US variables key to GAN performance

GAN revealed yesterday (Monday) that it expects to post record revenues, growth and earnings in 2019, but warned that the company’s performance in the second half of this year remains largely dependent on uncontrollable factors in New Jersey and Pennsylvania.

Ahead of the publication on September 28 of its financial results for the six months through to the end of June, GAN said that it had performed “in line with market expectations” in the first half of the year.

The company, led by CEO Dermot Smurfit (pictured), cited online sports betting developments, existing contracts and an encouraging sales pipeline for its anticipated record financial results next year.

Before then, though, the outlook is more uncertain, with the variables including the growth rate of online sports betting in New Jersey and the launch date of regulated online gambling in Pennsylvania, as well as the “speed with which efficient marketing of the Overseas Internet Casino is conducted in GAN’s European markets”.

The Pennsylvania Gaming Control Board (PGCB) told iGamingBusiness.com last week that a “co-ordinated launch” of online wagering by licensed operators in the state “is likely to happen if not towards the end of this year, then early next year”. With more than 12 million people, Pennsylvania is the fifth biggest state by population.

GAN, though, said that real-money online gambling in the state is “now expected to commence in early 2019… due to a slower-than-expected issuance of regulations by the PGCB”.

GAN’s share price fell sharply following the trading update and despite recovering slightly before the close it was still more than 9% down in comparison with 3pm yesterday by 9.30am today.

However, as previously reported by iGamingBusiness.com, the rate of growth of sports betting in New Jersey – where GAN has been delivering online sports wagering services to PaddyPower Betfair under the FanDuel brand since September 1 – appears to have exceeded expectations.

Figures released last week by the state’s gambling regulator showed that $95.6m (£72.5m/€81.7m) was placed in sports bets in August.

In its trading update, GAN speculated that the encouraging early signs in New Jersey could have a domino effect on the acceleration of regulatory developments in other US states.

“The reported success of the internet sports betting market in the first operating month of August 2018 may result in an increase in the speed of regulation of intra-state internet gambling going forwards,” the company said.

“It is believed that additional US States are now considering the regulation of internet gambling.

“Internet sports betting’s growth since launch on September 1, 2018 has exceeded initial expectations in the first 17-day operating period.”