SMALL CHAPTER IDEA: Gaming Realms Targets U.S. Gaming Jackpot
Gambling is not yet legal throughout the United States, but after lifting a 1992 ban in 2018, many US states are beginning to approve sports betting, online and in-person.
And companies are starting to take full advantage of the untapped market.
Paddy Power Parents Group Flutter Entertainment and owner of Ladbrokes entertain Both have a significant interest in the US, owning sportsbooks FanDuel and BetMGM respectively, and based on recent trading updates, both believe it is a market that is booming.
However, it’s not just the bigwigs in the FTSE 100 game who benefit.
Growth: Gaming Realms shares are up nearly 40 percent so far this year
game kingdomsa developer and licensor of gaming content, is also enjoying strong growth in the United States, recently reporting a 37 percent year-over-year increase in first-half revenue in North America.
Known for its Slingo game series, which combines slot machines with bingo, the group’s shares have risen nearly 40 percent so far this year and management is confident that a streak of 13 consecutive half-years of growth will not end soon. .
The US offering, which represents 45 percent of the London-listed firm’s total content licenses, is constantly growing through new agreements with partners such as Pokerstars, which recently signed an agreement with the group in New Jersey to license one of its games.
With 57 different live offerings across 20 different licensees in New Jersey, players from Pennsylvania, Michigan, Connecticut, and of course Nevada can now play some of Gaming Realms’ products as well.
One of the most versatile parts of Gaming Realms’ Slingo games, which it bought the rights to in 2015 for $18 million, is the ability to adapt it based on customer demands.
By releasing spin-off versions such as Slingo Masked Singer, Slingo Riches and Slingo Cleopatra, Gaming Realms has also been able to create versions specific to US businesses and audiences such as:
- Slingo Shark Week in collaboration with Warner Bros Discovery
- Slingo Rainbow Riches in partnership with American developers Light and Wonder
- Detroit Lions Slingo with BetMGM
- And how could anyone forget Lucky Larry’s Lobstermania Slingo, in collaboration with King Show Games?
“The potential to roll out its full content library to all its partners is clear,” said an analyst at brokerage Peel Hunt.
No, Gaming Realms has not signed a deal with Disney to release Aladdin Slingo, but it is exploring new countries for its games spanning numerous continents.
Boss Mark Segal spoke to Proactive and said: ‘Right now, we’re seeing a lot of growth in Slingo. It is a very popular game among players around the world and we can create innovative games.”
Segal says a big part of this success is due to “growth into new markets,” citing strong performance in Canada and the United States, but also pointing to less-explored areas.
‘We have applications now for Greece and South Africa and we will look for more regulated markets.
“We have been successful in recent years, growing in some of the markets we have launched most recently, be it Italy, Spain or the Netherlands,” added the Gaming Realms boss.
Last month, the group also went live in Portugal and reached an agreement with operator Betclic.
Buyouts are extremely common in the gambling industry, best highlighted by the large number of bookmakers owned by Entain and Flutter, including Betfair, Ladbrokes, Coral, Sky Bet and William Hill, owned by 888 shares.
“In an industry where mergers and acquisitions are still thriving, we believe Gaming Realms is an attractive potential acquisition target,” Investec said.
“The company’s unique Slingo product and its many variants give it a considerable competitive advantage, with the potential to continue launching in new geographies and with new customers for small additional costs.”
Investec highlights the strong management team, which is made up of industry veterans, including Segal, former CFO of bwin.party, and chairman Michael Buckley, former chairman of Cashcade, one of the UK’s pioneering online bingo providers. .
Risks include tighter regulation in established markets such as the UK, but which currently trade at an enterprise multiple of 7.3 times and earnings [P/E] multiple of 17, the South African bank’s analysts believe that these figures “significantly undervalue the business.”
Investec believes its share price could rise from its current price of 35p to 48p, representing a gain of more than 33 per cent.
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