Analysis

GAN enters sports betting scene with Coolbet buyout

The acquisition of Coolbet deal is part of GAN’s strategy to offer a complete online betting and gaming solution to U.S. operators. 

The group said it would launch fully managed sports betting services in early 2021.  

Speaking to analysts, GAN CEO Dermot Smurfit said the move was purely B2B. “We are not planning to bring the Coolbet B2C platform (to the US) at this time.”

Complete solution provider 

Up to now GAN has been known for being an online casino and player account management (PAM) provider. 

Smurfit was clear his group would now be competing with betting solutions vendors integrated into its platform.

“It is going to be at the choice of our existing and future clients whether or not they want to embrace the Coolbet’s sports offering. 

“We do believe we have significant competitive advantages over the choices available to them today.”

“And we certainly hope that over time, some of our existing clients will choose to deploy the Coolbet technology and displacement of existing sports betting vendors.”

Early casino specialist  

GAN was one of the earliest casino technology providers in New Jersey when it first regulated online casino in 2013.

This focus took on much more importance after the repeal of PASPA in 2018.  

As sports betting solutions providers clamoured to make contact with US casinos, GAN’s position supplying many of them with online gaming products and services meant it held an enviable position as a de facto gateway to many US prospects.

Firms like SBTech signed a strategic partnership with GAN in early 2018 in preparation for the PASPA repeal and both groups then signed Churchill Downs Interactive (CDI) as an early and high-profile U.S. customer.

CDI recently migrated from SBTech to Kambi following the former’s merger with DraftKings, with GAN becoming the enterprise software platform for CDI’s online betting and casino site BetAmerica.

GAN recorded revenues of $10.3m during the third quarter 2020, a rise of 86% on the $5.5m recorded in 2019.

Real-money online gaming generated revenues of $7.7m, up from $4.1m in 2019 and simulated (social) gaming generated revenues of $2.6m, compared with $1.4m last year.

Gross profits came to $6.4m, up from $2.4m on the same period in 2019, while revenues from operators working on GAN’s platform increased 76% to $142.3m.

The group recorded operating losses of $4.1m compared to $1.9m in Q3 2019 and an EBITDA loss of $100,000 in the quarter, down from a $400,000 loss in 2019.

Smurft said this was due to costs linked to its listing in May and investments to prepare for Michigan going live.   

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Jake Pollard

Jake Pollard is an experienced journalist and editor who has covered the online gaming and betting industry for many years. He has written for the leading media outlets as well as operators and suppliers in the igaming space. His current areas of focus are wide-ranging and include regulatory developments in the US, emerging markets in South America and how European countries are adapting to a decade of igaming regulation.

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