Gaming Innovation Group (GiG) has announced its intentions to initiate a strategic review of its operations to assess whether a separation of its sportsbook platform and media businesses would be sensible.
Aiming to ‘sharpen the focus for each business segment’ and maximize shareholder value, the proposals would see GiG separate into two listed companies.
Proposals would see the distribution of Innovation Labs Ltd subsidiary to GiG shareholders, dividing the GiG Media and Platform and Sportsbook divisions.
The review has been initiated with immediate effect and will continue throughout 2023, and aims to outline the strategic and operational objectives to execute a split.
Richard Brown, CEO of GiG, said: “This is a very exciting time, both for the company and its employees but also for the shareholders of GiG. I strongly believe that a split has the potential to remove hurdles and unleash new possibilities for each business segment and that we can create two very successful companies.”
Following the potential split, the Media Services business would generate online gambling leads through online media buying and publishing.
Meanwhile, the Platform and Sportsbook business would utilize the Sportnco platform, offering front-end development and other managed services.
GiG disclosed that it would only execute any move with necessary corporate action, including shareholder approval.
Petter Nylander, Chairman of the Board, said: “Each of our Platform and Media businesses has reached such a maturity where it makes perfect sense to evaluate a potential split. We are looking forward to initiating the review and seeing how we can maximize operational output and shareholder values.”
Q4 results show media momentum
News of the review came as GiG revealed its Q4 results, delivering record revenues of 26m, up 44% year-over-year, of which 35% was organic.
Across its media business, revenues were at an all-time high in Q4, at 17.8m, up 40% YoY. This was driven by the launch of five new media brands in two markets, as well as signing a lucrative deal in the UK with News Corp UK.
Growing across the Americas, GiG noted that revenues from the region increased 136% YoY, and their share of media revenues accounted for 23% of revenue in the quarter, up from 13% Q421. Meanwhile, web traffic amongst its US assets grew 76% YoY.
Moreover, the media business agreed to acquire the casino affiliate websites AskGamblers.com, Johnslots.com, Newcasinos.com and several smaller domains from Catena Media.
With the media business increasing marketing spend by 80%, it has seen First Time Depositors (FTD) end Q4 at 115,900, an 91% increase YoY.
Finally, the media business ended Q4 with adjusted EBITDA of €8.9m, up 52% YoY at a margin of 50%.
CEO Richard Brown lauded the strong momentum of the Media business in Q4, noting: “Our Media business continued the strong momentum, referring 115,900 new first-time depositors to partners in the quarter. Above-average margins for the casino side enabled our revenue share structure to deliver exceptionally well.
“The FIFA World Cup also provided a strong period for our player acquisition plans. 2022 has continually been a record year for our Media business, the team have executed with laser focus across our strategy and built up several additional revenue streams that we believe will continue to support the growth of the segment.
“I am immensely proud of the team’s hard work, execution and continuing effort.”
Record across Sportsbook division too
On the Platform and Sportsbook side of the business, GiG also reached all-time high revenues of 8.2m, up 54% YoY. This was largely driven by signing six new clients across both land-based and online operators.
GiG now has 62 live brands with its Platform and Sportsbook unit and has a further 14 brands to launch in the coming months.
The Platform and Sportsbook business ended Q4 with adjusted EBITDA of 1.8m, up from 0.4m one year ago.
On the platform unit, Brown added: “We have transformed the Platform & Sportsbook business over the last three years from a white-label model into a SaaS structure that continues to gain momentum.
“Yearly growth in underlying SaaS and related revenues has been strong, with the last four years’ CAGR at 65% (45% excl. Sportnco). Our teams have transformed the business and made meaningful progress across product, technology and operations during 2022, and we look forward to continuing execution towards our long-term goals within the segment.”
Despite increased marketing spending across media, the GiG group posted an adjusted EBITDA of €10.8m for Q4, up 71% YoY.
Overall, in an assessment of corporate performance, Brown described the results as ‘stellar’, concluding that there is ‘further belief that our strategy and long-term objectives are providing exciting opportunities’.
He told investors: “We continue to see good demand for our products and a global regulated footprint in 30+ markets continues to position us exceptionally well to be a supplier of choice for partners.
“We enter 2023 with the further belief that our strategy and long-term objectives are providing us exciting opportunities to continue to develop the business, provide earnings growth and ultimately increase shareholder value.
“Our employees and I are eager to push forward with conviction and ambition towards growing the business.”
