A change in strategy two years ago for online casino game specialist Gaming Realms PLC (LON:GMR) is starting to pay off.
Instead of competing with the giants of the gambling industry for players’ cash, it now partners with these same groups and provides them with content.
Revenue in 2019 from the games licensing business jumped by 84% to £4.1mln, as contributions from a string of Tier-1 partners that have recently joined the platform started to come through.
The good numbers have continued into the current year with revenues in the first quarter up by 90%, which was ahead of budget.
As part of the new strategy, the consumer-facing business was sold for £11.5mln, which has left the balance sheet with cash of £2.6mln and a further £1.5mln due at the end of this year.
Key to the strategy is to get the industry’s heavyweights to sign-up to the platform and progress on this front has been marked.
GVC, Rank, BetVictor and Ladbrokes Coral were joined last year by William Hill and Kindred, a Scandinavian Tier-1 player.
So far in the current year, partnership deals have been agreed with SkyBet and US betting titan DraftKings.
It is an impressive roster and suggests the company has managed to distinguish itself successfully.
Slingo 'a sensation'
Anyone who has used an online casino site will know there are hundreds of options and it’s vital to stand out from the crowd for any game developer.
Gaming Realm’s portfolio is largely based around Slingo, a long-established and provenly successful combination of bingo and slot games.
Variations include Monopoly, Rainbow Riches and Advance in addition to the Originals format.
There are now 36 titles in total in the library and testament to Slingo’s endurance came last week when a deal with UK-based online group 888.com was extended for another three years.
888.com will carry all the Slingo Originals portfolio on its main website and noted: “Slingo, in particular, has been a sensation among players.”
A recent collaboration with video games developer Inspired Entertainment has also seen the launch of “Slingo Centurion”, a gaming version of the US group’s hugely successful Centurion computer game.
Mark Segal, Gaming Realms’ chief financial officer, believes that Slingo is a unique format and says the aim is to create a new genre of gaming in the market with dedicated sections on all its partner websites.
Expansion overseas
Part of this plan is the continued expansion in other areas around the world.
Having originally been largely a UK-focused business, efforts are underway to boost Slingo’s reach further in the US, South America, Scandinavia, and other parts of Europe.
In the US, Gaming Realms already has a presence in New Jersey and it was a booming market here that helped revenues last year.
The New Jersey online casino market overall grew by 66% with Gaming Realms maintaining its 3.5% share.
An application to operate in Pennsylvania has recently been submitted by the company and it is looking towards the end of 2020 for approval.
Other US states are said to be considering allowing online casino games and Gaming Realms is hopeful that Michigan might be the next to follow Pennsylvania.
Outside of the US, Caliente, a major online gaming group in Mexico, has recently started to take Slingo content, while in Europe games have been certified in Sweden and are currently being tested for Italy.
Perfectly positioned says broker
Broker Peel Hunt recently described Gaming Realms as being perfectly positioned for the online casino sector.
“There could hardly be a better time for Gaming Realms’ content strategy to be bearing fruit.
“Gaming Realms has built exactly the content businesses positioned to thrive in 2020”, the broker said.
As the new partnerships start to contribute fully, the company expects to be in profit by the end of this year after a loss in of £4.7mln in 2019.
People staying at home and playing games during the coronavirus lockdowns might be an additional help to this year’s figures, but the company has not highlighted any real benefit yet.
The shares have rallied recently but other specialist video game developers are rated at more than five times revenues and even higher in some cases.
At 8.7p, the company is valued at £25mln.