Shares of Esports Technologies (NASDAQ:EBET) are getting a lift after the company said it procured access to a UK gaming permit, a move COO Bart Barden calls a “massive strategic milestone.”
The provider of esports wagering platforms and related technologies is higher by almost three percent after trading higher by more than five percent earlier in Tuesday’s session. That temporarily stops some bleeding as the stock tumbled 17.1 percent over the past week. Esports Technologies notes the UK license comes by way of its $75.9 million cash and stock acquisition of Aspire Global’s business-to-consumer (B2C) unit announced in October.
Through the deal, Esports Technologies gained 1.25 million deposited customers, the majority of them from UK-focused online sportsbook and casino brands Karamba, Hopa, and Griffon Casino,” according to a statement issued by the company.
The Las Vegas-based operator of an online gaming platform is also acquiring the BetTarget, Dansk777, and GenerationVIP brands in the transaction.
Significant Move for Esports Technologies
Gain access to the UK, which is one of the most mature gaming markets in the world, is a coup for Esports Technologies – an upstart that went public earlier this year.
Among publicly traded gaming companies, those with internet casino and sports betting exposure are getting most of the attention. But that could change as more domestic jurisdictions approve esports wagering. For the 12 months ending September, the brands Esports Technologies is acquiring recorded a combined handle of $1.83 billion and cash deposits of $183 million.
“The UK offers one of the world’s largest gaming markets. According to the UK Gambling Commission, Great Britain’s gaming revenue from April 2019 to March 2020 was approximately $19.2 billion. Online gaming has become the largest sector, accounting for roughly 40% of that total revenue,” according to the company.
Entering the UK also adds geographic diversification to Esports Technologies’ revenue stream. Currently, the company’s gogawi.com sports wagering platform does the bulk of its business in Asia and Latin America. Esports Technologies accepts wagers on esports as well as traditional professional sports.
Aspire Deal Could Be Long-Term Positive
In addition to landing the coveted UK market access, the Aspire Global transaction could pay dividends for Esports Technologies in other ways.
For the 12 months ending June 30, Aspire’s B2C arm generated $73.9 million in sales was profitable, posting earnings before interest, taxes, depreciation and amortization (EBITDA) of $8.2 million. Wagering volume was $1.8 billion on that platform over that time.
Shares of Esports Technologies are down 34.13 percent year-to-date.
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