Contagious Gaming Inc V.CNS

Alternate Symbol(s): KSMRF

Consumer Cyclical Resorts & Casinos

Contagious Gaming Inc. is a Canada-based company, which is engaged in the business of developing software solutions for regulated gaming and lottery markets. The Company’s platform manages all aspects of real-money gaming, including gaming engine, player management tools, game application interface, payment systems interface, data feed handler, affiliate management, presentation layer, and centralized e-wallet. The Company’s platform manages all aspects of real-money gaming, including gaming engine, player management tools, game application interface and others. The Company also provides Web-based and mobile content for a lottery, real money and social gaming, and Goal Time, which is an in-play parimutuel sports betting platform.

TSXV:CNS - Post by User

Contagious Gaming Inc

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Post by amphenolon May 28, 2015 5:07pm

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Post# 23775706

I got this from Beacon today, but went to my junk mail

We believe Contagious Gaming Inc. (CNS-V) has very complementary revenue lines which collectively offer very significant “blue sky” potential without the traditional burn period to get through while things ramp up. Specifically:

Goal Time
·         We view Goal Time as the “high octane” growth driver for Contagious, and we believe the company has a large degree of control over it by signing more partners, marketing etc.
·         An innovative U.K. soccer betting game with a lottery twist.
·         Players make a 1 GBP bet predicting a 5-minute window during which a team will score a goal. As it offers live in-game betting, jackpots grow throughout the game enticing more betting.
·         Great partner in the Trinity Mirror PLC (TNI-LON, not covered) which has white labelled Goal Time and made an equity investment in Contagious.  We expect more partners in Europe to sign on which will help liquidity. Contagious earns 10+% of bets placed as its revenue.
·         Recently went live in Nigeria (a huge soccer and mobile market) and Ghana through another partner.

eInstant Lotteries
·         We view eInstant Lotteries as being very well positioned to benefit from the secular trend of states rolling out digital lotteries. While revenue through this line is very lucrative (essentially 100% gross margin), it will progress at “government speed”.
·         These are the digital equivalent of scratch and win cards. Like most industries, they are going digital and especially mobile.
·         Contagious has already built 23 games. So the costs are sunk and they are done making new ones.
·         The company has great partners. Two companies, International Game Technology PLC (IGT-US, not covered) and Scientific Games Corp. (SGMS-US, not covered) which operate the majority of state lotteries. Contagious is 1 of 6 suppliers for IGT and 1 of 4 suppliers to Scientific Games.
·         Contagious earns 1% of ticket sales as revenue. As the games are built and there are no marketing costs, essentially all of this revenue flows to EBITDA.
·         Contagious went live in Georgia in December 2014 (with IGT), so we should see Q1/FY15 data soon. We expect more states to follow this trend (Kentucky is choosing its games from IGT currently).
·         A recent data point from another state which recently went live suggests there could be significant upside to our forecasts for revenue from Georgia.

Software Development
·         Cash flow today to fund the growth in the other lines.
·         Contagious outsources some of its team of software developers to companies such as Zynga Inc. (ZNGA-US, not covered).

Digitote
·         Recent acquisition which resulted in our EBITDA forecasts for this year swinging from negative to positive.
·         Offers an end to end sports betting platform. We see synergies and cross-selling opportunities with Goal Time.
·         Highlights the ability of Contagious’ leadership to source quality acquisitions at very attractive prices and terms.