Online gambling tech provider and operator Gaming Innovation Group (GiG) saw its revenue fall in Q2, in part due to adjustments in Sweden’s newly regulated online market.
Figures released Wednesday show GiG generated revenue of €31m in the three months ending June 30, down 16% from the same period last year. The declines were evident in both B2B (€13.1m, -16%) and B2C (€19.6m, -19%) segments. However, earnings improved 57% to €2.5m, thanks in part to a one-third reduction in marketing expenses and a 17% fall in other costs.
The company blamed the revenue decline on lower casino margins, the loss of a major B2B customer in Q4 2018 (with an impact of -€2.2m) and regulatory headwinds in Sweden. In July, GiG shut the Swedish sportsbooks of its Rizk and Guts B2C brands, citing a lack of regulatory clarity on what wagering markets were allowed.
Earlier this week, GiG announced that it had sold its B2C brand Highroller to Ellmount Gaming Ltd (Casino Room) for €7m. Despite the sale, Ellmount will become a GiG B2B customer and Highroller will continue to operate on GiG’s platform. Highroller will continue to operate under GiG’s licenses but will eventually migrate to Ellmount’s license following the necessary regulatory okays.
Highroller was launched in late-2017 and generated revenue of €1.4m and earnings of €200k in the first six months of 2019. The sale is intended to boost the focus on GiG’s best performing B2C brand Rizk, which accounts for 71% of GiG’s B2C revenue.
Since the quarter ended, GiG aided the launch of New Zealand casino operator SkyCity Entertainment Group’s first online casino offering. GiG also obtained new licenses in Spain (online casino, betting) and Romania (affiliate) and launched the Rizk brand in India.
GiG CEO Robin Reed said his company’s “outlook has improved” now that Q2 is in the rearview mirror, and expressed confidence that GiG’s “recent strategic actions” will put revenue back on an upward trajectory and improve the company’s bottom line in the second half of 2019.
