GiG Terminated Platform Agreement with Unnamed Media Group
Gaming Innovation Group (GiG), a Malta-based gaming technology supplier traded on the Oslo Stock Exchange, saw its shares plummet in early trading, following an announcement of the company it pulled out of a deal with a large unnamed European media group.
White-Label No Longer Supported
In a press release on April 20, 2021, GiG announced the company agreed to the termination of a platform agreement with a European media group traced back to a December 7, 2020, official announcement, and today markets reacted to the negative news by selling GiG’s stock and pushing its share price down by more than 5%.
GiG noted in the release the decision for the termination was due to the unnamed partner planning to operate via a white-label agreement instead of their own license, and the shift in the wholesale strategy of the media group made the partnership no longer viable.
“The change in strategy has led to an impasse for us to move forward together. While unfortunate to terminate this agreement, we wish them well and we continue to move forward on a multitude of our own opportunities.”
Richard Brown, CEO, GiG
Regulatory Risks and Expense
In 2019 GiG decided against any further support for the white-label model due to the regulatory risks and related expenditures associated with the model, and as of Q4 2020, the company has only 3 remaining white-label partners, but all of them expressed commitment to switch to the software-as-a-service (SaaS) model preferred by the supplier.
Sky City, a New Zealand-based casino operator is the only GiG partner remaining on a white-label contract with the supplier due to the regulatory framework in the country.
According to GiG, the decision to terminate the agreement with the European media would not affect the company’s financial forecasts and long-term targets, but it remains to be seen whether the market reaction was just a blip or a fundamental change of direction.
In February, GiG released its fourth quarter and full year 2020 financial results, posting a substantial increase in revenues across its verticals. The iGaming software service supplier generated normalized revenue of €52.2 million for the year, an increase of 19% compared to the previous 12-month period, as Q4 2020 alone saw revenue jump by 38%.
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