Richard Brown’s tenure as Gaming Innovation Group (GiG) chief executive began with a major change of direction, with the sale of its B2C assets to Betsson. Almost four years on, and with business booming for the B2B supplier, he’s poised to make another huge call with plans to split the business into media and platform suppliers.

When he was confirmed as permanent CEO of Gaming Innovation Group (GiG) in November 2019, Richard Brown pledged a focus “on delivery, execution and optimisation, putting us on a path for great focus and renewed growth”.

The business reported revenue of €43.0m for 2019, at a time it encompassed B2C operations, a platform business and affiliate marketing operations under the GiG Media banner. Brown then divested the B2C operations to Betsson early in 2020.

This, he has explained previously, created a focused business, with staff putting all efforts into the B2B platform and media operations.

In 2022, Brown’s third full year as GiG CEO, revenue hit €90.1m, €92.5m on a pro forma basis including a full year’s contribution from sportsbook platform Sportnco. Revenue has now doubled over the course of his tenure.

These achievements are just another step on the business’ journey, in Brown’s eyes. It’s something he loves about the business.

Gaming Innovation Group office logo 2
“There’s always so much opportunity,” richard brown says of giG

“I think one of the wonderful things about working at GiG is it never really feels like mission accomplished, because whenever you start looking at another avenue or aspect of the company, there’s always so much opportunity,” Brown says. “It’s one of the great things about working here and one of the great things about the company as a whole.”

He’s far from done – there’s still huge amounts of potential for the business, in a changing industry landscape.

“Now we’re moving into another phase, but we’re still consistently looking at areas where we could be stronger, and that makes it a really nice place to work in that sense.”

GiG splits the deck

That new phase, of course, represents Brown’s second major call as chief executive of GiG, if not the third following the €51.3m acquisition of Sportnco. In February the business initiated a strategic review to split the company into independent media services and platform and sportsbook companies.

At the time GiG said the split would “sharpen the focus for each business segment”, with potential to grow much faster than in the current corporate structure.

In Brown’s eyes each division has already been run separately from an operational perspective. While there’s no defined timeline for the review and any further moves, he believes the move will create value, both for shareholders and by accelerating the growth.

Richard Brown, GiG CEO
GiG will take its time over assessing the opportunity to split the business into media and platform companies

He won’t be drawn on the timeline: “We’re not in a rush. We’re not doing it for any other reason other than we think this is the best strategic delivery mechanism for both business units over the long term.

“Therefore we will take our time as always, be pragmatic and focus on the execution to ensure that everything is in place to provide both businesses with the ultimate and optimum structures.”

This harks back to Brown’s approach to GiG’s acquisition of Sportnco. Similar to the demerger plans, the focus for integrating the new sportsbook was on getting it right, rather than getting it done fast.

Growth across B2B supply and affiliate arms

When GiG divested its B2C sites, it was largely down to high costs associated with running a customer-facing operation. Sportnco, on the other hand, was acquired to strengthen the supplier’s hand in the sports betting vertical. Weaknesses were identified, then addressed.

The demerger, on the other hand, is less about weakness and more about strengths. Both the GiG Media and the platform business are surpassing expectations.

Revenue from affiliate marketing was up 37% year-on-year in 2022 to €61.7m, thanks to a stellar performance bolstered by an uplift in first time depositors thanks to the winter World Cup. Growth will continue thanks to new market entries, a deal with News UK and the acquisition of AskGamblers from Catena Media.

That deal, for what was once Catena’s flagship brand, both strengthens GiG Media’s position in some territories, while giving it a route into others.

AskGamblers
ASKGAMblers strengthens GiG Media’s presence in existing markets, as well as adding new territories

“One of the wonderful things about the media business is that there’s so many markets and so many we’re not necessarily strong in,” he explains. “With AskGamblers it added a lot more brands and products to our portfolio, such as the UK where we’re becoming stronger with News UK, and others where it was consolidating our position.

“It’s a blend of increasing our scale and in others branching into newer territories. It’s been a month since we took over that asset, and we know there was going to be work to do, but our teams are excited to continue improving that product and its performance.”

Platform for success

The platform division, at a different stage of its growth trajectory to media, Brown previously said, is on its own path. Revenue for 2022 was up 33% to €28.3m, aided by a strong pipeline and six new deals in Q4 alone.

A key component of the technology solutions business has been its retail to online strategy, taking land-based operators into the digital space. This isn’t for everyone, however.

“We’ve seen really strong success from retail to online, but in the broader market we’ve seen it not going as well as people may have expected,” he explains. “The retail to online client will play a meaningful role in that.

“We’re evaluating the market opportunity and whether both partners are going to be in the best position. We see it as a strong structural part of what we offer but, in some markets, some clients will require an education to make them successful.”

There’s also significant growth potential through Sportnco; currently 37% of GiG’s clients use its sportsbook technology and the sports betting vertical is largely untapped by the supplier so far.

“Sportsbook is an incredible industry that has a tremendous amount of great products and structures we can bring into the offering,” Brown says. “That will drive up the percentage [of clients using the sportsbook] and we will bring on a number of new clients that are more sportsbook-led.”

Tier one experience

The division can now draw on Marcel Elfersy’s experience, after the former 888 VP of business development and Impala Digital CEO joined as chief commercial officer in December 2022. He’s already made an impact, Brown says.

Marcel Elfersy, GiG
The appointment of Marcel Elfersy as CCO for the platform business adds tier one experience to the team

“As a business we go through different lifecycles, and it was important to bring in someone who’s experienced at operating at a tier one level, both on the operator and commercial side.

“Having someone come in to educate our potential clients on what they could have, how GiG can provide that is a real strength.

“We believe that we have a really good commercial team and that he can continue to add to that, then accentuate the overall performance of that team, but also the business overall.”

World Cup triumphs and further scope for GiG’s platform growth

The platform business has made a virtue of succeeding in markets traditionally considered difficult, such as France and Argentina. It certainly helped sportsbook operations to have these two countries in the final.

Despite some disruption for the platform business, thanks to domestic seasons taking a break for the tournament, GiG reported some all-time highs for the World Cup, Brown says. There was also a regional impact in Latin America from Argentina’s win, even in bitter rivals Brazil.

Argentina World Cup
Argentina’s World Cup win benefitted sportsbooks across Latin America

Growth is not spurred solely by the sportsbook, however. Ontario’s igaming market is performing well for the supplier, in spite of fierce competition.

“The brands we launched at the end of Q3/Q4 are performing well,” Brown says. “We’re happy with how they’ve grown and they’re getting to some good numbers after a short period of time.

“I know there’s a number of operators live there, but you could also compare that to a market such as Sweden which almost has more than 60 licensees (and over 100 brands) for a country with 10 million people. The UK is a much bigger market, but there’s hundreds and hundreds of brands there.”

Ontario, he concedes, is unique compared to the rest of North America and more similar to a European structure. “You can have a very open market structure while being very successful,” he adds.

In short, there’s a wealth of opportunities ahead for GiG, across the affiliate marketing and technology provider units. There’s potential for further dealmaking, too.

Are the deals done?

On the subject of M&A, Brown says the business is constantly evaluating new opportunities, having previously enjoyed significant success across GiG Media and the platform arm.

“We’re always evaluating various different M&A opportunities across the group and we’ve had a good deal of success with it, both recently with Sportnco and then AskGamblers.

“It remains an element that we’ll continually evaluate,” he adds. “That was one of the elements we looked at during the strategic review; how does the best M&A strategy work as part of a group or for an independent and, ultimately, [that will] play a role in how we structure our thought processes.”

This all positions GiG at the precipice of another transformational period. It has two distinct units that are performing strongly, to the extent that management appear confident they could thrive independently.

Brown has already made one major call, that has taken the supplier through a transformation from a supporting player to an operating business, to a skilled, if multifaceted solutions provider. The split may take it to new heights.

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