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NEW YORK, Dec. 1, 2020 /PRNewswire/ -- Even as people are getting back to work in the midst of the global public health crisis, people are still staying home more than ever. More people are working from home and fewer are going out over the weekend. This means that there is more demand than ever for an easy source of excitement from the comfort of our own homes. This is fueling the online gaming industry. Online poker has seen an unprecedented increase in first-time players of 255 percent this year, while virtual sports betting has seen a 30 percent increase. This situation has created a major growth opportunity for online gaming technology-focused companies like Bragg Gaming Group (TSXV: BRAG) (OTCPK: BRGGF), DraftKings Inc (NASDAQ: DKNG), Scientific Games Corp (NASDAQ: SGMS), and International Game Technology PLC (NYSE: IGT). Meanwhile, some of the biggest names in the traditional gaming industry, like MGM Resorts International (NYSE: MGM), are moving into online gaming as well.
Bragg Gaming Group Sees a Massive Growth Opportunity
Among the online gaming companies working to get the most out of this headwind is Bragg Gaming Group (TSXV: BRAG) (OTC: BRGGF) . Bragg is an industry-leading business-to-business-focused provider of turnkey solutions to operators of online casinos. Through its subsidiary, ORYX Gaming, the company offers an omni-channel retail, online, and mobile iGaming platform, as well as advanced casino content aggregator, sportsbook, lottery, marketing, and operational services.
Online gaming is now legal in 15 US states plus Washington DC, and six more have put legalization on the ballot for election day. The overwhelming trend in the US is towards legal online gaming, and as more states legalize, Bragg Gaming Group's potential customer base grows by leaps and bounds. In states that have legalized, more online gaming applications are coming daily.
Bragg just released its third quarter financial results on November 23. Perhaps unsurprisingly in an environment where people are spending more time at home, the company has seen an upward trajectory throughout 2020. Bragg saw 72% revenue growth year-over-year in Q3, which amounted to C$18.1 million in revenue for the quarter, and generated Adjusted EBITDA of C$2.8 million, compared to C$300,000 for the same period in 2019.
"We've made extraordinary progress in 2020 and are very pleased with the substantial revenue and EBITDA growth that we've delivered," said Bragg Interim CEO Adam Arviv. "We continue to expand globally, enhancing our content portfolio and technology offering, and securing new customers across key geographies."
In October, Bragg Gaming Group announced relationships with several partners to bring new content to the company's ORYX Gaming platform. These included games studios Arcadem, Iforium, and Peter & Sons. Bragg also signed a distribution agreement with Microgaming that will see ORYX Gaming launched in Microgaming's aggregation platform.
Online Gaming Thrives While Traditional Casinos Face Tough Times
This boom period can be seen across the online gaming industry. DraftKings Inc's (NASDAQ: DKNG) stock price skyrocketed by an incredible 66.4 percent in September, and the online gaming giant's stock is up by approximately 500 percent year to date. DraftKings' rise is in part due to the industry's momentum, along with other developments for the company such as the announcement of NBA legend Michael Jordan taking an equity interest in the company.
International Game Technology PLC (NYSE: IGT) has seen its share price rise by more than 20 percent in recent months. Adding to the company's stock price rise, International Game Technology announced a sports betting partnership with the NBA on October 14.
In contrast, Scientific Games Corp (NASDAQ: SGMS), a company that relies heavily on revenue from its physical casino machines in addition to its lottery and online gaming products, recorded a net loss of $198 million in the company's 2020 second-quarter trading update. The loss is largely attributed to casino closures for public health purposes throughout the year. In response, Scientific Games is working to strengthen the digital gaming side of the company's business.
InterActive Corp, which now owns a sizable stake in casino giant MGM Resorts International (NYSE: MGM), is reportedly pushing for MGM to further develop its presence in the online gaming market. As part of this push, in partnership with British gaming company GVC Holdings, MGM already operates online poker and sport betting on the digital gaming website BetMGM through its ROAR Digital subsidiary.
While consumers avoid bars, restaurants, and traditional casinos in the midst of a public health crisis, online gaming is becoming a hot spot for people looking for a way to blow off some steam in troubled times. For online gaming technology companies like Bragg Gaming Group, it's an unprecedented opportunity for growth that could last long after things return to normal.
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