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Bragg Gaming Group: DEEP DIVE

Bragg Gaming moves chips to wager on US and sports betting

Bragg’s GiveMeSport has a bigger following on Facebook than ESPN and Sky Sport
gambling chips
OVERVIEW: BRAG The Big Picture
The US Supreme Court last year struck down a 1992 law banning commercial sports betting
  • The mainstay of Bragg’s business is Oryx, its online casino technology arm, which provides the game platform casino operators rely on.
  • Bragg’s sports-focused site GiveMeSport has a bigger following on Facebook than ESPN and Sky Sports, with over 26 million Facebook fans.
  • CEO Dominic Mansour dislikes the term veteran, but he has nearly 20 years of experience in the gaming and lottery industry, most recently being seen at the poker tables of Rational Group’s Full Tilt where he was managing director.
  • The ruling last year by the US Supreme Court to strike down a 1992 law banning commercial sports betting  presents a big business opportunity in the US for Bragg as it cracks the door open for states to legalize and regulate wagering on sports

What Bragg Gaming does

Bragg Gaming Group (TSXV:BRAG) is a reincarnation of a gambling company called Breaking Data and debuted on the TSX Venture Exchange under the current name Bragg in December 2018.

It has three core businesses: Oryx, an online casino technology group; GiveMeSport, a sports-focused media company and Facebook’s (NASDAQ:FB) largest sports publisher with more than 26 million fans; as well as GiveMeBet, a new online sports betting brand and casino site that aims to draw viewers from GiveMeSport.

CEO Dominic Mansour says that while 80% of its revenue still comes from Europe, he and his team are eager to expand to the US where last year the Supreme Court struck down a 1992 law that banned commercial sports betting.  The ruling by the country’s highest court cracks the door open for US states to legalize and regulate wagering on sports, which presents a business opportunity. And yearly gross gambling revenue in the US is expected to hit a range of US$3.1 billion to $5.2 billion by 2023, according to analysts.

“The US is definitely going in the right direction,” says Mansour.

The folks at the company’s top would also like to pursue a shrewd acquisition strategy that brings on board businesses that align well with its existing ones such as sports betting and casino sites.

“What we want to do is buy businesses that fit into our overall portfolio so that we can leverage them off one another really neatly,” adds Monsour.

Currently, the life-blood of Bragg’s operations is Oryx, which provides online casino operators with the technology they need to run their games. The cornerstone of the Oryx business is its casino aggregator platform, which offers casinos access to a portfolio of over 5,000 game titles using one shared account.

Boasting clients ranging from Jackpotjoy PLC to GVC Holdings, which owns Ladbrokes Coral Group PLC, Oryx is licensed to provide its services in Malta, Spain, Romania, Colombia, Croatia, Serbia, Gibraltar, the UK and Slovenia.

Oryx also offers consulting services and assists clients with hosting and security as well as payments and transactions as well as risk and fraud management.

How is it doing?

It’s too early to see a full picture of Bragg’s finances as the company hasn’t posted earnings under its name yet.  When its results are released, Mansour forecasts that a few eyebrows will be raised about how different Bragg is to the old Breaking Data business.

If pro-forma historical financials are any guide, the company’s sales figures will look promising. In the six months until June of 2018, Oryx’s revenue jumped to US$9.5 million from $1.85 million over the same period in 2017. The Breaking Data business, which then included an unprofitable AI (artificial intelligence) division, meanwhile, generated revenue of $5.32 million in the six months until June of 2018, up from $2.6 million over the corresponding time in 2017.

The vision of Bragg Gaming is to shift away from Breaking Data’s focus on tech and AI to gaming and media.

The GiveMeSport site is being repositioned to make sure it grows its audience with an interest in the different gaming sectors – starting with sports betting.

“GiveMeSport has a bigger following on Facebook than ESPN and Sky Sports,” says Mansour. “We plan to use this as a platform to grow into sports betting, initially in the UK, and further into the US.”

Also on the agenda is refashioning GiveMeBet, its online sport betting and casino arm, which will be formed in the mold of Sky Betting and Gaming.

“What we have is a captive audience as well as some fantastic expertise in the management team. Connect those two dots together and you have the opportunity to build a really fantastic business,” says Mansour.

Similar to the informal tie-up between GiveMeSport and GiveMeBet, Sky Bet attracted much of its audience from Sky Sports, Rupert Murdoch’s sports channel. The business was eventually sold to the Stars Group, parent of PokerStars, in a cash and stock transaction valued at US$4.7 billion.

What the boss says

“You cannot even consider success in our sector unless you have an intimate and deep knowledge of the regulatory framework around the world. It moves really really fast. It’s accelerating at the moment. We like regulation because with regulation comes stability,” says Mansour. “It does mean we have to write a check to the taxman in whatever jurisdiction. But it gives you structure and investors like structure. It reduces the risk profile of these businesses. Those are all positive things for us.”

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