VANCOUVER, BC --(Marketwired - July 04, 2016) - Contagious Gaming Inc. (TSX VENTURE: CNS)
NOT FOR DISSEMINATION IN THE US OR THROUGH US NEWSWIRE SERVICES
Contagious Gaming Inc. (TSX VENTURE: CNS) ("Contagious Gaming" or the "Company") is pleased to provide a business update on its operations which include:
- Goal Time;
- Digital Lottery; and
- Digitote (B2B Sports Betting).
"Since going public in late 2014 Contagious Gaming has continued to demonstrate its commitment to becoming a leader in real money gaming and to providing our customers with innovative, best-in-class product. We are pleased to present a business update on our expanded Goal Time offering and a move into white label sports betting, a pivot of our digital lottery business, and an update on Digitote and a note the Digitote Earn Out," commented Peter Glancy, CEO and Director.
Goal Time Update
The Company's proprietary in-play, pari-mutuel lottery style soccer game, Goal Time, went live on December 21, 2014 in partnership with Trinity Mirror Group ("TMG"), one of the largest media companies in the UK. From its launch until early December 2015, there were 3,871 registered players, of which the majority (63%) of the registered players (year-to-date) were playing through their mobile devices and the average age of the registered player is 35.
The completion of the acquisition of Digitote on December 2, 2015, provides the Company with the technical ability to offer a wider range of gaming content to its Goal Time players on a white label basis. The addition of this wider range of gaming content will turn Goal Time from a strictly "in-play" offering to a 24/7 real money gaming destination which is expected to achieve an increase in revenue per player in line with industry averages. The expanded offering (the "Expanded Goal Time Offering") includes:
- Sport and Event Betting (pre-game and in-play);
- Virtual Sports Betting;
- Casino Gaming; and,
- Instant Win Games
In order to implement the Expanded Goal Time Offering, the Company is required to achieve the following milestones:
- Integrate Goal Time into Digitote's xTurf platform (completed May 2016);
- Secure sports betting data rights and integration on all major Football leagues and other global sporting events platform (completed May 2016);
- Expand the Company's UK gambling license to include sports betting, virtual sports betting and online casino operations (announced on March 8, 2016);
- Enter into gaming content deals for virtual sports and casino games and complete integration (completed July 2015)
- Expand the number of payment providers available to accept all major payment types including Visa, Master Card and Debit (pending)
The Company has been focused on executing on the above requirements to implement the Expanded Goal Time Offering. As part of the larger initiative, the existing Goal Time operations were suspended in early December 2015, in conjunction with the closing of the Digitote acquisition. It shall be relaunched with the completion of the Expanded Goal Time Offering launch.
The Company currently owns £458,000 ($796,920) in prepaid marketing asset with TMG for the promotion and player acquisition for Goal Time. TMG is a significant global partner with an audience that includes 38.6 million weekly print subscribers within the UK and to an audience of 24.7 million online viewers. The Company expects to resume Goal Time around the start of the 2016-2017 Premier League season in August 2016 with marketing efforts to synchronize with the launch of the 24/7 expanded gaming offering.
Digital Lottery Update
Contagious Gaming remains committed to becoming a leader in the development of digital instant scratch cards. However, the roll out of its supplier contracts in the US has taken more time than the Company expected. In the state where the Company's content is currently live the lotteries have yet to roll out a full scale marketing campaign which is limiting the performance in the state.
Due to the slower than expected pace of digital lottery growth across the US the limited distribution and marketing efforts by the lotteries to date, Management's view is to diversify its Digital Lottery portfolio outside of the US and to pursue distribution networks in Canada, Europe and other regulated markets.
As part of its strategy to diversify away from the US lotteries, the Company announced on April 14, 2016, that it entered into a casino partner agreement with Openbet Limited ("Openbet") to have its content portfolio distribution to Openbet's global customer base via its software platform. This integration work required is underway and once completed will provided Contagious with a global base of potential customers for its content.
Digitote (B2B Sports Betting) Update
Digitote Limited and Digitote Software GmbH Deutschland's (together "Digitote") customers are structured on a month-to-month basis, as there are no long-term agreements in place. This risk of contract uncertainty was identified as part of the Company's due diligence when acquiring Digitote and was reflected in the structuring of the consideration paid. The Company negotiated earn out consideration in lieu of a vendor take back to account for risk in the lack of long-term contracts with Digitote's key customers at the time of closing.
The Company announced on October 19, 2015 a portion of the purchase price of Digitote Limited and Digitote Software GmbH Deutschland (together "Digitote") was to be funded by way of earn out (the "Digitote Earn Out") as opposed to the previously agreed upon vendor takeback as announced on August 10, 2015 (the "Vendor Take Back"). The Digitote Earn Out consideration is equal to 1x EBITDA (subject to certain adjustments) for each of the four years following the closing of the Acquisition up to a cumulative total of EUR2,200,000 (C$3,168,000). To-date the Company has paid to the Digitote vendors 8,008,000 shares of the Company delivered on closing.
Digibet Ltd., a key customer, and Digitote have mutually agreed to terminate substantial services as of August 31, 2016. The Company will now refocus the resources previously dedicated to Digitote on the near-term launch and support of the expanded Goal Time offering.
Moving forward, the Digitote technology is instrumental in the growth of Goal Time and at the core of the Expanded Goal Time Offering. Following the completion of the Digitote acquisition, key personnel have been focused on the integration of Goal Time and the build out of the expanded offering as well as updating the xTurf platform. Once the Expanded Goal Time Offering is operational, the focus will shift towards adding new Digitote customers on a B2B basis.
Note: GBP converted to C$ at an FX rate of 1:1.74 and EUR converted to C$ at and FX rate of 1:1.44
About Contagious Gaming
Contagious Gaming Inc. (TSX VENTURE: CNS) is a trusted software developer focused on providing dynamic gaming solutions regulated gaming operators and lotteries around the world. Contagious Gaming offers sports betting, pool betting and iGaming solutions targeted at the online retail and mobile gaming markets. Our unique offering of content and technology can be delivered as a fully integrated service across a single, modern customer platform or can be offered as standalone verticals.
For more information on Contagious Gaming please visit www.contagiousgaming.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information in this news release is considered forward-looking within the meaning of certain securities laws and is subject to important risks, uncertainties and assumptions. This forward‐looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward‐looking information. The forward-looking information in this news release describes the Company's expectations as of the date of this news release.
The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward-looking information include, among others, risks arising from general economic conditions and adverse industry events.
The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD‐LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.