NEW YORK, March 2, 2022 /PRNewswire/ — When Congress made sports gambling illegal at the federal level with the passage of the Professional and Amateur Sports Protection Act (PASPA) on Oct. 28, 1992, online betting wasn’t even a topic of discussion. If someone wanted to place a bet on the Super Bowl or a basketball game, their options were minimal at best: jump on a plane to Las Vegas or phone their local bookie. Fast forward 25 years and the internet is ubiquitous and laws such as PASPA arcane, making May 14, 2018, a day of gambling liberation, as the Supreme Court overturned the law on the grounds it was unconstitutional and commandeered power from states. With the federal ban removed, the majority of states have enacted laws defining legal online gambling to participate in a booming global market. As such, innovation is thriving to offer operators and consumers premium experiences. Playgon Games Inc. (TSX.V: DEAL) (OTCQB: PLGNF) (Profile) is seizing the opportunity, while others in the space, including Boyd Gaming Corporation (NYSE: BYD), MGM Resorts International (NYSE: MGM), Caesars Entertainment Inc. (NASDAQ: CZR) and Zynga Inc. (NASDAQ: ZNGA) also look to capitalize on the momentum building behind online gaming.
- In 2023, online gambling is forecast to reach $92.9 billion, contributing to total gambling revenue worldwide that is expected to reach $525 billion.
- A SaaS company, Playgon develops and licenses its software platform and portfolio of games, which include streaming HD live dealer games and a slate of electronic table games.
- Since launching overseas last spring, Playgon has onboarded 30 operators to date, processing tens of millions of dollars in bets each month.
- Funded, partnered with a unit of betting giant Bally’s, and working with Duane Morris LLP, Playgon is prepared to enter the lucrative U.S. markets in the near term.
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Online Gambling Growth Outstripping Broad Market
Statistics make the opportunity crystal clear. In the United States alone, commercial gaming revenue totaled $52.99 billion in 2021, smashing the record set in 2019 by 21%, according to the American Gaming Association’s Revenue Tracker. Last year’s revenue was a 77% improvement over 2020, a year rattled by the COVID-19 pandemic, which caused casinos to be shuttered for months. The pandemic taught operators a harsh lesson about the importance of offering online gambling, a trend that was already accelerating before COVID ravaged the world.
Globally, online gambling growth is outstripping traditional gambling. Online gambling, also called iGaming, involves any internet-based betting on games of chance, including sporting events, skill games (i.e., blackjack) or virtual slot machines. In 2019, total iGaming revenue reached $58.9 billion, a figure expected to climb to $92.9 billion in 2023. Within that market segment, mobile online gambling is expected to jump from $24.8 billion to $42.5 billion from 2019 to 2023.
Still, these figures are just scratching the surface of the upside potential considering total gambling revenue (both land bases and online) is forecast to total $525 billion next year. The revenue opportunity is not being overlooked by casino operators, which are going all in to get a slice of this booming market. U.S. regulators are also being supportive, with more than 30 states ditching moribund laws prohibiting online gambling in favor of new ones that have launched or will launch new betting markets.
New Guy in the Oligopoly
Gaming operators don’t build their own tech; they rely upon what is ultimately a very select group of Software-as-a-Service (SaaS) companies for the technology infrastructure undergirding their gambling products. By large, the live-dealer market is dominated by Playtech, Evolution Gaming and Microgaming. Playgon Games Inc. (TSX.V: DEAL) (OTCQB: PLGNF) is the savvy upstart that is disrupting the industry with its leading-edge technology with different aesthetics and an emphasis on mobile devices.
Incumbents generally offer generic, similar-looking products focused on desktop and laptop computers. Clearly differentiated, Playgon is using a business-to-business (B2B) strategy to provide a multitenant gateway allowing online operators the ability to offer their customers cutting-edge iGaming software solutions that outclass the stale competition. Playgon prides itself on innovation, modernizing live dealer games while developing mobile designs with a superior UI (user interface) and UX (user experience).
By keeping its attention on businesses for customers rather than the end consumer, Playgon doesn’t have to deal with high customer acquisition costs that stifle profit margins. Its model is to develop and license its software platform and games portfolio to operators. The current slate includes four live dealer casino games and four multiplayer e-table games as well as Daily Fantasy Sports products. Playgon is also in the process of launching nine new e-table games that will include Oddsup Roulette, Hold’em and Multiplayer Blackjack, among others. Security is a top priority with Playgon, which built its platform to include seamless integration in any operator’s system with zero risk to sensitive customer information.
Taking Live Dealer Games to a New Level
Playgon’s live dealer games, comprised of Blackjack, Baccarat, Roulette and its proprietary Tiger Bonus Baccarat(TM), stand alone with respect to appearance and functionality as the most advanced in the market. The design team paid attention to details and ensured that it could meet the demands of every customer, including using ProgressiveWeb App technology to make the platform both device and store agnostic. Distancing itself from peers with an enhanced UI and UX, Playgon’s customers are likely to attract the most desirable player demographic: those who will return remotely.
Playgon appears to have thought of everything down to the minutiae. The company even designed its games to be played in portrait mode only, based on its research that more than 85% of mobile use is in portrait mode, allowing gamblers to remain engaged in their games one-handed on a mobile phone. Connectivity being critical, Playgon built the architecture on the cloud, delivering robust, scalable, high-speed play. Add in the realistic graphics and HD live-dealer streams and it shouldn’t be much of a surprise that Playgon is attracting not only online operators but also casinos, sportsbooks and big database firms.
It’s not easy trying to penetrate a market that is controlled by only a few players and regulated to the hilt. Playgon has navigated this environment remarkably quickly to clear barriers to entry, underscored by its vetted and proven technology, which is resulting in a rapidly growing customer list. It has only been about one year since Playgon officially planted its flag in the market with the receipt of a Malta Gaming Authority license last March. Its first license paved the way for partner SWINTT Malta Ltd, a fast-growing iGaming content supplier and subsidiary of Glitnor Group, to begin offering the Playgon product suite to its online gaming operator customers.
An “if you build it, they will come”-type of scenario has ensued with an influx of international deal flow. June was a big month featuring Playgon going live in South Africa via its partner, Intelligent Gaming (PTY) Ltd. At the time, six operators were onboarded, hosting more than 220,000 bets and 6,000-plus unique visitors in the first month of operations. By month’s end, a seventh operator was onboarded.
By August, 14 operators were using Playgon’s Vegas Lounge live-dealer platform. In September, SWINTT onboarded three more operators, and then things really heated up as the company kept scaling. In October, the number of live operators was 23, and Playgon’s platform had surged to $54 million in player betting turnover in the first half of the month, up from $1.6 million for the entire month of September. From October through January, another seven operators were brought onboard, upping the international client count to 30.
Veteran Team Leading Charge into U.S. Market
With international sales humming along, Playgon is eying the lucrative U.S. marketplace. Leading the team is CEO Darcy Krogh, a seasoned iGaming industry veteran with two-plus decades of senior-level management experience. He was a founder of iGaming trailblazer Chartwell Technology in 1999, which he sold to Amaya Gaming Group in 2011. Following the sale, he served as vice president of Amaya where he was instrumental in the sale of the company’s business-to-business assets to NYX Gaming Group in 2015.
The team also includes Guido Ganschow as president of Playgon Interactive. Ganschow is recognized globally as an authority in developing real-time, live-dealer tech and platforms on the back of successful designs, builds and launches of state-of-the-art systems in Europe and Asia.
Steve Baker, Playgon chief operating officer, brings decades of operational and M&A experience to Playgon, having served as VP of operations for Shaw Communications where he oversaw sales rising from $300 million to $2.8 billion.
The acumen of the team is evidenced in the stellar international growth and domestic growth that should easily follow. Playgon has a major player as a partner to backstop the move into the U.S. after teaming with Solid Gaming, a business of global casino-entertainment company Bally’s Corp. Bally’s, which generated $1.3 billion in revenue last year, owns 14 casino across 10 states. After months of collaboration and testing to customize and integrate Playgon’s tech to guarantee performance in the Bally’s ecosystem, Playgon received the highest of acclaim and is now live with Solid Gaming.
To keep expanding, Playgon set out in October to raise $5 million through a private placement. Owing to strong interest, the company more than doubled its original target to raise $10.5 million, capital that should increase Playgon’s velocity into the American markets.
As has become a theme, Playgon is steadfast in its aggressive growth model. The company contracted Duane Morris LLP to represent it in its application process to license its live-dealer technology in legal markets throughout the country. Intentions are to first seek licenses in New Jersey, Pennsylvania and Michigan, with other states to follow. The company has plenty of potential clients to showcase its tech, as the U.S. is home to nearly 900 casinos.
Online Is the Place to Be
Companies of all types are looking to the online gambling market as a driver for the top and bottom lines going forward. These companies are jockeying for share and looking to strengthen their positions to capitalize on the burgeoning markets locally and across the planet.
Boyd Gaming Corporation (NYSE: BYD), a geographically diversified operator of 28 gaming entertainment properties in 10 states and 5% equity owner of sports-betting and iGaming operator FanDuel Group, finished 2021 with record quarterly performances across every segment of its operations. Boyd reported fourth-quarter 2021 revenues of $879.8 million, up 38.4% from $635.9 million in the fourth quarter of 2020. The company reported net income of $109.8 million, or $0.96 per share, for the fourth quarter of 2021, compared to $83.3 million, or $0.73 per share, for the year-ago period.
MGM Resorts International (NYSE: MGM) and BetMGM, its sports betting and iGaming operator, have teamed up with SportsGrid, the nation’s first and only 24-hour sports wagering streaming network. The two forged a strategic partnership in February concentrating on integrating BetMGM content across SportsGrid’s original, live programming. The content will be supported by television and social media advertising.
Caesars Entertainment Inc. (NASDAQ: CZR) moved with a purpose following law changes to allow online betting in New York. Named one of the first operators to receive a license for mobile sports-wagering operations in the state, Caesars made history with its online and mobile sports betting app, Caesars Sportsbook, accepting its first sports wagers in the Empire State during January.
Zynga Inc. (NASDAQ: ZNGA) became famous for Farmville, but the social game developers have actually had a number of hits, including Zynga Poker. In January, Take Two Interactive agreed to pay $12.7 billion to acquire Zynga. Take Two paid a 64% premium to the value of the company the day before the deal was made public in order to establishe itself as one of the largest publishers of mobile games, the fastest-growing segment of the interactive entertainment industry.
As big as the online gaming market is today, it is only just getting started as it moves towards making up 20% of the overall gambling market. The pandemic opened everyone’s eyes to the opportunity at hand as the trend gains steam to keep fueling demand going forward.
For more information about Playgon Games, please visit Playgon Games Inc.
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