Gaming Innovation Group revenues down 16% in Q2 as Swedish “headwinds” bite
2018 strategic review leads to falls in operating and marketing expenses during Q2
Gaming Innovation Group (GiG) has revealed a 16% year-on-year fall in Q2 revenues to €31m due to the headwinds of “a tougher Swedish market”.
The company also lost a B2B contract in Q4 2018, which wasn’t named, but GiG said it affected YoY comparisons to the tune of €4.8m in Q1 2019 and €2.2m in Q2 respectively.
Company EBITDA increased by 49% YoY in Q2 2019, rising to €2.5m from a previous Q2 2018 high of €1.7m.
GiG’s marketing expenditure fell by 32% YoY during the second quarter to €8.9m, compared to €13.2m in 2018, which the company said was supported by a change in mix to reduce above-the-line marketing and use of more efficient marketing channels.
Part of this decrease was due to the company focusing its marketing spend on the Rizk.com brand, which represented 73% of total B2C revenues with a year-on-year growth of 17% during Q2.
Earlier this week, GiG sold its Highroller business to affiliate operator Ellmount Gaming for €7m as part of the company’s strategic review of its B2C business, including the focus on Rizk.com.
GiG said this strategic review was “yielding positive results”, enabling the company to operate fewer and larger B2C brands.
During the quarter, GiG was granted B2B and B2C licences for online casino and sports betting in Spain and a Class II licence in Romania, allowing affiliate marketing.
GiG CEO Robin Reed said: “Our global expansion will be driving sequential growth in both B2C and B2B in H2 and we will manage that growth with a strong focus on execution as the Company is heavily focused on improving earnings per share.”
GiG’s Swedish subsidiary Zecure Gaming also received a fine from the Swedish regulator during Q2 for offering betting on an international match involving a majority of players who were under 18.
Speaking about the fine and subsequent appeal, Reed confirmed that the match in question was only available for a brief time and no bets were accepted. He said the company had chosen to appeal because it felt that since it had not accepted any bets, it had not breached any regulations.
Reed said GiG had taken “all necessary steps” to ensure that markets were not offered on these sorts of matches in the future.