GAN posts net loss thanks to US regulatory gridlock

AIM-listed firm plans 2016 rebound on strength of social casino offering

 

GameAccount Network (GAN) has posted an EBITDA loss of £3m for the 2015 financial year, attributing the deficit to “slower than expected” RMG regulation in the US and a weak New Jersey market.

The online casino platform provider also saw underlying net revenues slump 8% to £6m for the 12-month period ended 31 December.

“Real-money Internet gaming in New Jersey and the pace of regulation in the US market has remained slower than expected,” Dermott Smurfit, GAN chief executive, said.

“But we are confident in the long-term prospects for real-money gaming,” he added.

Smurfitt said the company’s short-term focus would be on its social casino platform, Simulated Gaming, after signing five US casinos onto the platform in 2015.

“Simulated GamingTM continues to represents a US market opportunity estimated at $250m in 2015 which is immediately addressable and not contingent on the pace of regulation nor contingent on US casino client’s investing in digital user acquisition,” Smurfitt said.

Going forward, the chief executive highlighted Pennsylvania as the next state to potentially legalise and regulate RMG, adding that GAN’s partnership with Parx Casino positioned the firm for “substantial growth in RMG should suitable legislation be enacted in 2016”.

Smurfitt also predicted “significantly increased market share” in New Jersey thanks to its recently announced partnership with the Borgata.

“After two years building our market position we are satisfied the Group is now recognised as a leading provider of enterprise-level online solutions to the land-based gaming industry in the United States”, added GAN chairman David O’Reilly.

“We believe significant shareholder value will develop going forwards as New Jersey’s regulated gaming market continues to grow and Simulated Gaming continues to be adopted by a portfolio of larger US casino operators.”

Outside of the US, GAN signed six land-based gaming clubs in Australia as clients of Simulated Gaming. O’Reilly said the board believed the Australian market would prove “lucrative over time”.

GAN’s share price was up just over 3% to 30.5p after early morning trading.