Canada
BRAGG GAMING GROUP 2021 REPORTS RECORD FOURTH QUARTER RESULTS AS REVENUE RISES 14.4%
Bragg Gaming Group, a global B2B gaming technology and content provider, today reported record financial results for the fourth quarter and full year ended December 31, 2021. The Company also provided an update on its strategic growth initiatives and reiterated its full year 2022 revenue and Adjusted EBITDA guidance.
Summary of Q4-21 and FY-21 Financial and Operational Highlights
|
Q4-21 |
Q4-20 |
Change |
|
|
Revenue |
ā¬15.8 |
ā¬13.8  |
14.4% |
|
Gross profit |
ā¬8.0 |
ā¬6.0 |
33.3% |
|
Gross profit margin |
51.0% |
43.8% |
720bps |
|
Adjusted EBITDA |
ā¬1.5 |
ā¬1.3 |
22.2% |
|
Adjusted EBITDA margin |
9.8% |
9.1% |
70bps |
|
Wagering revenue |
ā¬3.1B |
ā¬3.4B |
-8.4% |
|
Euros |
FY-21 |
FY-20 |
Change |
|
Revenue |
ā¬ 58.3 |
ā¬ 46.4 |
25.6% |
|
Adjusted EBITDA |
ā¬7.2 |
ā¬5.5 |
29.8% |
|
Wagering revenue |
ā¬14.3B |
ā¬11.8B |
21.1% |
Ā
Management Commentary
“The 2021 fourth quarter concluded an active and productive year for Bragg as continued execution on our key strategic initiatives drove significant operational accomplishments and strong financial results,” said Yaniv Spielberg, Chief Strategy Officer for Bragg Gaming. “In the fourth quarter we went live with our iGaming offering in the newly regulated Netherlands market and also went live in the U.K, the world’s largest iGaming market. Since the beginning of 2021, we have introduced player-popular content in six regulated European markets, increasing our total addressable market (“TAM”) by more than $10 billion to approximately USD$13.5 billion. We have also made significant progress towards our entry into additional new markets and expect to go live with our games in the U.S. and Canada later this year. Furthermore, we have also made substantial progress on our initiative to offer more new high-performing propriety and exclusive third-party online content through our June 2021 acquisition of Wild Streak, the recent introduction ofĀ our first new internally developed games and new exclusive content licensing agreements with leading game developers. Bragg’s continued progress with its new market and content monetization initiatives, combined with 42% growth in new customers in 2021, drove our strong fourth quarter and full year financial results.
“Fourth quarter revenue of EUR ā¬15.8 million (USD $17.5 million) and Adjusted EBITDA of EUR ā¬1.5 million (USD $1.7 million) surpassed the preliminary results we provided last month and were both fourth quarter records. As a result, 2021 full year revenue and Adjusted EBITDA rose 26% and 30%, respectively to records of EUR ā¬58.3 million (USD $64.7 million) and EUR ā¬7.2 million (USD $8.0 million). In addition, the growing mix of higher gross margin in-house content and platform revenue contributed to a record quarterly gross profit margin of 51% in the fourth quarter, reflecting a 720 basis point year-over-year improvement. Our strong margin performance in the quarter highlights the significant progress we’ve made against our goal to grow gross profit margin to approximately 60% by 2024.
“Our operating momentum has continued in the early months of 2022.Ā We also continue to make progress on closing our acquisition of Spin Games as Bragg has completed all of its regulatory requirements. We are now awaiting final review by the sole remaining regulatory body which is expected to be complete in the next few months. Importantly, we have made substantial progress on the integration of the Spin Games technology platform with our ORYX platform and have already submitted the integrations for certification by various approved U.S. gaming laboratories. As such, once we receive the remaining required regulatory approval to complete this acquisition, we expect to be able to introduce our iGaming content to players in a number of U.S. states very quickly. Importantly, the pace of U.S. deployments will benefit from Spin Games’ existing relationships with more than 30 U.S. iGaming operators.”
Mr. Spielberg concluded, “Our planned entry into the U.S. and Canada as well as additional regulated European markets this year has Bragg on track to grow our year-end 2022 TAM to more than USD$21 billion. The strong performance we have achieved in a number of our recently entered markets as well as our existing markets in the early months of 2022, and the ongoing roll-out of our new proprietary games, amplifies our confidence for continued operating momentum. As a result, we are reiterating our outlook for 2022 full year revenue of EUR ā¬68-72 million (USD $76-80 million) and Adjusted EBITDA of EUR ā¬9.5-10.5 million (USD $10.5-11.7 million). The midpoints of these rangesĀ represent growth of 20% and 39%, respectively, over reported full year 2021 revenue and Adjusted EBITDA. We believe the ongoing execution of our operating priorities favourably positions Bragg to both further accelerate this growth in 2023 and create new near- and long-term shareholder value.”
Fourth Quarter 2021 Financial Results and other Key Metrics Highlights
- Revenue increased by 14.4% toĀ EUR ā¬15.8 million (USD $17.5 million) in Q4 2021 compared to EUR ā¬13.8 million (USD $15.3 million) in Q4 2020.Ā
- Wagering revenue generated by customers decreased 8.8% to EUR ā¬3.1 billion (USD $3.4 billion) compared to EUR ā¬3.4 billion (USD $3.8 billion) in Q4 2020 as a result of changes in the product mix, towards PAM, managed services and proprietary content which drove improved gross profit and Adjusted EBITDA.
- Gross profit increased by 33.3% to EUR ā¬8.0 million (USD $8.9 million) from EUR ā¬6.0 million (USD $6.7 million) in Q4 2020, reflecting higher revenue and a 720 basis point margin improvement to 51.0%.
- The margin expansion is primarily the result of the continued shift towards a higher proportion of revenues from iGaming and turnkey services, which have lower associated cost of sales when compared to games and content.
- Net loss for the period was EUR ā¬1.6 million (USD $1.8 million), a decline from a net loss of EUR ā¬5.3 million (USD $5.9 million) in Q4 2020, primarily due to higher gross profit and a reduction in costs related to deferred consideration payable, partially offset by the incremental increase in employee costs and professional fees as a result of the Nasdaq listing.
- Adjusted EBITDA was EUR ā¬1.5 million (USD $1.7 million), an increase of 22.2% compared to EUR ā¬1.3 million (USD $1.4 million) in Q4 2020. Adjusted EBITDA margin increased by 70 basis points to 9.8%.
- Cash and cash equivalents as of December 31, 2021 was EUR ā¬16.0Ā million (USD $17.8Ā million).
2021 Full Year Financial Results and other Key Metrics Highlights
- Revenue increased by 25.6% toĀ EUR ā¬58.3 million (USD $64.7 million) for 2021 compared to EUR ā¬46.4 million (USD $51.5 million) in 2020.Ā
- Wagering revenue generated by customers increased 21.1% to EUR ā¬14.3 billion (USD $15.9 billion) compared to EUR ā¬11.8billion (USD $13.1 billion) in 2020.
- The number of unique players using Bragg games via its Oryx Hub distribution platform and content increased by 11.2% to 6.5 million, from 5.9 million in 2020.
- Gross profit increased by 40.3% to EUR ā¬28.3million (USD $31.4 million) from EUR ā¬20.2million (USD $22.4 million) in 2020, reflecting a 510 basis point margin improvement to 48.6%.
- Net loss for the period was EUR ā¬7.5 million (USD $8.3 million), an improvement from the net loss of EUR ā¬14.6 million (USD $16.2 million) in 2020.
- Adjusted EBITDA was EUR ā¬7.2 million (USD $8.0 million), an increase of 29.8% compared to EUR ā¬5.5 million (USD $6.1 million) in 2020. Adjusted EBITDA margin increased by 40 basis points to 12.3%.
Full Year 2022 Revenue and Adjusted EBITDA Guidance
Bragg today reiterated its outlook for 2022 full year expected revenue ofĀ EUR ā¬68-72 million (USD $76-80 million) and Adjusted EBITDA of EUR ā¬9.5-10.5 million (USD $10.5-11.7 million).Ā The midpoints of the 2022 revenue and Adjusted EBITDA guidance ranges represent growth of 20% and 39%, respectively, over the reportedĀ full year 2021 revenue and Adjusted EBITDA.
BetVictor Canada has launched its new out-of-home advertising campaign across the streets of Toronto to promote NBA legend Tracy McGrady as its Safer Gambling Ambassador.
Two mobile digital trucks strategically targeting high-traffic areas near Scotiabank Arena, Rogers Centre, and major sporting events will provide prime audience exposure for the campaign, scheduled around Toronto Maple Leafs, Toronto Raptors, and Toronto Blue Jays home games.
To further enhance the campaignās reach, BetVictor Canada has partnered with Clear Media Group to leverage digital taxi tops across Toronto, providing city-wide exposure with 100 taxis displaying key brand messaging. These digital taxi tops will run during peak evening hours (5:00pm ā 9:00pm) on select dates until April 5th, 2025.
The campaign coincides with Problem Gambling Awareness Month, a nationwide grassroots campaign held each March that seeks to increase public awareness of problem gambling and promote prevention, treatment, and recovery services.
BetVictor Canada offers an array of tools and services to help its Canadian customers bet and play safely and responsibly, across a host of sports betting markets and online casino games.
Mark Harper, Head of Emerging Markets at BV Group, said: āBetVictor is delighted to be participating in the National Council of Problem Gambling campaign in March, to help increase public awareness of problem gambling and the need to promote prevention, treatment and recovery services.
āIn using our Safer Gambling Ambassador, Tracy McGrady, to raise awareness about BetVictor’s safer gambling tools such as loss limits, time alerts and product restrictions we are dedicated to ensuring all players have a safe gambling experience. #PGAM2025.ā
Canada
AGCO issues $110,000 in penalties to BetMGM Canada for offering cash to induce new gambling customers
The Alcohol and Gaming Commission of Ontario (AGCO) has served BetMGM Canada Inc. with an Order of Monetary Penalty (OMP) of $110,000 for violations ofĀ the Registrarās Standards for Internet Gaming.
In two separate incidents in 2024, BetMGM engaged marketing companies who offered cash to members of the public in return for opening new BetMGM accounts. The marketing activities occurred in public forums, such as a major national trade conference. Under AGCOās Standards, operators are responsible for the conduct of their third-party suppliers who are contracted to support the operator’s Ontario gaming business, and must require their third-parties to meet Ontario laws, regulations and standards (Standard 1.19).
Ontario is one of the first jurisdictions in the world to establish and enforce rules that strictly limit high-risk inducement advertising and marketing in the online gambling industry. Registered iGaming operators are prohibited from offering gambling inducements, bonuses and credits as part of their broad public advertising and marketing activities (Standard 2.05). These Standards exist to protect Ontarians from predatory advertising and promotional marketing practices in order to limit the risk of gambling-related harm.
A registered operator served with an OMP by the AGCOĀ has the right to appeal the Registrarās decision to theĀ Licence Appeal Tribunal (LAT), which is an adjudicative tribunal independent of theĀ AGCOĀ and part of Tribunals Ontario.
QUOTE
āResponsible gambling safeguards and the protection of Ontarians on registered gaming sites is among our key priorities. The AGCO monitors the activities of all registered operators and their third-party suppliers to ensure they are meeting our high standards and we continue to take strong action to ensure they operate within the public interest.ā
Dr. Karin Schnarr, Chief Executive Officer and Registrar āĀ AGCO
ADDITIONALĀ INFORMATION
BetMGM Canada Inc. failed to comply with the Registrarās Standards for Internet Gaming. Specifically, the licensee failed to comply with the following provisions of the Standards:
- 1.19 Operators are responsible for the actions of third parties with whom they contract for the provision of any aspect of the Operatorās business related to gaming in Ontario and must require the third party to conduct themselves in so far as they carry out activities on behalf of the operator as if they were bound by the same laws, regulations, and standards.
- 2.05 Advertising and marketing materials that communicate gambling inducements, bonuses and credits are prohibited, except on an operator’s gaming site and through direct advertising and marketing, after receiving active player consent.
Contrary to the Standards, BetMGM Canada Inc. and/or their affiliates allegedly engaged in the following activities:
| a) | On or about January 13 and 14, 2024, BetMGM representatives were alleged to have attended the National Franchise Show and were offering $100 in cash to new players for opening a new account and depositing $15. |
| b) | On or about March 11, 2024, BetMGM acknowledged that its marketing affiliate āAbove the Streetā had engaged in prohibited inducement marketing. The conduct resulted in 377 player sign-ups and $127,180.00 in commissions to “Above the Streetā. |
| c) | On or about April 13, 2024, another BetMGM marketing affiliate āMaple Leaf Marketingā engaged in prohibited inducements and marketing to induce on-site activations and acquire new players. The conduct resulted in 94 player sign-ups and about $34,000.00 in commissions paid to āMaple Leaf Marketingā. |
BCLCās new āWhatās played here stays hereā campaign is issuing an important reminder to British Columbians who choose to gamble ā specifically that all net profit its operations generate stays in B.C. to help fund critical services like education, health care and community programs.
The campaign also reinforces that all other gambling websites operating in B.C. are illegal and take away funds from critical community programs and services.
āAcross B.C. and Canada, weāve seen incredible groundswell around the importance of buying and supporting local, and thatās no different for British Columbians who choose gambling for their entertainment. We want our B.C. players to know they can find a world-class gambling experience in their own backyard, whether itās at one of our 33 casinos, 3,400 lottery retailers, or online at PlayNow.com, and that the proceeds from their play with BCLC make a positive impact at home in their community,ā Pat Davis, President and CEO of BCLC, said.
Along with illegal online gambling websites, BCLC also competes with Washington State and Las Vegas casinos, all of which aggressively market to B.C. residents.
āBCLC continues to raise awareness that these gambling options do not support B.C.ās economy and take away funds from vital provincial and community-based programs and services. In a time when British Columbians are standing united, we want to reinforce that playing together with BCLC helps make B.C. even better,ā Pat Davis added.
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