iGB North America magazine IGBNA Aug/Sep | Page 57

Business and Finance

this much in such a short period of time.
Over the past several months, SciGames
has steadily gained 68% since its it hit its
2015 low, as recently as March. According
to analyst Darspal Mann in Seeking Alpha,
it’s now a good time to be taking stock in
the company now that merger is over and
the roadmap is clear, citing the company’s
clearly defined leadership position as one
of the main reasons for being bullish on the
stock. He also points to “pockets of organic
growth, strong replacement market, new
products and aggressive cost-cutting [that]
promise revenue and cash flow stability” as
additional reasons to invest, as well as the
increased clarity on the pace and scale of the
deleveraging of the company, which has been
a significant overhang on the company’s
share price.
Caesars Acquisition Company
(-11.5%) continues to hover around its
all-time low, as noise from its parent,
Caesars Entertainment Corporation, acts
as an overhang on the company. While
its social business continues to pull away
from its closest competitors, real-money
in the US continues to challenge. In June,
the company was slapped with a further
violation for allowing self-excluded players
to wager online in New Jersey. The New
Jersey DGE seemed lenient in its treatment,
only penalizing the company with a
$15,000 fine, and given this is Caesars’
third violation of this nature within a
year, it seems the fines are not acting as
sufficient deterrent. To the positive, Caesars
Interactive announced a partnership
with NetEnt for additional new content
for its New Jersey online gaming site.
This content is much needed, as Caesars
(operating under the Harrah’s brand) and its
supplier 888 have yet to add any non-888
proprietary games since the launch of the
market in November 2013.
Continuing their aggressive acquisition
spree, Canadian-based Intertain (+1.4%)
signed a licensing deal to secure the rights

for Parlay Games’ online bingo software
source code, alongside the Bingo.ca domain
name, for CA$2.8m in cash. The acquisition
of the bingo software is directly in line
with Intertain’s strategy of focusing on
the female demographic, as outlined in
March by group CEO John Fitzgerald at
the Morgan Stanley and iGaming Business
investor conference in New York. Yet the
acquisition of the Parlay code also seemed a
rather surprising departure from the radical
approach, also outlined during the same
presentation, of specifically not owning
any technology.
XL Media (-15.2%) was unable to garner
investor confidence despite continuing
to expand its performance marketing
presence, this time with the acquisition of
Marmar Media.
NYX Gaming Group (-5.6%) lost some
value after announcing a doubling of net
losses, although the company continues to
actively seek new content distribution with
numerous partners.
Mr. Green (-11.8%) was unable to
garner investor support after announcing
a sharp drop in profit for Q1 2015 over
the comparable quarter for 2014. The
company announced pre-tax income of
SEK4.9m in the most recent quarter, down
from SEK25m in 2014. According to the
company’s new CEO, Per Norman, the drop
was attributable to increasing marketing
costs, as well as a significant investment
into Italy, coupled with a delay to the Italian
launch. With a 26% increase in revenue for
the period, the question for investors will be
is this a one-off event, or recurring.
GameAccount Network’s (+17.8%)
share price remains on quite the roller
coaster. Just ahead of the start of the midApril period, GAN announced a £2.6m
loss, which caused the share price to
drop sharply by 16% in just one day. The
following week, just after the start of the
most recent Index period, GAN’s chairman
David O’Reilly boldly stepped in and bought

100,000 shares at 38p each. While the
number of new shares was a rounding error
compared to the existing 2.16m he already
possessed, it was a certain positive signal
to the market. Had he not stepped in, the
consequences could have been devastating,
given the widening losses reported on the
same day.

LOOKING FORWARD
M&A