Following our podcast with Mark Segal, CEO of Gaming Realms LON:GMR last year, I caught up with Mark recently to get an update on the business. Here are the key takeaways from our conversation:
Stuart Fieldhouse: What do you think have been the main drivers of growth for Gaming Realms as a company over the last couple of years?
Mark Segal: Gaming Realms has experienced a compound growth of 36% from 2019 to 2023. This is led by growth in its content licensing business – stemming from three key areas:
- International expansion – especially in the US and European regulated markets
- Onboarding new content distributors, operators and licensors
- Further penetration with existing distributors and operators driven by the launch of new games
This business is high margin and we have been able to consistently grow our revenues, EBITDA and cash flow over this period.
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Stuart Fieldhouse: Can you provide those who don’t know it with some idea of what Slingo is and how important it has been to the Gaming Realms story?
Mark Segal: Slingo is a unique and very valuable IP in the gaming market, combining both bingo and slot games. Originating almost 30 years ago in New Jersey, the product has a rich heritage in the lottery vertical, social games space and also in physical slot machines in the US. Gaming Realms acquired the IP in 2015 and introduced it and the game format to the regulated igaming market.
This unique format has allowed us to licence well known IPs such as Shark Week and Deal or No Deal, as well as best in class slot titles from the largest games studios such as Evolution, IGT, Light and Wonder. On top of this, in 2023, we licensed and launched Slingo versions of the iconic games Space Invaders and Tetris.
These brands allow us to attract more players to the Slingo portfolio. Due to its unique format and strong brand, we are able to stand out in a highly competitive market.
Stuart Fieldhouse: How do you see the ongoing gaming regulatory story in the US playing out, and how will Gaming Realms stand to benefit from that?
Mark Segal: As more US states regulate online gaming, Gaming Realms will be well-positioned to expand further into these markets. We are already collaborating with the largest operators in the US, have integrations into their technology and an audience who loves our portfolio of games. We know how to obtain licences and launch into new markets and we see the US as a big opportunity for enhanced growth.
This, however, is not our only focus. We are also exploring the opportunity to bring more unique games to our partners in all markets as well as look for new opportunities in regions such as Canada, South Africa, Greece and Portugal. Additionally, Brazil is also in the process of regulating igaming and we expect this to be a substantial new market for Gaming Realms to enter in the near future.
Stuart Fieldhouse: What do you look for in new products and IP that could succeed in the global gaming market?
Mark Segal: We are always seeking unique mechanics to add into our games, allowing us to offer something new and engaging to players. Licensing popular IP allows us to innovate within the Slingo format as well as enhance our marketing. Examples include Slingo Tetris and Slingo Space Invaders, which have successfully attracted new players.
More recently, we have been looking at other types of games in the market and have started distributing two innovative slot studios into the US market. We have very strong distribution in the US and close relationships with our partners. So, we are now seeing if we can generate more scale through different types of games.
Stuart Fieldhouse: What do you look for from a successful partner in international gaming markets?
Mark Segal: We now work with over 200 igaming sites in regulated international markets. We always partner with regulated operators and those who see the value in Slingo and our games. We see how operators can really drive traffic to their sites with Slingo, and effectively cross-sell from their other offerings, such as sports betting, with the use of Slingo.
Stuart Fieldhouse: Do you think AI technology advances could change the way this sector functions and do you have any plans afoot to capitalise on this?
Mark Segal: The integration of AI in the online gambling market and casino game studios can lead to more secure, engaging, and personalised gaming experiences, attracting a wider audience and increasing player retention. It can also streamline operations, reduce costs, and enable the development of innovative game features that keep the market competitive and exciting. The future will tell exactly how much of a game changer it will be but we are of course, like tech companies in all sectors, evaluating the advantages AI can bring.
Stuart Fieldhouse: What’s your overall forecast for growth of the online gaming market in the next five years?
Mark Segal: This very much depends on how many US states decide to regulate igaming over the next five years. If some large states open up in this period, then the growth in the US alone can be c. 400%-500%. The more mature European markets have smaller growth, but we feel our product offering can gain market share in these regions.
Additionally, new markets such as Brazil, which are on the cusp of regulation, present exciting opportunities for substantial growth.
Gaming Realms have secured the votes and been awarded AIM Market Company of the Year at this year’s Online Money Awards. Gaming Realms is also featured on our Longer-term buy and hold portfolio. Sign up for a free trial of Armchair Trader Plus+ to find out why I picked them.
