastly, Smurfit specifically mentioned the push for Michigan online casinos as one with a lot of potential for GAN in the near future.

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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