GAN’s Smurfit says company is undergoing B2C strategic review

Review stamp with a pile of paperwork
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After a tough Q4, GAN CEO Dermot Smurfit announced the company is undergoing a strategic review of its BTC segment. He admitted that, while economic headwinds played a factor, the lackluster quarter was partially influenced by the “suboptimal execution” of the company.

GAN won’t offer financial forecasting given strategic review

Accordingly, GAN has made a strategic decision to not pursue and invest further in our exclusive content strategy and a reassessment of our growth strategy related to the B2C segment. Smurfit elaborated on the decision on the company earnings call, clarifying that the group still believes in the company’s potential.

“Let me be extremely clear on a very important point. I and my entire executive group firmly believe that there is tremendous unrealized value in our proprietary technology offerings, our [panted] IP, and a growing profitable B2C business that generated annual revenue of nearly $90 million this past year, which is well north of our current trading market cap,” Smurfit explained.

“The Board and I feel it’s highly prudent at this time to explore all options to realize this value. It’s also worth noting given the range of potential outcomes related to the strategic review, we do not currently have an adequate level of visibility to provide guidance for 2023 within a reasonable range. That said, we do expect a relatively swift resolution to the strategic review process and hope to be in a position to provide our financial outlook for 2023 at some point in the very near future.”

Coolbet is a tale of two markets across Ontario and Mexico

One B2C effort that did not perform well was Coolbet Canada, which exited the Ontario market earlier this year.

“The sheer number of entrenched operators and heightened promotional environment did not present a clear path to profitability or achieving an adequate return on capital relative to existing Latin American market opportunities,” Smurfit said of the Ontario endeavor. “These resources both operational and financial will be focused towards higher-return markets and cash flow generation.”

Latin America proved to be one of the lone bright spots for the company, particularly Mexico, where Smurfit said the company, “has a good chance at pole position.” He also lauded the company’s partnership with WynnBet, which included a recent strong launch in Massachusetts.

There is also hope that the new tech stack, which will include WynnBet, will improve things during 2023.

“When it comes to technical efficiency, we are rolling out GameSTACK 2.0, our new B2B technology offering in the US. This will bring together the best elements of new and existing tech to drive efficiencies and deliver a superior product to our clients at substantially lower cost to GAN. All new GAN clients will be on GameSTACK Version 2.0. And importantly, the implementation and eventual sunsetting of GameSTACK 1.0 will conservatively result in $10 million in annual cash savings.”