Pulse
CONSOLIDATIONS AND MERGERS BRAGG GAMING & SPIN GAMES
Te other piece of the puzzle. which Richard highlighted, is the player engagement module within the Oryx RGS. Te ability to offer player engagement tools hits a sweet spot in the market right now that’s currently lacking. Bonusing has only just begun to be offered in the US and combining this technology with all this additional content is a huge plus.
I think the culture of Bragg is also a perfect fit with Spin. Both teams are innovative and entrepreneurial. I think the experience of the management teams, in which we have hundreds of years of experience across European iGaming and North America, delivers synergies between the two that make a lot of sense.
Richard, what are the opportunities for Bragg in this sector and why was Spin Games the right fit?
Given my experience and the lessons learned from SBTech’s entry into the US, the difficulty is not getting licensed in North America, the difficulty is getting onto operator roadmaps. Contract sign-ups with all the operators takes an inordinate amount of time and as a company, Bragg has limited experience of the US market. Having little knowledge of compliance or operations is a lesson we learned the hard way at SBTech.
It’s very difficult for European companies to enter the market with an in-house team. You must have local compliance and regulatory knowledge to make a mark in North America. Firstly, the addition of Spin, de-risks our market entry. Kent and his team have a very well- established operational footprint in North America. Secondly, it accelerates our entry into the US market. An organic entry would have delayed us by a minimum of 12 months and maybe longer. And we haven’t got 12 months.
Finally, from a strategic and financial perspective, the deal makes a lot of sense. Te cultures are very similar and we share the same vision. Both companies are going on the same journey. Kent’s business is pivoting towards owning and creating its own content, and we are doing a similar strategic pivot. Historically, Bragg has taken third-party content and distributed it through our RGS and aggregation business. Over the last six months, since I joined
the business, we have focused upon building our own content. We have just recently launched our first game across the network, which is performing ahead of expectations, and we have a further four to five games planned for release this year. In addition to the shared synergies, as we witness more and more M&A in this sector, joining forces to give us greater scale is beneficial.
It feels like there's a big window of opportunity in the US right now - but is that window opening or shrinking? Richard, do you have a limited period of time to make your mark?
I would argue that the window isn’t shrinking. Tis time last year, New Jersey was enjoying significant month-on-month increases, but many thought that the US wasn’t particularly interesting, as it was still a relatively small market. Today, Michigan, New Jersey and Pennsylvania have a run-rate of close to US$4bn with talks ongoing in Illinois and multiple other states. Te opportunity isn’t shrinking, it is expanding.
Te pressing issue is that we want to establish ourselves in this market and each month that goes-by we’re letting competitors build a more dominant relationship with the market. If we were to wait a year it becomes much more difficult to maximise the opportunities we have available to us right now. Te deal with Spin Games means we have immediate access to the whole market and we’re in a very strong position should more markets open in the future. We have the relationships in place and can hit the ground running.
Kent - all of the factors seem positive in the US right now, so why not go to investors and take Spin Games on that journey, as opposed to selling to Bragg?
We did consider that as an option, but the way we looked at it, Bragg’s business and positioning offered Spin a lot of upside in a combined business. Being a majority owner in the business, we weighed up the investor route and the wrinkles that brings in terms of operating the business, as opposed to our options with Bragg, in which we think there’s significant upside in the medium term. Bragg is looking at a NASDAQ listing too, and from a selfish and
You must have local compliance and regulatory knowledge to make a mark in North America. Firstly, the addition of Spin, de-risks our market entry. Kent and his team have a very well-established operational footprint in North America. Secondly, it accelerates our entry into the US market. An organic entry would have delayed us by a minimum of 12 months and maybe longer. And we haven’t got 12 months.
P72 WIRE / PULSE / INSIGHT / REPORTS
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