Gaming Innovation Group (GiG) will return to the sports betting vertical with a bang in 2022 thanks to its acquisition of B2B sportsbook and platform provider Sportnco.
The deal, for an initial €50.8m in cash and stock, was announced just before Christmas, and sees the supplier’s footprint expand significantly to 55 clients across 25 markets.
Coupled with a strong presence in its native France, Sportnco has struck deals in territories such as Spain and Greece and has established a presence in Latin America. Clients range from established online names such as Betway and NetBet, to land-based operators moving online including Casino Gran Madrid and leading Peruvian operators Casino Atlantic City and Olimpo.
In November, GiG chief executive Richard Brown talked of the importance for building for the future, and the value of talking a strategic position in an early-stage market before it became a growth territory. Considering Sportnco’s client base and geographic footprint, he has found a partner that does the same.
The deal, he says, has been a long time coming, and was flagged by Oakvale Capital – which last year alone played a key role in transactions involving Scientific Games, Super Group, Superbet and Evolution, among others.
“I had a look and was straight away attracted by the product in terms of the quality and client base and number of markets, which are highly regulated, growth markets, driven by digitalisation,” Brown explains.
“The more I looked at it the more of a match it was. We’ve prioritised regulated markets, and to see them certified in a similar, but almost completely complementary, number that was something that really attracted me.”
Sportnco, Brown continues, slotted into GiG’s key strategic pillars of increasing the number of addressable markets (and the speed at which it could enter), and providing a sportsbook product that was proven in highly competitive jurisdictions.
Sportnco, it should be noted, was projected to generate revenue of €9m in 2021, with EBITDA expected to reach €5m – no mean feat in the highly taxed French market. Its technology will become the supplier’s core sportsbook product, replacing the in-house solution, with existing betting clients migrated to the new solution over time.
The deal will be funded through €23.5m in new GiG shares, with the €27.3m cash portion of the deal to be largely funded by a €25m investment from its long-term partner, New Zealand casino operator SkyCity Entertainment Group.
The supplier’s managed services division has powered SkyCity’s online casino offering since 2019, and now it becomes a shareholder in the business. Brown explains that having looked at various structures to fund the deal, being convinced it would succeed, he raised the prospect of bringing SkyCity into the mix.
“From my side we have a strong focus around the retail conversion of casino, we see that as a real strength of ours both with the technology, the platform and the managed services we offer to SkyCity,” Brown says. “Bringing them in lets us understand better how that land-based structure works, and to develop products that are better suited to the land-based client.”
The SkyCity team, he continues, were very supportive of those efforts and saw it as an opportunity to pursue further digital growth. It sees its investment in GiG as an opportunity to get to grips with the processes of running a digital operation, Brown notes.
As the deal nears its close, Brown and his team – which will be bolstered by Sportnco CEO Hervé Schlosser – will pursue opportunities to leverage their expanded reach in existing markets, while moving into additional territories.
In particular, he notes, GiG will be able to compete in sportsbook-led markets, where its casino offering would either have not been legal, or of less interest to customers. “We’ve got a roadmap ahead for GiG and Sportnco has the same, but of course there is a significant number of opportunities for each business to cross-sell to existing customers and work with customers that we haven’t worked with in the past,” he explains. “It’s the same on the sportsbook front.
“We’re anticipating completing the deal towards the middle or end of Q1, and we’re working in the background to make sure we have the plans in place and can really get going.
“We don’t want to rush things because we want to do things exceptionally well, so we will take that approach but both teams have already started getting to know one another.”
That work will continue once the deal closes, which will have almost doubled the supplier’s reach and significantly enhanced its product portfolio. GiG has been reshaped under Brown’s leadership, with its focus refined to the successful media arm and growing platform division. Now betting can once again become a key driver.
“If I looked at how much it would have cost to pursue that addressable market it would have cost millions,” Brown adds. “This allows us to do that, without having to spend that time and money.”