In the world of online gambling, cutting costs during the growth phase could make this player a star

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Growth costs money, and keeping those costs to a minimum is almost always a goal for growing businesses.

Most businesses, regardless of industry, need to make significant investments in marketing to support their expansion efforts, and different industries have their own unique costs.

Player acquisition is a significant cost in the online gaming industry. Acquiring a single user can cost up to $500 when signing up and encouraging new users to make a purchase are taken into account, according to Golden Matrix.

But the Las Vegas-based game development and licensing company Golden Matrix Group Inc.. GMGI could stand out because at its 80% subsidiary, RKings Competitions Ltd., the acquisition cost per player is just a few pounds.

Based in the UK, RKings Competitions Ltd. is an online competition company that offers monthly prizes such as real estate, luxury vehicles and cash to around 25,000 active customers in the UK and Ireland.

Online gambling and esports companies such as DraftKings Inc. DKNG are experiencing slower-than-expected growth and continued losses fueled in part by high player acquisition costs and marketing spend, said Golden Matrix CEO Brian Goodman.

Over the past six months, DraftKings shares have fallen from a high of around $60 in mid-September to current levels of under $20. Caesars Entertainment Inc. CZR fell from a high near $120 in early October to current levels below $80.

“GMGI has managed to not only keep these costs and expenses to a minimum, but also to manage overall general and administrative expenses, and to always remain focused on the bottom line,” Goodman told Benzinga. “GMGI has consistently generated positive profitability and cash flow over the years.

Move to Mexico

Earlier this month, the company announced that it had applied for a Mexican gaming license and planned to bring RKings’ platform and successful business model to Mexico once the license was approved.

“This is a logical move for the company, as it opens up exciting opportunities in the B2C (business to consumer) market in Latin America; and this begins the expansion of the RKings tournament platform into our first region outside of the UK and Ireland,” Goodman said at the time of the announcement.

The development of strong B2C and B2B (business-to-business) segments enabled the company to achieve its 14th consecutive quarter of profitability.

In the three months ended Jan. 31, Golden Matrix recorded revenue of nearly $8.9 million, which included revenue reported by the 20% minority stake in RKings not owned by Golden Matrix. Net profit for the period was nearly $350,000.

Goodman said the last quarter was the first period of financial reporting, including contributions from the B2B and B2C verticals, and Golden Matrix is ​​well positioned for a strong 2022. The company will continue to evaluate acquisition candidates. across both verticals to drive revenue growth and profitability. while containing costs, contrary to the current trend, said Goodman.

“In our case, the core business is continuing and growing, and at the same time GMGI is making smart acquisitions that are contributing to earnings,” he said.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.

Photo credit: Ben Lambert on Unsplash

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