Elys Game Technology revenue up 22% in 2021
Expenses increased as company entered US market.
Elys Game Technology, an interactive gaming and sports betting technology company, on Monday said it expects revenue for the fiscal year ending December 31, 2021, to be approximately $45.5m, subject to final audit verification.
The management team said revenue increased by approximately 22% compared to approximately $37.3m for the fiscal year ending December 31, 2020.
In addition, officials expect web-based gross gaming revenue to increase by approximately 74% to approximately $54.9m for the fiscal year ended December 31, 2021, subject to final audit verification, compared to approximately $31.6m for fiscal year 2020.
According to a statement by the company, its recent entry into the US B2B market has had a “very positive effect” on its service-related business. Although still relatively small, Elys’ revenue in this segment have grown to approximately $1m for fiscal year 2021, an improvement of approximately 627%, subject to final audit verification.
The company noted its operating expenses before impairment charges for 2021, including selling and general and administrative expenses, are anticipated to increase year over year.
Selling expenses, primarily commissions paid to third-party agents on B2C operations in Europe and calculated as a percentage of turnover, were approximately $36.3m, an increase of approximately 39% compared to approximately $26.1m in 2020, due to a 47% increase in turnover.
General and administrative expenses increased by approximately $5.3m, or 39%, from approximately $13.8m in 2020 to approximately $19.1m in 2021. The increase is a “direct result” of the company’s entry into the US market, including increased expenses related to the acquisition and operation of Bookmakers Company US, and “significant” expenses incurred in both personnel costs and professional fees to develop and establish a foothold in the US market.
Significant business developments during 2021 included the first Class B Operator license issued in the country, Elys’ first small business customer, Grand Central, in Washington DC, and build-out for the recent addition of Ocean Resort Casino as its first major resort casino customer.
“We expect to continue incurring expenses related to our expansion investment in the US market,” officials said Monday.
Impairment charges for 2021, which are non-cash, are estimated to be $16m, subject to verification.
“We are very pleased with the growth of our European operations demonstrating the value of early investments we made to develop our Newgioco brand in the Italian market and the streamlining of operations under the Multigioco subsidiary, thereby eliminating the duplication of license management,” Michele Ciavarella, Executive Chairman of Elys, said in a statement.
Ciavarella added Multigioco benefited from the completion of Elys’ Ulisse operations, which were organized in the EU while operating in Italy. As reported in mid-2021, the company phased out the Ulisse operations due to the impact of Covid restrictions on land-based distribution, resulting in a non-cash impairment of $4.8m.
“We expect to win further B2C margin improvement by streamlining Multigioco operations as we grow our omni-channel distribution strategy and establish plans to roll out the land-based channel of our Elys Gameboard technology on a B2B basis in Europe,” Ciavarella said.
“We also began to realize our initial investment in our US-facing sports betting technology with the launch of our first US operation in October 2021 at the Grand Central Restaurant and Sportsbook in Washington, DC,” Ciavarella explained. “We believe we are extremely well positioned to convert investment in technology into revenue-generating customer relationships in the US and Canada heading into 2022. We anticipate meaningful near-term milestones and look forward to providing updates on these developments as they unfold.”
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