Online casino technology provider GAN is blaming America’s glacial path towards online gambling regulation for the company’s 2015 financial losses.
On Friday, the UK-listed GAN (aka GameAccount Network) released its annual report for 2015, which showed revenue falling 9% year-on-year to £6m while the company reported a net loss of £3m.
GAN’s Simulated Gaming social casino product flexed its muscles in 2015, reporting revenue of £2.4m, up from just £0.5m in 2014. Simulated Gaming was the only one of GAN’s verticals to post a year-on-year gain, while its share of GAN’s overall revenue went from 8% to 40%.
Simulated Gaming signed five new US casino clients and a consortium of six land-based gaming clubs in Australia last year. The vertical continues to grow, inking a deal with Rock Gaming’s three Ohio casino properties in February.
Last week, GAN announced it had inked a Simulated Gaming deal with an unidentified “major Southwest US casino operator.” The unnamed operator was described as “one of the largest Native American casino operators in the country” and the deal would represent GAN’s “largest multi-property US client to date.” GAN said it would reveal the identity of its mystery partner once the deal had received all its necessary regulatory consents.
In March, GAN announced a similarly mysterious deal with a “major established casino property generating in excess of $500m in gross gaming revenues annually.” The deal appears to be separate from the aforementioned tribal casino operator, as GAN claimed this other operator would boost GAN’s presence in “the lucrative North Eastern regional social casino gaming market.”
REAL MONEY, REAL PROBLEMS
While GAN’s social casino is firing on all cylinders, the company’s B2B platform and game development revenue fell to £1.2m from £2.9m in 2014, which the company blamed in part on the lack of progress on the US online gambling regulatory front and the New Jersey regulated online market’s equally slow start.
Despite the setbacks, GAN said it remained bullish on the US real-money market’s long-term prospects, identifying Pennsylvania as the most likely state to approve online regulations in 2016. GAN has a prospective real-money deal with the state’s Parx Casino.
GAN supplies real-money tech to Betfair’s New Jersey casino site and has a prospective deal with Atlantic City’s market-leading Borgata casino. GAN said it expects to launch its real-money product on the Borgata sites by “summer 2016” subject to “certain contractual conditions being met.”
The Borgata is widely believed to have inked the GAN deal as a hedge against regulatory uncertainty. The Borgata currently gets its online tech from Bwin.party digital entertainment, but there are concerns that Bwin.party’s new owner GVC Holdings might fail to secure a New Jersey online license due to its prominent operations in many grey- and black-markets.