On Wednesday of this past week we launched coverage on
Contagious Gaming (CNS:TSXV), our new client and Featured Company.
Click here to read Part I of our coverage.
Briefly recapping Part I, Contagious operates within the emerging online lottery and gaming sector. The company has signed gaming operation and content supplier deals on a revenue sharing basis with major gambling and lottery providers GTECH and Scientific Games (explained in detail in
Part I).
While that aspect of the company's business is centred on the creation of proprietary digital instant lottery content, primarily for distribution in the United States, its other focus is on the deployment of its first-to-market lottery-style sports betting platform, known as
'Goal Time', in the United Kingdom.
Contagious' proprietary platform gives the Company exposure to the significant sports betting market. Darren Small, director of integrity at betting and sports data analysts Sportradar, told the
BBCthat,
"The current estimations, which include both the illegal markets and the legal markets, suggest the sports match-betting industry is worth anywhere between $700bn and $1tn (£435bn to £625bn) a year."
source:
https://www.bbc.com/sport/0/football/24354124
As discussed in a previous Weekly Volume, being the most mature online gaming market in the world, Contagious' first deployment of its sports betting platform is focused in Europe. The Company is aiming to capitalize on Europe's love for soccer, specifically in the United Kingdom which is the birthplace of the sport, and its affinity for sports betting with the launch of its new online betting platform and mobile app.
Contagious' sports betting platform has been branded
'Goal Time'. The product has been developed to allow players to place lottery-style bets during live soccer games.
Goal Time is the first live sports betting platform of its kind and has the potential to revolutionize how players make wagers and interact with online mobile games.
Its beta launch ran in January of this year, and its official launch with Trinity Mirror is anticipated to be December 21st - seven days from now.
Peter Glancy, CEO of Contagious Gaming, stated in a
December 1st press release that,
"The official launch of Goal Time with Trinity Mirror is a significant milestone for the Company, being the first commercial roll-out of our live in play pari-mutuel sports betting platform."
*Soccer is the most watched and played sport in the world, and among the most popular to gamble on.
How Goal Time Works
Goal Time is the first sports betting platform that allows a player to continue to place wagers and chase a growing pooled jackpot throughout a live soccer match.
Most sports bets are focused around the outcome of the game, but
Goal Time increases the excitement by providing a player with the ability to place multiple bets on which team will score in 5 minute windows of time. With each soccer game lasting approximately 100 minutes (including extra time),
Goal Time allows players to bet on 40 separate 5 minute segments.
The game provides players the chance to bet on which team might score in one of 40 separate 5 minute time slots/segments (each team has twenty 5 minute segments). If selected correctly, the player wins an equal share of their respective pooled jackpot. Each wager placed in a 5 minute time slot is divided into a range of pools, 1 Goal Jackpot through to a 4 Goal Jackpot. Unlike various sports betting systems and lotteries that force players to have all their bets placed prior to the game starting, Contagious'
Goal Timehas been designed to:
1. Allow players to bet multiple times throughout the soccer game; but at the same time,
2. Continue to chase growing pooled jackpots.
The minimum bet is one GBP (British Pound), equal to roughly US$1.60. A percentage of total bets collected are added to a pot that builds throughout the game. This is similar to progressive jackpots for slot machines that you would see in a casino. The pooled jackpots grow as people play the time slots and continue to do so until there is a winner. Contagious Gaming's rake equals 10.4% of total ticket sales under its current deal in the UK.
image source:
https://www.contagiousgaming.com/wp-content/uploads/2014/09/Contagious-Ga...
The Backbone of Goal Time
*
Goal Time is licensed and regulated by the UK Gambling Commission.
*
Goal Time is pari-mutuel, which means player's bets are pooled together in a shared jackpot providing a lottery-style pay-out.
Goal Time successfully crosses in-play sports betting into the lottery arena.
*
Goal Time is delivered online via desktop, mobile and tablet devices. The Company has completed significant development of its in-house developed dedicated mobile app which is expected to be ready for its official launch.
* Contagious has signed an official live-data supply agreement with Satellite Information Services Limited ("SIS") as its exclusive in-play soccer lottery platform partner.
Contagious has signed a partnership deal to provide and operate a white label version of
Goal Time with Trinity Mirror (LSE:TNI). This partnership provides exposure and increased visibility through one of the UK's largest multimedia publishers.
Goal Time's official launch and subsequent marketing program with one of the UK's most widely viewed digital and print media enterprises, Trinity Mirror, is expected to kick off later this month. This is a major reason for the timing of our Contagious Gaming coverage initiation.
In a
recent press release from Contagious, Trinity Mirror's Director of New Businesses, Matt Colebourne, stated that,
"It's fantastic to see Contagious Sports, a company that we backed as an early startup in the UK, now a public company with what we believe to be huge potential."
First betting match: Liverpool F.C. vs Arsenal F.C. at 4pm GMT on December 21st.
Click here to read more about the Goal Time official launch.
Background on Trinity Mirror and Relationship with Contagious
Trinity Mirror is also a strategic shareholder of Contagious Gaming. It was announced on September 26th that Trinity Mirror subscribed in Contagious' equity financing.
Trinity Mirror is also a revenue sharing partner in its white label version of
Goal Time for the UK. It stands to make 14.2% on every £1 wagered on its white label version
Goal Time.
Trinity Mirror is one of the leaders in online and print media with reported revenues of £663.8m or roughly $1 billion in 2013. Trinity released its half-yearly Financial Report ended June 29th 2014 in late-July. Below is an excerpt:
"* Accelerating growth in digital audience and revenue
Average monthly unique users grew by 91% year on year to 61.3 million and average monthly page views grew by 132% year on year to 440.2 million across our publishing operations with publishing digital revenue growing by almost 50%..."
Click here for full release from Trinity.
In a
November 10th, 2014 review on Trinity Mirror, Davy Research wrote that,
"Publishing digital revenue reportedly grew 44% in the period with growth of 100% in average monthly unique users to over 85m and growth of 93% in average monthly page views to over 575m."
source:
https://www.davyselect.ie/news/article_11254.html
Key fact: Contagious has an approximate $1,116,000 (£620,000) remaining marketing credit with Trinity Mirror and plans to utilize this credit in and around the launch of
Goal Time.
Other Key Alliances
Contagious has aligned itself with Pronto Games, a principal marketing and distribution arm to several companies in the gaming and sports sectors, to aid in the launch, exposure and adoption rates of
Goal Time in markets outside of the UK.
Contagious Gaming's wholly-owned subsidiary, Contagious Sports, entered into an affiliate sales agreement with Pronto Games Ltd. pursuant to which Pronto has been appointed by Contagious Sports as one of its agent's to sell, distribute and promote its live in-play pari-mutuel sports betting platform knows as
Goal Time within its network.
source:
https://www.contagiousgaming.com/2014/11/14/contagious-gaming-signs-affil...
GamingIntelligence.com recently issued an article on the affiliate sales deal, explaining that,
"Its new partner, Pronto Games, was founded in 2008 as a marketing and distribution business for gaming software suppliers by Chicco Merighi, who also founded the world's largest football news portal Goal.com, which was acquired by Perform Group in 2011."
source:
Gaming Intelligence
The Affiliate Agreement with Pronto Games has an initial term of three years from the date
Goal Time is launched on Pronto's affiliate networks.
Another key piece to the
Goal Time puzzle is Contagious' alliance with Satellite Information Services (SiS). SiS provides official live-data for its betting platform. SIS is one of the world's leading suppliers of content, programming, facilities and technology to the betting industries.
Contagious has made key industry-related alliances
SiS is a privately held company whose shareholders include, key gaming names, bookmakers and media including Catalyst Media, Caledonian Investment Group, Ladbrokes, William Hill and Betfred.
source:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...
SiS is a key piece because a sports betting product such as
Goal Time requires the official data in order to time stamp bets placed so they can be reconciled for pay-outs without dispute from players.
Satellite Information Systems' affiliates include the Barclays Premier League and the English professional soccer league. When it comes to official live-data for the betting industry, SiS is among the best in the business.
With SiS delivering sports betting data in real time, Trinity Mirror using its media outlets to increase exposure, and Pronto working to sell, distribute and promote
Goal Time, Contagious Gaming has assembled an admirable team of affiliates and partners.
Wrapping Up
In respect to
Goal Time, Contagious has filed for a US patent (patent pending) and believes its in-play pari-mutuel betting platform can easily be adapted for other sports, such as: Hockey, Baseball, and Football.
Furthermore, Contagious' in-house capabilities are extensive. The company has roughly 20 talented technical resources. Its employees include 3 senior project/product leaders, 3 Platform Architects, 4 Artists and 14 Programmers.
In preparation for the continued evolution of gambling and sports betting, from traditional to online, Contagious has developed the first-of-its-kind sports betting platform:
Goal Time. According to the company, the
"Official launch of Trinity Mirror/Goal Time is set for December 21, 2014" - seven days from today. This is a key reason behind the timing of our introduction this past Wednesday and our follow up today.
Click here to read Part I of our coverage on
Contagious Gaming (CNS:TSXV), our newest Featured Company.
Be sure to conduct your own thorough due diligence on Contagious Gaming so you understand the risks associated. The company is a client of ours and we are shareholders.
All the best with your investments,
PINNACLEDIGEST.
COM
RECENT DEVELOPMENT FROM CONTAGIOUS
On top of everything we discussed in Part II of our coverage, Contagious recently negotiated and announced its planned acquisition of Chelbis.
Click here for the full news release from December 8th, 2014.
Contagious has entered into an agreement to acquire all of the issued and outstanding securities of Chelbis Company Ltd., which runs a well-established and successful suite of online bingo sites, for $4.05 million plus earn-out consideration equal to 1x FY 2015 net income and 1x FY 2016 net income.
Click here to read the details regarding the purchase price.
Chelbis owns and operates well established and successful websites House of Bingo, Gone Bingo, and Harrys Bingo as well as bingo networks Best Bingo Network, Super Bingo Network and Fun Bingo Network. It also manages more than 14 white label bingo partner websites within its networks. Chelbis was established in Malta in 2007 and has since served over 3 million players with approximately 99% of revenues generated from the UK. It recorded adjusted EBITDA of approximately $2.3 million in 2013.
Chelbis has handled over $31.6 million (£17.4 million) in net-win on a cash basis since 2011 and wagers of over $3.4 billion (£1.9 billion) since inception.
Peter Glancy, CEO and director of Contagious, commented:
"The Acquisition of Chelbis is expected to be materially accretive, diversifying our revenue streams, providing consistent cash flow and allowing us to capitalize on synergies which should ultimately increase margins and reduce costs."
Below is an excerpt from Contagious' December 8th press release:
"Rational for Acquisition
1. Significant synergies as a combined entity
* Ability to leverage Contagious Gaming's software platform and library of content for deployment into Chelbis established network with turnkey player liquidity of over $3.4 billion (£1.9 billion) of wagers since inception
* Chelbis' existing customer relationship management ("CRM") infrastructure can be used to handle the Company's requirements for Goal Time in a cost effective manner under the current cost structure
* Access to a dedicated team of approximately 90 employees in a low-cost jurisdiction, adding additional bandwidth which can be utilized by the Company; functions include: customer relationship management, fraud prevention, marketing, information technology, and accounting
2. Attractive purchase price with a track record of revenues and cash flow
* Purchase price of $4,050,000 plus earn-out consideration of 1x FY 2015 Net Income and 1x FY 2016 Net Income
* FY 2013 Adjusted EBITDA of approximately $2.3 million and adjusted Net Income of approximately $2.2 million
* Chelbis to be delivered with unrestricted cash equal to or exceeding $540,000
3. Aligned and experienced management team
* Chelbis founder and senior executive (the "Chelbis Executive") is its current sole shareholder and will be aligned as a significant Contagious Gaming shareholder following the closing of the Acquisition
* The Chelbis Executive will be further incentivized through the earn-out consideration which is tied directly to the future performance of Chelbis
* The Chelbis Executive brings over 18 years of experience as an operator and investor of several gaming and other technology investments"
Click here to read the entire press release from Contagious Gaming released on December 8th.
VISIT CONTAGIOUS GAMING ONLINE
Click on the image below to view Contagious Gaming's corporate presentation
CNS:TSXV Stock Information:
Share price: $0.55
Basic Shares Outstanding (approx.):
70,657,258
Fully Diluted Shares Outstanding (approx.): 77,783,998
Pleaseclick hereto access Contagious Gaming's regulatory filings on SEDAR, the Canadian source for public company information.
Disclosure, Risks Involved and Information on Forward Looking Statements: Please read carefully before proceeding.
Important: Our disclosure for this report on Contagious Gaming Inc. applies to the date this report was released to our subscribers (December 14, 2014) and posted on our website. This disclaimer will never be updated, even after we have sold all of our shares of Contagious Gaming Inc..
All statements in this report, other than statements of historical fact should be considered forward-looking statements. These statements relate to future events or future performance.
Forward-looking statements are often, but not always identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "budget", "scheduled", and similar expressions.
Much of this report is comprised of statements of projection or assumptions. While we consider these projections and assumptions to be reasonable based on our interpretation of information currently available, they may prove to be incorrect. Such statements or information involve substantial known and unknown risks and uncertainties, many of which are beyond Contagious Gaming's control. These risks, uncertainties and other factors include, but are not limited to: the timing and market acceptance of future products, competition in Contagious' markets, the Company's reliance on customers, fluctuations in currency and exchange rates, commodity prices or interest rates, Contagious Gaming's ability to maintain good relations with its employees, changes in the law or regulations regarding the environment or other environmental liabilities, the Company's ability to integrate acquisitions, the Company's ability to protect its intellectual property, and the ability of Contagious Gaming to secure sufficient future funding to carry out all of its business plans.
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