US strategy is falling into place
Elys Game Technology (NASDAQ:ELYS, NEO:ELYS) stock soared this week following the news that it had been granted a sports betting licence in Washington DC. The licence win, which had been anticipated, is significant as it is the first of its kind in the US market, and provides a model for future deals in North America. The news comes in wake of the group's important acquisition of USBookmaking which enables Elys to handle its risk management and trading activities from US soil rather than rely on its Italian trading desk. We also note that last month Elys announced strong first-half figures with total revenue increasing by 73% to $25.8mln.
Transformational acquisition of US Bookmaking (USB)
In July, Elys announced the acquisition of Las Vegas, Nevada-based-USB for an initial $12mln in cash and stock. There is also an aggressive earnout schedule which Elys management is confident in achieving, and could involve additional payments of up to $41.8mln in cash and stock over five years. Founded in 2016, USB is a provider of sports wagering services such as design and consulting, turn-key sports wagering solutions and risk management. USB's management team has renowned experience in bookmaking and sports wagering. USB had been discontent with the third-party solutions available in the market, and was attracted by the modern Elys Gameboard platform. The acquisition of USB provides Elys with an operational footprint in four US states (New Mexico, Colorado, Michigan and North Dakota) with two additional territories (Washington, DC and Iowa) in progress. Importantly, t provides the group with an established client base.
Strong first half puts group in position to beat its internal targets for the year
The first-half numbers, which entirely reflect the group's European gambling business, showed a 73% increase in total revenue to $25.8mln. However, the loss from operations also jumped as the business geared up its preparations for its foray into the US sport-betting market. While web-based activity soared in Q2, the land-based activity slumped to a trickle, with shops in Italy closed due to the lockdown. Management anticipates that some land-based betting shops could re-open by the beginning of the 2021-2022 European soccer season which may provide additional B2C growth in Italy for the remainder of 2021.
Source: Elys Game Technology accounts
Quick facts: Elys Game Technology Corp
Price: 5.02 USD
Market Cap: $116.89 m
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