December 13, 2021 -- InvestorsHub NewsWire -- via NetworkNewsWire
Editorial Coverage: Every generation is witness to some type of
earth-shattering developments, many from which investors can
benefit. For the demographics that made up the Depression Era, the
world may have moved slower than today, but those decades still
gave way to monumental breakthroughs such as insulin, television,
solar cells, antibiotics, hard drives and much more — even
sliced bread. From Gen X forward, the internet became part of
everyday life, with one technology accelerating the development of
the next to reshape how the world functions. Online shopping
effected physical malls so significantly that Newsweek declared them obsolete in 2008. In
fairness, no change in a multitrillion-dollar industry happens
overnight, and brick-and-mortar store sales still outstrip those
online, but ecommerce sales continues to
grow each year. Those who missed the early days of
ecommerce can take heart that new technologies are disrupting other
huge industries, including the gaming market. In the
business-to-business segment, Software-as-a-Service (SaaS)
technology company Playgon Games Inc. (TSX.V: DEAL)
(OTCQB:
PLGNF) (Profile) is emerging as a leader,
developing and licensing unique digital content for the iGaming
market for companies. The market is massive in scale, with
companies and consumers clamoring for gaming content from the likes
of Playgon, Rush
Street Interactive Inc. (NYSE:
RSI), MGM
Resorts International (NYSE:
MGM), Las
Vegas Sands Corp. (NYSE:
LVS) and Evolution ADR (OTC:
EVVTY), especially after the COVID-19 pandemic shook
the market hard, causing a spike in users that caught many gaming
providers off guard.
- Grandview Research estimates that global online gaming revenue
stood at $75 billion in 2021 and will reach $127.3 billion by
2027.
- With its mobile-first, streaming, high-definition platform,
Playgon is disrupting the $6 billion live-dealer casino
market.
- Playgon has already cleared the high barrier of market entry,
with its platform of more than two dozen live operators in Europe
and South Africa.
- Playgon offers a complementary suite of eTable games and is
also in the $20 billion DFS market with turnkey product for daily
fantasy sports.
Click here to view the custom infographic of
the Playgon Games Inc. editorial.
Double-Digit Growth Ahead
According to industry analyst firm Grandview Research, the
global online gaming industry, or iGaming as it’s frequently
called, presently generates approximately $75 billion in revenue
each year. Grandview forecasts 11.94% compound annual growth from
2021 to 2026, predicting the industry will reach $127.3 billion by
2027. Growth drivers abound, including the COVID-19 pandemic,
increasing and evolving regulations, technological developments and
incessant consumer demand, with Millennials (those born between
1981 and 1996) now the largest generation.
This generation, comprised of 72.3
million people in America alone, is complemented by 67.1
million Gen Z’ers, a group that would barely recognize a world void
of iGaming. Better yet for businesses, the 135.6 million Baby
Boomers and Gen X’ers are becoming increasingly familiar and
comfortable with a digitized world, as measured by 21% of
respondents aged 45 to 64 in a Statista
survey reporting they are gamers and 7% over 65 years old
saying they are too.
Last year will live in infamy for the outset of the COVID-19
pandemic on a global scale. Lockdown orders went into effect in
most countries, leaving people shuttered in their homes to eat,
sleep, work and entertain as “nonessential” businesses were forced
to close for months on end owing to fears of contagion. Not
surprisingly, online gaming experienced a boom in demand and
disruption that will never be undone, as cutting-edge streaming
gaming content moving into the forefront to satisfy gamers appetite
from a safe distance.
Playgon Games Inc. (TSX.V: DEAL)
(OTCQB:
PLGNF) is emerging on the other end of the
pandemic stronger than ever with new gaming content delivered to
new customers. In fact, while many companies folded under the
pressures of the pandemic, Playgon matured, now employing more than
80 staffers who are developing, selling and servicing turnkey
products and offering a multitenant gateway that allows online
operators the ability to offer their customers innovative iGaming
software solutions.
Playgon offers a diverse software platform that includes
live-dealer casino games, eTable games and daily fantasy sports.
Through frictionless integration at the operator level, DEAL
clients are afforded easy, secure access to the platform without
sharing or compromising any sensitive customer information.
Recognizing desktops are a fading consumer trend, with 2021
market share projections showing that 59% of global
gaming revenue will come from mobile phones. Playgon has
centered its platform on mobile, using leading-edge tech to build
and deliver content. As one of the few pure B2B digital content
providers clearly differentiated from peers, Playgon enjoys the
fact that is has zero customer acquisition costs, which is great
for margins. Current and future DEAL customers include online
casinos, sportsbook operators, land-based operators, media groups
and big database companies, just to name a few.
Give ‘Em What They Want: Live Dealers
Gamers and gamblers alike crave that feeling of being at a
venue. To that point, legacy gaming technology was lacking until
the invention of live-dealer games, which continue to grow in
popularity. The growth is evidenced in the numbers, which show a
market segment at an inflection point and serving as a driver for
the broader online casino industry.
The young live-dealer online casino market is estimated to be on
track to expand 60% from $5 billion in 2019 to $8 billion in 2023.
The market is dominated by three companies – Evolution Gaming,
Microgaming and Playtech – although this trio generally offers
products that are somewhat similar and often look alike with no
clear standout product.
Playgon intends to capitalize where others have moderated.
Playgon has stepped up the game in a number of ways, starting with
a proprietary mobile user interface and user experience that
replaces outdated technology of peers that primarily was designed
for desktop units. Featuring the most advanced products to date,
the company launched its studio in Las Vegas featuring 10 live
tables and three auto tables that deliver streaming video of
live-dealer content in high definition for its virtual patrons to
play along. DEAL’s platform uses state-of-the-art AR (augmented
reality) gambling technology. Live dealers are available for
players of some of the most popular table games Vegas has to offer,
namely blackjack, roulette, baccarat and Playgon’s proprietary
Tiger Bonus Baccarat(TM).
Moreover, Playgon has taken a page from successful SaaS
companies in moving its platform to the cloud for accessibility and
scalability. All DEAL games are mobile focused, work on any device
and are built for portrait-mode, one-handed play. While many
companies plan to do similar things, DEAL has done them.
The company hurdled the high barriers to entry in the iGaming
market, with its new platform now live under contracts with
multiple online casino operators through four content aggregator
clients in South Africa and Europe. More are expected to be
onboarded in the coming months, according to DEAL management. In
aggregate, Playgon products are live today with 26 operators, a
number that will rise to 34 as soon as 8 more operators complete
integration of the technology.
While the initial focus has been on the highly sought-after
live-dealer games, Playgon also offers eTable versions of the four
aforementioned games that include gaming features unique to each.
At the same time, Playgon developers are working on a suite of 25
more games, comprised of popular table games such as craps, 3-card
poker and hold ‘em poker that will be added to the product
lineup.
Getting in the $20 Billion DFS Mix
Playgon’s portfolio of offerings also include daily fantasy
sports (“DFS”) games. These games, whose popularity has evolved
into a social phenomenon that spawned a global army of die-hard
fantasy sports players from every walk of life.
DFS is simply an abridged version of season-long fantasy
leagues, where teams draft players from different organizations (a
virtual all-star team of sorts) and then compete against other
teams with scoring based upon what the player does in real-life
games. The difference with DFS is it has a much shorter duration,
often only a couple hours with players picked from two opposing
teams. According to Research & Markets, the global fantasy
sports market is expected to grow from $20.36 billion in 2020
to $22.31
billion in 2021.
Much like its gambling casino gambling products, Playgon has its
own premium B2B fantasy sports platform that its operator clients
can license. Custom designed for regulated markets, the DFS
platform initially caters to soccer (or football for those outside
the U.S.) and golf.
More specifically, the platform integrates players, games and
data from five European football leagues — the Premier League,
Bundesliga, Ligue 1, Serie A, La Liga — as well as the PGA and
European golf tours. Adding DFS provides operators the opportunity
to attract gamers that normally wouldn’t visit their platform for
cross-sale, in addition to the opportunity to collect additional
data that can be used to optimize operations, grow sales, and widen
profit margins.
Speaking of Margins and Revenue…
Whereas B2C (business-to-consumer) companies often spend large
to acquire and keep players, Playgon is free from this capital
burden. Playgon generates revenue through a SaaS license model in
which iGaming operators from around the world license DEAL’s fully
integrated live casino solutions.
Over time, SaaS has emerged as the business model of choice
where one-time sales are replaced by recurring licensing and
support fees. SaaS licenses typically generate much higher margin
revenue than straight sales. In the case of Playgon, the company’s
fees range from 6%–12% of gross gaming revenue, defined as the
player’s bet minus the player’s win before operating expenses.
Where a customer lands in the range is dependent on different
factors, such as addressable market size.
In addition, Playgon’s leadership team cannot go overlooked or
understated for what it brings to the table. CEO Darcy Krogh
cofounded Chartwell Technology, a TSX-listed company that pioneered
browser-based digital content for the iGaming market. Amaya (now
called Stars Group) acquired Chartwell in 2011, keeping Krogh as VP
of business development until the B2B asset portfolio of the
company was sold to NYX Gaming Group in 2016. Krogh left for his
next endeavor as founder of Global Daily Fantasy Sports, which has
evolved into Playgon Games.
The executive team also includes chief product officer Guido
Ganschow, an expert in live-dealer technology with more than 13
years of direct experience, including the cofounding of a
Macau-based casino consortium. Playgon’s chief operating officer
Steve Baker was previously the VP of operations at Shaw
Communications where he was instrumental in growing the company
from 350 employees to more than 13,000 and annual revenue growth
from $300 million to $2.8 billion.
A Really Big Sandbox
At $75 billion and growing nearly 12% per year, the online
gaming market is plenty big enough to support multiple winners.
There is a common thread insomuch that companies, whether they are
B2B, B2C, omni-channel or purely digital, are all moving quickly to
monetize demand and win customers’ trust by integrating the latest
technology that ensures functionality and security encased in
premium user interfaces and experiences.
Rush Street
Interactive Inc. (NYSE:
RSI) last month was named
iGaming Operator of the Year for North America at the
Gaming Intelligence Awards 2021. The Awards highlight the most
successful operators and suppliers around the world. The Gaming
Intelligence Award isn’t the only global recognition RSI has
recently received. The company was recognized as Sportsbook of the
Year at the SBC Latinoamérica Awards 2021 last month and is on the
short list Casino Operator of the Year, Social Operator of the Year
and Leader of the Year at the SBC Awards North America to be held
this month.
MGM
Resorts International’s (NYSE:
MGM) sports betting and iGaming operator, BetMGM,
just announced
the opening of the BetMGM Sportsbook at Vee Quiva. BetMBM
is partnering with Gila River Hotels & Casinos for the first
opening of a BetMGM retail sportsbook in Arizona and Phoenix’s
first in-casino sportsbook. The BetMGM Sportsbook at Vee Quiva
boasts 25 large screen displays, a massive media wall and seating
for more than 100 guests. Guests can view games and events from all
major U.S. and international sports. The sportsbook also features
20 betting kiosks and ticket writers present to assist guest with
placing bets.
Las Vegas
Sands Corp. (NYSE:
LVS) launched an
initiative to invest in digital opportunities earlier this
year. The effort is aimed to position the company as a strategic
investor in digital gaming technologies, focused primarily in the
B2B business space. As part of the effort, the company is putting
together a digital gaming investment team. “Sands is determined to
grow its leadership position within the industry and is committed
to doing that through strategic steps we think best position the
company for future growth,” said Sands chair and CEO Robert
Goldstein.
Evolution ADR (OTC:
EVVTY) recently launched
Lightning Blackjack, the latest addition to its
award-winning Lightning game series. The new offering is available
in both live and first-person versions, and is a unique,
electrifying, scalable version of blackjack that features enhanced,
multiplied payouts. First-person Lightning Blackjack is a superior
3D-animated version of the game. Players enjoy the same exciting
gameplay and chance of multiplied payouts but in an RNG-based game
that includes a Go-live button that can take them directly to the
live-dealer Lightning Blackjack table.
The fact is that many gamblers will say that nothing can replace
the sights, sounds and excitement of a casino. However, there’s a
change in sentiment that picked up some strong tailwinds during the
pandemic. Technology is bringing the feel of a live casino to a
player’s living room, and while bricks-and-mortar casinos aren’t
going anywhere, both gamblers and investors alike are astutely
aware of the fun and money to be had in the world of virtual
gaming.
For more information about Playgon Games,
please visit Playgon
Games Inc.
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