GAN Limited saw a 6% year-over-year decrease in revenue in the first quarter of 2023, but based on new partnerships and growth in Mexico, the B2B and B2C gaming and legal sports betting technology company believes it won’t continue that trend.
GAN reported Q1 revenue of $35.1 million during a period that ended March 31, CEO Dermot Smurfit said Wednesday during a conference call.
The drop in profits, he said, stems from a decrease in contractual revenue rates from GAN’s largest B2B customer. This led to 16% less B2B revenue, which reached $11.3 million in Q1.
Thanks to Coolbet, an online betting site owned by GAN Sports, expansion and growth in Latin America, including partnerships with Mexican soccer teams, helped create a B2C segment revenue of $23.9 million. That fell short of last year’s same quarter mark by about $500,000 due to the weakening of currencies, Smurfit said.
American profits
While Europe made up most of GAN’s B2C revenue, Latin America accounted for the second most at $11.3 million. The U.S. market made up $8.5 million and is seen as an area of upcoming growth for the company.
One of the highlighted areas by Smurfit was the re-upping of a gaming partnership with FanDuel, as well as jurisdiction expansion and retail sportsbook launches in Michigan, New Jersey, and Pennsylvania.
Another key point for GAN, which is operating in 18 states, is fueling retail and mobile sportsbook technology for WynnBet. It launched at Encore Boston Harbor in Massachusetts in February and plans on rolling out more Wynn markets, including Nevada.
GAN pulled out of the Ontario market to allocate more funds and resources to Latin America with Coolbet, where growth from the World Cup last year and new user retention helped B2C profits. GAN had higher operating costs due to more marketing in that region in the first quarter and plans to continue expanding in Mexico.
Strategic review delayed
GAN wasn’t ready to make any predictions on what the rest of 2023 will look like.
“Our recent announcement and term loan transaction bolstered our financial position and allowed us to modify the conditions of our term loan, significantly reduce our interest expense and strengthen our balance sheet,” Smurfit said. “To be clear, this transaction should be viewed as a key step in the broader review process, but an important one that allows us to evaluate the options available to us from a stronger position.
“Overall, we have been pleased with the nature of the strategic review up to this point, and we will provide updates as appropriate as the process unfolds. At present, there is no timetable for the completion of that process.”
GAN hopes to have its technology and/or sportsbook running in every legal sports betting state at some point. Smurfit is confident this focus on the U.S. market means profitable days are ahead for GAN Sports.
