Gambling.com Group has reported healthy organic growth in North American sports betting and online casino markets which helped boost the company’s profile against a backdrop of slower state launches.
The affiliate marketing publisher reported total revenues of $23.5m for the third quarter of 2023, marking an uptick of 19% year-over-year. North American revenue provided the bulk of this growth as it jumped 42% to $12.9m – meaning the region accounted for over half of all corporate turnover.
The firm attracted 86,000 new depositing customers, an uptick of 26% YoY as the start of the new NFL season attracted new bettors.
Comparing annual state markets, the new launches consist of Ohio and Massachusetts but compared to 2022 when New York launched, many affiliates have cited weak market conditions in the US.
In Q3, only Kentucky went live, but the online market launched two days before the quarter ended, meaning GDCG had to rely on “robust” organic growth.
Charles Gillespie, CEO and Co-Founder of Gambling.com Group, commented: “Our third quarter results highlight our consistent performance driven by robust organic growth in North America. Even in what is traditionally a seasonally slow quarter, we grew new depositing customers 26% to surpass 86,000 which contributed to 19% revenue growth to $23.5m, adjusted EBITDA of $6.1m and free cash flow of $1.6m.
“Third quarter North American revenue of $12.9m includes significant growth in our owned assets and a break-out performance from our media partnerships at the start of the fall sports season. Our ability to quickly scale our strategic media partnerships complements the growth from our influential-owned websites. This results in consistent year-over-year market share gains in existing states even as we face tougher comparisons given the significant organic growth we have already achieved.”
Despite increasing revenues, rising costs – the cost of sales increased 253% – impacted the firm’s bottom line as EBITDA declined 6% YoY to $6.1m at a margin of 26% compared to Q3’22 margins of 33%.
The firm invested 49% more in technology compared to the same period last, year and doubled losses associated with movement in credit allowances. Nevertheless, the firm still made an operating profit of $4.7m, up exponentially on an annual basis.
Meanwhile, net income came in 122% higher than a year ago at $5m.
The publishing firm provided guidance on its full-year 2023 performance, projecting revenue of $100m-$104m and adjusted EBITDA between $36m-$40m.
This guidance assumes that there will be no new state launches for the rest of 2023, yet leadership states that it “expects” new markets in both sports betting and online casino in 2024.
“Gambling.com Group is expected to continue to benefit from many near- and long-term opportunities to deliver profitable organic growth. These include further market share gains in existing markets, the benefit from expected future expansions of igaming and online sports betting in new markets in North America and around the world, our ability to scale and optimize our media partnerships and further growth in our more established European markets.”
While several new sports betting markets will likely launch next year, things are looking a little more complicated on the online casino front. Rhode Island will launch next year but Bally’s holds a monopoly there and, with its strong customer database from the land-based presence there, opportunities for affiliates seem unlikely.
Meanwhile, there are limited choices for online casino expansion in 2024 after a miserable 2023 legislative session. Sen. Joseph Addabbo has indicated he will once again table online casino measures next year but after igaming failed to make the FY24 state budget, it will be a tough process.
Last week, Gambling.com Group became one of the six founding members of the Responsible Gambling Affiliate Association which will aim to promote ethical operations in the US.