Gaming Realms grows revenue 65.9% in strong first half

Igaming content developer and distributor Gaming Realms has reported a 65.9% year-on-year rise in revenue for the first half of 2020, which in turn helped the business report positive earnings for the period.

Revenue for the six months to 30 June climbed to £5.2m (€5.8m/$6.8m), of which £3.4 came from licensing its content to third party partners – up 103.5% – while social gaming revenue rose 29.4% to £1.8m.

Growth was driven by new client roll-outs during the period, with five top-tier operators launching Gaming Realms content by 30 June.

In the UK, this saw Gamesys, Sky Betting & Gaming, 888 Casino go live; DraftKings add games to its New Jersey online casino, and Caliente roll them out in the Mexican market.

The supplier also launched four new games during the reporting period, including Slingo Centurion in partnership with Inspired Entertainment, taking its portfolio to 40 titles.

As outlined in a trading update last month, the business benefitted from increased online casino play as countries went into lockdown as a result of novel coronavirus (Covid-19). Growth was also aided by the reach of Slingo, which has been licensed for use in verticals outside of online casino such as lottery and social.

With £2.9m of the half year total generated in the US, that market accounted for 56.1% of Gaming Realms’ revenue. This comes entirely from New Jersey, where the supplier has grown its market share to 3.5%. Subject to regulatory approval, it plans to expand into Pennsylvania, where it has applied for a gaming content supplier licence, early in 2021, followed by Michigan.

However, the supplier is also diversifying, with contrinutions from other markets growing signficiantly. Gaming Realms saw revenue from Isle of Man licensed partners grow 115.2% to £1.3m, followed by a £753,269 contribution from the rest of the world (up 154.9%). Revenue from Great Britain, meanwhile jumped from £28,540 in H1 2019 to £226,376.

Looking at outgoings for the period, marketing expenses declined to £101,408. This, however, was offset by increased operating expenses of £1.0m (up 45.5%), and administrative outgoings of £3.0m (up 6.8%), while the supplier made £40,075 in share-based payments in H1.

These outgoings included £250,881 in costs related to redundancies, consultancy and relocation fees, after which Gaming Realms posted earnings before interest, tax, depreciation and amortisation of £988,186, compared to a £522,994 in the prior year.

After finance costs, amortisation and deprecation, Gaming Realms’ pre-tax loss was significantly reduced, falling 72.0% to £692,578. After a £62,881 tax credit, the supplier’s net loss for the period was cut 80.3% year-on-year to £629,697.

“Our exceptional performance in the first half of this year is testament to the strength of the company's strategy of developing and licensing games to market-leading brands and gaming operators using our Slingo IP, which continues to deliver high margin revenues,” Gaming Realms executive chairman Michael Buckley said. “Whilst our results were enhanced during the Covid-19 period of self-isolation, I am pleased to say revenues in the second half are holding onto levels achieved during the first six months.

“We are delighted to report that our innovative Slingo Originals content continues to gain momentum, reaching new international audiences thanks to our global network of distribution partners,” Buckley continued. “We remain committed to building on this, and growing our global reach during the second half of the year by investing in our unique content and securing further strategic partnership deals.

“Our planned expansion into Pennsylvania and Michigan is hugely exciting and is set to significantly increase our foothold in the US, whilst reducing our dependency on the UK market.”

Since the end of the reporting period, Gaming Realms said, licensing revenue was up 140% year-on-year over July and August, with social revenue increasing 56%. This, means the supplier’s board expects to generate positive cashflow for 2020, with high margin growth offsetting development costs for new games and a remote games server.

This development has seen two new Slingo titles released, with three new operators – Jumpman Gaming, White Hat Gaming and MrQ – rolling out its content. Its reach has been expanded further in Europe through a distribution deal with Bragg Gaming Group-owned Oryx Gaming, and in the US through a direct integration and expanded deal with Rush Street Interactive.

“The group is currently performing in line with market expectations and, with a number of new commercial developments in the pipeline, the board is confident in the future performance of the business,” Buckley added.