In October, Elys announced the launch of its new SportBet online and mobile sports betting brand in the US. This marks its first solo project in the US, following a number of partnership ventures.
Just weeks later, details emerged of a market access agreement with Caesars Entertainment in Colorado. Elys will launch in the state via SportBet, although it is not yet clear when this will take place.
Both events took place after Q3 ended but, while speaking about the quarter, Elys executive chairman Mike Ciavarella made reference to the developments. He described this activity as “critical” to its large-scale expansion plans in the US and how this will benefit the business moving forward.
Ciavarella added that Elys is confident of replicating its success from the Italian market in the US in the long-term.
“In Q3, we laid critical foundations for a large-scale expansion into the rapidly growing online sports betting market in the US and Canada,” Ciavarella said. “Over the past few years, we have executed our go-to-market strategy by making significant investments related to our product platform and infrastructure development for our future commercial operations in North America.
“Elys now stands at the inflection point where these investments begin to convert into revenues in 2024. The impending launch in Colorado serves as our initial online sports betting market entry point and we regard our partnership with Caesars as a gateway to future opportunities in other states.”
Elys remains committed to Italy
While plenty of noise is being made about efforts in the US and Canada, Ciavarella stresses Elys also remains focused on Italy. He picked out several developments in the market and how these will support Elys with its ongoing strategy.
“We are maintaining our solid and stable operations in the Italian market, where we recently introduced a revamped platform and all-new product line-up,” Ciavarella said.
“This platform not only enhances the overall player experience but also incorporates changes that significantly reduce expenses and puts our Multigioco subsidiary on track to meet the company’s profit goals through 2024.”
Revenue down in Q3 but net loss shortens
Turning to the financial performance of Elys in Q3, revenue for the three months to 30 September hit $8.4m (£6.7m/€7.7m). This was 11.8% down from $9.6m in the previous year.
Elys said this decline was primarily due to higher pay-outs benefiting sportsbook customers. It also noted a fall in web-based turnover due to a reduction in online casino and poker offerings in Q3. This, Elys said, reduced blended revenue conversion.
Total handle was also down by 2.4% to $162.5m in Q3. Again, Elys noted the impact of a major platform switchover with the aim of improving online casino and poker offerings in Italy.
Reduced spending pushes net loss down at Elys
As for costs, total operating expenses were 7.9% lower at $11.7m, with spending down in all areas.
Other expenses hit $294,861, leaving a pre-tax loss of $3.2m, an improvement on $3.7m last year.
Elys also received $4,240 in tax provision. This meant it ended Q3 with a total net loss of $3.2m, compared to $3.8m in the previous year.
Net loss on track to reduce in full year
Looking at how Q3 impacted year-to-date figures at Elys, revenue for the nine months to 30 September was level at $32.2m.
Operating expenses were 0.3% down at $40.7m, while Elys also reported $502,847 in other costs. The latter was 62.6% less than in 2022, with Elys last year having to account for changes in fair value of contingent purchase consideration.
As such, pre-tax loss was reduced from $10.0m to $9.0m. Elys also received $67,199 in tax provisions, meaning net loss for the period was $8.9m, compared to $10.2m in 2022.
“As we begin our strategic rollout into the vast addressable online sports betting market in the US, we are confident in our ability to replicate our Italian success story,” Ciavarella said.
“The US sports betting opportunity contains decades of pent-up demand. We expect to carve out significant market share with our ‘best odds’ approach and user-friendly platform as our experience in Italy demonstrates.
“Our measured and strategic approach to this vast market sets us apart.”
Elys issues update on Nasdaq de-listing
Elys also took the opportunity to update the market on its Nasdaq de-listing. The business on 17 October announced its de-listing from the Nasdaq Stock Exchange.
This led to Elys common shares trading on the OTC markets in October, where they continue to trade. Elys said it will remain listed the OTC markets until further analysis of the exchange listing of common shares is completed
“Elys’ management team and board of directors are diligently assessing various major listing venues to determine the most strategic path forward, one that will ultimately offer the best opportunity to maximise shareholder value in the long term,” Elys said.