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Elys sees revenue dip in Q3 despite growth in staking

| By Nosa Omoigui
Elys Game Technology has reported record revenue for the nine months to 30 September, despite a dip in the third quarter's contribution.

Amounts wagered across Elys’ online gaming and retail outlets in Italy were up 13.9% to $163.7m over the three months to 30 September. This was staked almost entirely online, which accounted for $162.5m of the total, with a further $1.2m wagered in-person.

Payouts for the quarter increased 15.9% to $153.4m, of which $152.3m was web-based and $1.0m was land-based. This left gross gaming revenue of $10.3m, down from $11.4m in 2020.

After gaming taxes of $2.5m, net revenue came to $7.8m. Additional service revenue brought the total net revenue to $8.0m, down 17.5% from last year.

Expenses for the company increased from $10.3m to $11.1m for the quarter, of which $6.1m was related to the sale of its product and solutions, and $5.1m was general expenses.

Operating losses for the quarter were $3.1m, up 416.7% from last year. Losses for the year so far are more than three times higher than last year, increasing to $6.4m from $1.5m. Other expenses amounted to $699,838, mostly consisting of $200,000 losses on marketable securities and $569,076 from a change of contingent purchase consideration.

Pre-tax losses were $3.8m. With the $284,636 worth of income tax, net losses came to $3.5m – up from $1.2m last year.

For the year to date, comprising the nine months to 30 September, handle was up significantly, climbing 77.2% year-on-year to $626.9m. Again, online dominated, accounting for $613.7m of the total, with land-based contributing $13.2m.

After total winnings of $584.3m were paid out – $573.0m for online and $11.4m for land-based – gross gaming revenue for the first nine months of the year amounted to $42.6m. Accounting for $9.1m of gaming taxes, net revenue for the year to date stands at $33.4m – a 35.8% increase from 2020.

Operating expenses for the year came to $40.3m, with other expenses adding a further $472,990. Subtracting that from the year to date revenue of $33.9m and $8,136 of income tax, net losses for the year currently stand at $6.9m.

2021 has also seen Elys complete its acquisition of Nevada-based sports betting services provider Bookmakers Company, in a $12.0m deal in July – which was cited by executive chairman Michele Ciavarella as a “key milestone” in the company’s financial performance.

The company also launched its new betting platform in conjunction with Churchill Downs Incorporated, as well as launching a retail sportsbook in Washington DC.

Ciavarella also stated that the company’s US expansion plans were furthered through a partnership with New Jersey’s Ocean Casino Resort, in addition to reaching an open market sales agreement with investment banking firm Jefferies Group.

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