Gaming Innovation Group (GiG) chief executive Robin Reed has vowed to improve the performance of the company’s B2C Gaming division after it saw a dip in revenue and earnings.
The gaming services company, which is in the process of switching its listing from Oslo to the Nasdaq Stockholm, secured a 39% jump in overall operating revenues to €36.9m ($42m/£33m) during the three months to June 30, according to results published this morning.
Operational costs and marketing expenses led to an almost 12% decline in EBITDA compared to the same period last year, with the company “investing heavily” in new products, enhancements to existing services, regulatory costs associated with entry into the New Jersey and Swedish markets, and commercial activities around the World Cup.
Reed (pictured) said the “heavy-lifting” of development is now done and with all GiG’s products – including its new sports betting platform and GiG Comply compliance tool – to be monetisable from September, expects this to be reflected in its future results.
“GiG has invested significantly to expand across all verticals of iGaming,” said Reed in a statement.
“We are building to become the one-stop shop for every company serious about its iGaming business.
“With the majority of the heavy-lifting behind us and the strongest season ahead of us, we should see growth in both revenues and profits in the coming quarters, while working towards our goal of becoming the largest full service company to the iGaming industry.”
The company is predicting revenue of up to €162m compared to 2017’s €120.4m, with EBITDA of €16-20m compared to €13.5m in 2017.
However, Reed is not content with the performance of the Gaming division, which includes its consumer-facing in-house brands such as Rizk, Guts and Thrills. Revenue of €24.2m was up on Q2 2017, but down by more than €1m compared to the last two quarters. After one quarter of positive EBITDA in Q1, the division saw a €2.8m earnings deficit during Q2.
Reed, who has taken over as acting CMO to improve performance, highlighted high marketing-to-revenue ratios, with costs up to 54% of the section’s revenue during the period, compared to 46% in Q1.
A strategic review of Gaming has led to the company converting its SuperLenny casino into an affiliate website and a series of new product releases, including an update to Guts, which Reed accepts had been “left behind”. Reed also said the company has considered selling off parts of its B2C division.
“I’m not happy [with GiG Gaming] which is why I’ve taken over that,” Reed said in a presentation accompanying the Q2 results. “We have a determined team, but we can do better. It's not good enough based on the marketing spent.
“I will personally ensure this vertical develops. We have seen healthy development in July and August.”