Expansion costs hit Elys Game Technology during Q3

Igaming platform provider Elys Game Technology is down 19% on the NASDAQ after announcing that its Q3 net revenue had reduced by 17.2% year on year (YoY) despite record takings.

Italy-based Elys attributed the downturn to its $12m(£8.9m) acquisition of USBookmaking (USB) and the fact that Covid-19-related restrictions had hampered its land-based operations.

Expenses attributed to investments in technology, licensing and personnel as well as legal and due diligence were $5.1m while costs relating to platform development and building of the US and Canadian business amounted to $3.1m.

Despite the net loss, betting revenue increased 13.9% to $163.7m, although gross gaming revenue decreased by 9.3% to $10.3m.

That activity has given cause for encouragement with executive chairman Michele Ciavarella stated: “The company continues to grow its core business and that is reflected by robust increases in handle and record revenues of $37.3m for the first nine months of the year.”

Future expectations are high after a licence was granted enabling the company’s Washington, DC Grand Central Restaurant to operate a sportsbook coupled with the acquisition of USB.

Speaking at the company’s Q3 announcement, Ciavarella justified the expenditure in America: “The future is in a year from now, two years from now, five years from now. In order to provide for our potential customers as the American and Canadian markets expand, we need to reinvest back in technology.”

“We’re managing the expenses very tightly… but the bottom line is we are investing for growth in the future,” he added.