The glacial pace of online gambling regulation in the United States is being blamed for a seven-figure H1 loss at UK-listed gaming software firm GAN (formerly GameAccount Network).
Despite a modest increase in gross income to £13.4m, GAN reported a pre-tax net loss of £2.6m in the first six months of 2015, compared to a £900k loss in H1 2014. Net revenue fell 31% to £2.9m, while underlying net revenue fell a more reasonable 6% once you exclude the impact of £1.1m in system sales last year.
While GAN provides Betfair’s New Jersey-facing site with an online casino product, GAN CEO Dermot Smurfitt credited/blamed the “slower than expected pace” of real-money online gambling regulation in the US for the torrent of red ink on GAN’s H1 results, while highlighting the growth in the company’s Simulated Gaming operations.
GAN’s free-play operations reported revenue of £1.2m, up sharply from £200k in the same period last year. Smurfitt said Simulated Gaming enjoyed a 285% year-on-year increase in the number of active player days, while early figures from Q3 indicate active player days up 420%. Gross purchases from Simulated Gaming rose 330% to $2.8m in H1.
Simulated Gaming launched with two new operators in H1, including Australia’s Club8Casino.com.au, GAN’s first non-US customer for the free-play product. GAN inked two other US deals in H1; California’s San Manuel Band and Maryland Live, the state’s top brick-and-mortar casino operator, both of which plan to go live in Q4.
RUSH STREET INK FREE-PLAY DEAL WITH PHILADELPHIA’S SUGARHOUSE CASINO
GAN is far from the only free-play online casino option for brick-and-mortar casino operators. GAN provides Pennsylvania’s Parx Casino with Simulated Gaming, but Philadelphia’s SugarHouse Casino has opted for Rush Street Interactive’s CASINO4FUN option.
The deal was something of a foregone conclusion, given that both Rush Street Interactive and SugarHouse are affiliates of Rush Street Gaming, which also operates casinos in Pittsburgh and Des Plaines, Illinois. Regardless of the deal’s incestuous nature, SugarHouse patrons can now enjoy free-play online slots and table games while earning real-world prize rewards that can be redeemed at the SugarHouse property.
