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Inspired Reports Third Quarter 2023 Results

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Inspired Entertainment, a leading B2B provider of gaming content, technology, hardware and services, reported financial results for the three-month period ended September 30, 2023.

Lorne Weil, Executive Chairman of Inspired, said: “We have completed the financial restatement process and as of today, all amended filings are complete. For the first half of 2023, the net impact to Adjusted EBITDA from the restatement was effectively zero, with a $1 million decrease in previously reported results in Q1 offset by a $1 million increase in Q2. The impact to our Adjusted EBITDA for the full year 2022, was a decrease of $0.6 million, from $99.6 million to $99.0 million, or less than 1%. Adjusted EBITDA margin for the third quarter was 27%, but excluding Low Margin Gaming Hardware sales, the margin was 36%, compared to 37% in the prior year quarter.”

Weil continued: “For the quarter, our aggregate digital business, which includes our Virtual Sports and Interactive segments, grew Adjusted EBITDA 9% to $16.4 million from $15.0 million. Year to date, our digital business generated 58% of Adjusted EBITDA contribution compared to 50% in the prior year period. This performance reinforces the shift in our strategic focus towards our higher margin, scalable digital business and we continue to invest in premium content creation for these segments. At the same time, our Adjusted EBITDA for the third quarter was impacted by the timing of several one-time sales moving into the fourth quarter. Excluding one-time product sales, Adjusted EBITDA grew 4% year-over-year during the third quarter. As we look forward, we expect our fourth quarter Adjusted EBITDA to be in-line with consensus. Additionally, our fourth quarter Adjusted EBITDA would have been nearly $2 million higher if not for the ransomware attack on our IT systems impacting results.”

Weil added: “Our digital business third quarter results were led by the Interactive segment where revenue and Adjusted EBITDA increased 28% and 55% year-over-year on a constant currency basis, respectively, underscoring both the growth and scalability of the business. Interactive results reflect another quarterly record as we continue to benefit from an increased footprint through new customer launches, the consistent deployment of new content and increased promotional activity through exclusive deals with tier-one customers as well as revenue growth from existing customers. In our Virtual Sports segment, we generated $13.4 million of revenue during the quarter compared to $14.4 million during the prior year. The year-over-year decline was driven by a major customer’s optimizing of their customer base, with a partial offset due to increased retail revenue. In the last two to three years, we’ve seen extraordinary growth in our Virtual Sports business, driven by new products and market expansions. We believe we are heading into another strong growth phase, driven by our exciting new content partnerships with the NFL and NBA. We have two major markets with substantial growth opportunity, North America and Latin America. In addition, we’ve recently launched Hybrid Dealer, a revolutionary new iGaming product. We are proud to have partnered with BetMGM to launch this innovative new product. With all of this recent progress, we are more convinced than ever that we are in the early stages of an expanding global opportunity with our digital business that will continue to exhibit a high margin and low capital intensity profile.”

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Weil continued: “In our land-based operations, which includes our Gaming and Leisure segments, we’ve completed the deployment of our new ‘Vantage’ cabinet across two of our largest licensed betting shop customers, recording another $22.7 million of low margin terminal sales in Q3. We continue to see approximately 11% year-over-year revenue per machine increases with these new terminal deployments. In our pubs business, we’ve deployed ‘Vantage’ across approximately 20% of our customer estate and have experienced approximately 20% year-over-year growth in revenue per machine. This gives us confidence that we are seeing a reacceleration across our land-based businesses.”

Weil concluded: “Fundamentally, our business remains very strong, which was reflected in our repurchase of $1.5 million of our stock during the third quarter. We are optimistic about the compelling digital growth dynamics of the business, as a wider audience engages with online betting and gaming while new jurisdictions continue to launch. Combined with a resilient land-based business, our diversification and expansion ability reinforce our omni-channel strategy combining our high-margin, capital efficient digital businesses with our steady land-based businesses.”

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SharpLink Gaming Announces Strategic Alternatives Process

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SharpLink Gaming, Inc. (Nasdaq: SBET) (“SharpLink” or the “Company”), an online performance-based marketing company serving the U.S. sports betting and iGaming industries, today announced that its Board of Directors (“Board”) has initiated a formal review process to evaluate strategic alternatives for the Company. The Board and management team are taking a measured approach to considering multiple proposals that have been received by the Company and other proposals it expects to receive.

SharpLink has been exploring strategic alternatives that include, but are not limited to, a sale, merger, strategic business combination or other transaction. SharpLink has not set a deadline or definitive timetable for completion of the strategic alternatives review process and there can be no assurance that this process will result in the Company pursuing a transaction or any other strategic outcome.

Rob Phythian, Chairman and CEO of SharpLink, stated “With the strategic sale of our fantasy sports and sports games development businesses in January 2024 to RSports Interactive for $22.5 million in cash and the elimination of all of our interest-bearing debt, coupled with the subsequent redomestication of our Company from Israel to Delaware and the appointment of a new Board comprised of truly world class business executives, SharpLink has transformed into a pure-play, Nasdaq-listed affiliate marketing company with a strong, clean balance sheet. As part of the Board’s efforts to evaluate strategic alternatives, it is advancing discussions with those prospects that we believe offer SharpLink the best opportunities to optimize our existing business operations, drive growth and create and maximize value for our shareholders.”

SharpLink does not intend to make any further public comment regarding the review of strategic alternatives until a definitive agreement has been executed or the Company determines that disclosure is required by law or otherwise deemed appropriate.

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SCCG Appoints Alan Peters as Client Success Manager

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SCCG Management, the leading global advisory firm in the gaming industry, has appointed Alan Peters as its new Client Success Manager. Alan joins the SCCG team at their headquarters in Las Vegas, bringing a wealth of experience in Account Management and Logistics. In his new role, Alan will be instrumental in prospecting and expanding our database while supporting the team and our 120+ client partners with various gaming initiatives and projects.

Alan’s extensive background in managing complex accounts and logistics will be particularly valuable as SCCG embarks on its ambitious tribal roadshow. This initiative involves visiting up to 100 tribal casinos over the next 6-8 months, requiring meticulous planning and execution to ensure success.

Alan Peters said: “I am incredibly grateful for the opportunity to join SCCG Management. I look forward to leveraging my experience in account management and logistics to contribute to the growth and success of our client partners. The upcoming tribal roadshow is an exciting challenge, and I am eager to support the team in making it a success.”

Stephen A. Crystal, Founder and CEO of SCCG Management, said: “We are thrilled to have Alan Peters join our team. His ambition and drive will be a significant asset as we continue to expand our services and support our clients’ growth in the gaming industry.”

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PayKings Introduces Premier High-Risk Merchant Processing Solutions for Seamless Approval

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PayKings, a payment processing service, has introduced products aimed at businesses needing assistance to obtain standard merchant accounts. The company’s new solutions target enterprises in industries that many financial institutions consider high risk.

Established in 2011, PayKings has since expanded its sales in the merchant processing sector and proudly earned a place on the Inc. 5000 list. The company’s team boasts over 50 years of experience in payment solutions, specializing in assisting businesses that might face challenges in obtaining credit card processing services.

“We’ve seen how many legitimate businesses struggle to find reliable payment processing. Our expanded services are a direct response to the gaps we’ve observed in the market,” said Kyle Hall, Chief Executive Officer at PayKings.

A high risk merchant account is generally required for businesses engaged in industries such as online gambling, dietary supplements, vitamins, subscription businesses, and travel-related industries. These sectors often face challenges when obtaining credit card processing functionality due to elevated chargeback risk or compliance concerns.

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PayKings’ new products include organic underwriting strategies tailored to the specific needs of high-risk businesses. The company has also developed advanced fraud identification measures and chargeback prevention methods to deliver better results for clients.

“Every business deserves a fair shot at growth. We’re not here to judge industries. Our job is to facilitate secure, efficient payment processing for legitimate businesses, regardless of their risk classification,” Hall added.

The application process for PayKings’ high risk merchant account involves a detailed review of each business. While this process is thorough, the company aims to make it as straightforward and seamless as possible for applicants who often see same or next day approvals.

Connor Haynes, owner of an online vape shop, said: “I was really impressed with how quick and easy it was to get started with PayKings. The approval process was straightforward, and their support team was very helpful in answering all my questions. Now, I can focus on growing my business without worrying about payment processing issues.”

PayKings emphasises its commitment to compliance with all relevant regulations in the payment processing industry. The company maintains relationships with multiple banking partners, allowing it to offer diverse solutions for different business needs.

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In addition to its core services, PayKings has expanded its educational resources. The company’s website now features a series of articles and guides about high risk merchant accounts, credit card processing, and the broader landscape of payment solutions for challenging industries.

“We would like our clients to take charge and be more in control. People who created these industries have insights that make it invaluable to them to know the nuances of payment processing, particularly in such a risky business,” said Kara Hall, PayKings’ Vice President of Operations.

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