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Elys Game Technology reports growth in licensed Italian facing B2C market6 April 2023(PRESS RELEASE) -- Elys Game Technology, Corp., an interactive gaming and sports betting technology company, reported that growth continued in its licensed Italian facing B2C market as its Euro based turnover increased by 2.7% for the fiscal year ended 31 December 2022, to €730.5 million from €711.4 million for the fiscal year ended 31 December 2021. The average U.S. Dollar exchange rate strengthened by over 10% from $1.1834 in 2021 to an average rate of $1.0543 in 2022, which resulted in the Company reporting a net decrease in reported turnover of $71.7 million from $841.9 million to $770.2 million, a net currency impact of approximately $94.2 million. Management expects Gross Gaming revenues (“GGR”) from Euro based operations to increase by approximately 3.7% to approximately €50.1 million from €48.3 million for the fiscal year ended 31 December 2022 and 2021, respectively, subject to final audit verification. The strengthening of the U.S. Dollar against the Euro resulted in the Company reporting GGR of $52.9 million a decrease of $4.3 million compared to $57.2 million in the prior year report, a net adverse foreign currency swing of approximately $6.4 million, subject to final audit verification. The streamlining of our European operations towards our Multigioco subsidiary resulted in gaming taxes increasing by €1.4 million or 13.1% to €12.1 million from €10.7 million for the years ended December 31, 2022 and 2021, respectively, which fell in line with our expectations after shutting down our Ulisse operations in the prior year. Multigioco activated 53 acquired location rights during the second half of 2022 and expects to activate the remaining 47 locations over the first half of 2023, that we expect will continue to positively impact operating results over the next 12 – 18 months. Gaming taxes as a percentage of revenue increased from 22.1% to 24.2%. The strengthening of the U.S. Dollar against the Euro resulted in reported gaming taxes of $12.8 million compared to $12.7 million for the years ended December 31, 2022 and 2021, respectively, subject to final audit verification. Our go-to-market strategy for our first full year of U.S. facing operations reflected remarkable service-based revenue growth of 150.2% or $1.6 million to $2.6 million, subject to final audit verification. During the fiscal year ended 31 December 2022, the company continued to invest in U.S. expansion through technology and licensing strategies, and as a result we expect to launch our U.S. ready mobile solution in multiple states and Canada in the near future. The company took prompt action to address disappointing cost control performance in the recently acquired US Bookmaking (“USB”) division which led to a dispute and legal proceedings with the former management of USB. The swift decisions of Company management led to immediate improvements in Q4-2022 and put the group back onto to the pathway-to-profitability that we mandated in Q1-2022. These actions are expected to provide year-over-year comparisons beginning in Q1-23. Salient points about operating expenses, before impairment charges, which includes selling and general and administrative expenses are anticipated to be as follows: Selling expenses, which consists primarily of commissions paid to third party agents on our B2C operations in Europe and calculated as a percentage of turnover reported in U.S. dollars, of approximately $32.7 million decreased by approximately 9.9% for the fiscal year ended 31 December 2022, compared to approximately $36.3 million in the prior year. Selling expenses were primarily Euro denominated and also affected by the strengthening of the exchange rate over the prior year, increased by €0.1 million from €30.7 million to €30.8 million, or 0.3%, based on an increase in Euro based turnover of 2.7%, in line with our strategy to reduce operating expenses. General and administrative expenses reported in U.S. dollars, and are aggregated group-wide, increased by approximately $2.5 million or 14.3% from approximately $17.5 million in 2021 to approximately $20.0 million in 2022, subject to final audit verification. The increase fell in line with our 2022 roadmap expectations and is primarily related to an increase in non-cash stock-based compensation expense of $2.3 million, and a one-time severance cost of $1.2 million, offset by a reduction in platform related fees linked to the closure of our Ulisse operations in the prior year. Impairment charges, which are non-cash, are preliminarily estimated to be $20.6 million for 2022, subject to final audit verification. The impairment charges are related to our US Bookmaking operation’s goodwill of $14.5 million and an additional impairment charge of $6.1 million related to non-compete agreements and customer relationships, this is offset by the reduction of the remaining contingent purchase consideration due to the selling shareholders of $12.9 million. In the prior year we had impaired goodwill relating to US Bookmaking of approximately $12.5 million, offset by a reduction in contingent purchase consideration of $11.9 million, and an impairment of Ulisse licenses of approximately $4.8 million. We are currently in dispute with the selling shareholders of US Bookmaking and are pursuing legal remedies against them.
Elys Game Technology reports growth in licensed Italian facing B2C market
is republished from iGamingNews.com.
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