play sports-betting and igaming activities . With the only remaining open questions being about the structure of the company post-US float , it appears almost a certainty that Catena will exit 2022 in a very different shape to how it enters it .
Will GiG sell its media division ?
The same might be said about Gaming Innovation Group ( GiG ). The big news for GiG in recent months didn ’ t come from its media division . The acquisition of the Sportnco business in December propels the company more clearly into being a sportsbook backend supplier , and adding that capability to the already existent platform side means GiG can now more clearly compete with the likes of GAN and Kambi as full-service sports betting and gaming suppliers .
Where that leaves the affiliate business is more open to question than ever . Revenues have been growing impressively in the past year . But with its major rivals growing at a faster pace due to acquisitions , it leaves the business looking relatively sub-scale at a time when size in igaming affiliate land is everything .
“ THE US IS CLEARLY THE FUTURE FOR CATENA MEDIA . IT IS WHERE THE GROWTH IS AND WHERE THE FOCUS OF ITS MAJOR CUSTOMERS LIES ”
While there is no suggestion that the business is lacking in operational investment , just by relying on organic growth it is falling behind its major competitors . For instance , in the third quarter results , mention was made of its US positioning through wsn . com and casinotopsonline . com , but this is merely a bridgehead compared with the progress being made in North America by Catena , Better Collective and now Raketech and Gambling . com Group .
The most obvious route would be to dispose of the business . There are arguably not enough synergies between the provision of sports betting and igaming platfoms and the affiliate arm . Cash that might be used to finance M & A on the affiliate side might be better deployed on the platform side . Back in 2020 , GiG shed its B2C arm as part of a strategic review that was all about “( freeing ) up resources ” in order to concentrate on its B2B business .
The harder question to answer is what GiG would do without the media services revenues and more particularly the profit that the affiliate business brings to the group . Of total EBITDA of € 5.3m in the third quarter , € 5.1m came from the affiliate business . The question previously was how the business could unhook itself from its profit centre but with the Sportnco acquisition , perhaps it has provided itself with something of an answer . It leaves the company free to look at the offers on the table for an operationally efficient and profitable affiliate business with US optionality . That is a tasty proposition for any business in the sector .
Can the US affiliate industry persuade operators about revenue share ?
To date , there has been little said by the firms making material revenues from the
Q1 2022 • ISSUE 89 • 61