TIDMGAN
RNS Number : 6892C
GAN PLC
23 January 2018
LONDON STOCK EXCHANGE (LSE): GAN | IRISH STOCK EXCHANGE (ISE):
GAME
Trading Statement & Notice of Results
London & Dublin | January 23, 2018: 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 Casino(2) . During
the period, the Company benefited from strict cost management and
generated positive clean EBITDA(1) 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 Patent(3) . 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 Casino(2) 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(TM) 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(TM)
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(TM) 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 Patent(3) 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 EBITDA(1) 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."
(1) Clean 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.
(2) Overseas 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.
(3) Network 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(TM), 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
For further information please contact:
GAN US Investors: The Equity
Group
Dermot Smurfit Adam Prior
Chief Executive Officer aprior@equityny.com
+44 (0) 20 7292 6262 212.371.8660
dsmurfit@GAN.com
UK & Ireland Investors:
Walbrook PR
Paul Cornelius
GAN@WalbrookPR.com
+44 20 7933 8780
Davy (Nominated
Adviser, ESM Adviser
and Joint Broker)
John Frain / Barry
Murphy
+353 1 679 6363
Liberum (Joint
Broker)
Neil Patel / Cameron
Duncan
+44 (0) 20 3100
2000
This information is provided by RNS
The company news service from the London Stock Exchange
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