In an otherwise flat series of 2019 Q4 financials affected by a depleted commercial pipeline and termination of B2B clients, Gaming Innovation Group (GiG) found some positive for investors thanks to solid progress in its US sports betting operations.
But the headline figures show a 26 percent shortfall in Q4 2019 revenues to $31.8 m (Q4 2018: $43.3 m), with $13.1 m ($17.7 m) of Q4 revenues for the B2B segment, and $0.87 m ($4.6 m) of EBITDA.
As a result, the company anticipates an 18 percent decrease in corporate sales to $133 million ($163.5 million) combined with a 12 percent fall in FY2019’s EBITDA to $15 million ($17 million).
Turning to the US situation, Chief Executive Richard Brown told investors: “I am proud of the strategic position we have in sports betting and the work achieved through 2019 to become one of only a handful of suppliers offering both sportsbook and player account management (PAM) solutions in multiple states in the US.
“This investment has been heavy and the return will be over the long term. In order to maintain the strategic position, we are working towards a solution which can support this while at the same time bringing the cost level in line with the revenue.
“We are in negotiations with several interested parties which we believe can not only bring in financial sustainability to the segment, but also provide us with strategic and competitive advantage in this exciting space.”
The company has talked about its future US ambitions elsewhere in the Q4 update. “To keep the strategic position for its own proprietary sportsbook, GiG will seek joint ventures or other constellations with partners to release the true asset value of the sportsbook and to secure external long term funding,” it said.
“The ambition is to gradually grow with existing and new long term partners, including the fast growing US market. GiG is one of the few B2B providers present with omni-channel online gambling services in multi-state jurisdictions in the US. The aim is to reach break even in this vertical in the third quarter of 2020.”
During the time, the company also focused on some of the main operations, including further expanding its relationship with Hard Rock International by promoting its market entry through sports betting in Iowa.
The sportsbook launched in September 2019 at the Hard Rock Hotel & Casino Sioux City in Iowa with an over-the-counter solution on the casino floor, and was followed by the launch of the online sportsbook’ mobile first’ in December. “For GiG, this means the company will be able to leverage its platform in the US, adding more scale to its network and revenues to the business,” it said.