In an otherwise flat set of 2019 Q4 financials hit by a weakened commercial pipeline and B2B client termination, Gaming Innovation Group found some positives for investors thanks to solid progress in its US sports betting activities.
But there was no sugar coating of the headline figures which showed a 26% shortfall in Q4 2019 revenues to $31.8m (Q4 2018: $43.3m), with Q4 revenues for the B2B segment of $13.1m ($17.7m), EBITDA was $0.87m ($4.6m).
As a result, the firm anticipates that provisional full-year 2019 results will show an 18% decline in corporate revenues to $133m ($163.5m) combined with a 12% decrease in FY2019 EBITDA to $15m ($17m).
Turning to the US scenario, CEO 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.”
Elsewhere in the Q4 update, the company talked about its future US ambitions. “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.”
The company also reflected on some of the key activities during the period, including extending its partnership with Hard Rock International further by supporting its market entry with sports betting in Iowa.
The sportsbook launched in September 2019 with an over-the-counter solution on the casino floor at the Hard Rock Hotel & Casino Sioux City in Iowa and was, in December, followed by the launch of the ‘mobile first’ online sportsbook. “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.