Investors seeking value beyond the moribund resource sector should be looking at select gaming stocks.
That’s the view of Ranjit Narayanan, a Vancouver based research analysts who says 2015 is going to be an interesting year for Contagious Gaming Inc. (TSX: V.CNS, Stock Forum), a company that got listed last year on the TSX Venture Exchange and is currently trading at 40 cents.
The product of a merger with Telos Entertainment of Prince Edward Island, Contagious is rolling out Goal Time, a lottery-style format that creates accumulating jackpots during live football(soccer) matches.
The Contagious platform allows punters to place bets live in play during the game.
The platform is licenced by the UK Gaming Commission and operates in the UK. Expansion, roll out plans, are due to start in Africa starting with Nigeria and Ghana, and other International territories will soon follow.
Goal Time is the co-creation of Contagious Gaming Chief Executive Officer Peter Glancy, a U.K.-based marketing executive who grew up in England’s industrial north watching his home town football team, Preston North End. Preston is a club with a esteemed history and is an original founder of the English Football League.
Prior to his involvement with Contagious, Glancy was the managing director of software development company based in the UK and Spain, he created The format for the Fantastic League a virtual football betting game. It is the first of it’s kind.
In Goal Time “We have created something quite unique and proprietary ’’ Glancy said during a telephone interview with Stockhouse from a London office that features a signed picture of the 1966 England World Cup Winning team and the legendary Tom Finney picture “The Splash” captured during a game against Chelsea 25th April 1956.
“It is a unique product, a unique platform, a first of it’s kind that offers live in play betting for the whole game, as bets are placed, our technology creates accumulating jackpots, which the punters can see building during a live match. We have based it around the number one sport in the world, Football (or soccer in North America),’’ he said.
Goal Time is set up to give players the chance to win or share of Jackpots, by making bets on a time zones that goals could be scored during England’s Barclays Premier League Football games. He said the odds of winning are favourable, because players can choose from 40 different time zones in any game. The game is broken down in to 40 time zones of 5 min each, 20 for the home team 20 for the away team. If a Goal is scored in your 5min selected time zone you win. It's as simple as that.
“If you bet on the first five to 15 or 20 minutes by placing bets on the first four 5 min time zones of the game and you lose, you can come back in,’’ and continue to play by selecting more time zones, he said.
“If it is zero-zero at half time, (no goals) you can buy more tickets in the second half.” And still win the “Jackpot”
At this early stage in the Goal Time roll out, we are building player numbers and we have reached thousands of players, and player numbers continue to grow Glancy said. Contagious is currently prevented from taking bets from punters in North America, due to American legislation and Government gambling restrictions.
But given soccer’s global reach, Contagious is hoping to increase those numbers dramatically via the Goal Time brand, which is offered as a white-label product for United Kingdom newspaper publishing giant Trinity Mirror PLC, as well as other licensees regulated gaming platform.
“The target is to build player numbers into the hundreds of thousands, with our reach it is possible we could reach a million’’ said Glancy. “It might take us 18 months…it might take us 3 or 4 years,” he said. The game has fantastic appeal and easy to play.
Contagious Gaming believes it can achieve that goal because it already has the access to England’s Barclay Premier League, which is broadcast in 212 territories around the world, working with 80 different broadcasters.
According to the Premier league the audience for its games is 4.7 billion, and the number of homes reached last season increased 11% to 643 million.
In a move to raise its profile among soccer fans in both the U.K. and North America, Contagious has signed up former England and Manchester City soccer star Rodney Marsh, who will provide commentary and weekly game analysis for Goal Time.
Marsh’s commentary will be heard on the Goal Time platform prior to English Premier League, Champions League, FA Cup Games, Championship League Play offs and FA Cup Final, the company has said.
Contagious Gaming’s sports betting system is powered by its proprietary robust back office management application and eWallet which can be deployed among a variety of gaming scenarios including: sports betting, slots, bingo and eInstant/iLottery and most importantly adapted to other sports including Ice Hockey, Basketball, Rugby, Cricket.
Telos, a Charlottetown, Prince Edward Island company which is engaged in the the emerging U.S. Instant iLottery development market. The company is also engaged in the development of content for regulated gaming and lottery markets within North America and a worldwide target market.
The Canadian company was also among the first gaming developers to pursue secured contracts in the U.S., which will deploy its library of titles to State lotteries and its players for a share of the revenue generated.
As a result of the Telos merger, Contagious is also positioned to become a leader in online lottery development in the U.S. through partnerships with GTECK S.P.A and Scientific Games Corp. (NASDAQ: SGMS, Stock Forum), two of the largest gaming services providers to US National and provincial lotteries.
(On April 7 GTECK said it has completed a business combination with International Game Technology, forming the world’s leading end-to-end gaming company.)
Last month, Contagious said its Crystal Cashword and All-Star Bing digital eInstant games have been launched in Georgia via GTECH Corp.’s interactive lottery platform, making Georgia the first U.S. state to offer a full line of iLottery products.
“This is an exciting opportunity for the company as Georgia is a significant U.S. lottery market with ticket sales in 2013 exceeding US$3.9 billion, including US$2.6 billion of instant ticket sales,’’ Glancy said at the time.
The hope is that GTECH can now advance its interactive lottery platform into other U.S. states, which will allow Contagious to participate alongside GTECH in additional markets. It is understood other state lotteries are now in discussions with Gtech and Scientific Games and follow Georgia’s lead in to E-instant ticketing.
Since Contagious Gaming began trading in September, 2014, the stock has bounced between 64 cents and 31 cents, leaving Contagious with a market cap this week of $28.1 million, based on 73.8 million shares outstanding.
But at current trading levels, Contagious shares are reasonably valued said Ranjit Narayanan, a special situations analyst with Global Securities Ltd. in Vancouver who sees opportunity in the gaming sector.
“I expect to see some interesting things happen with Contagious this year,’’ he said.
In addition to Trinity Mirror, Narayanan likes the fact that Goal Time has established some important partnerships
Among them is Goal Time partner Satellite Information Services Ltd. (SIS), the number 1 supplier of data, live Horse and dog racing, broadcast of live football, virtual sports and commentary to the retail betting industry, within the United Kingdom and Europe and with a Worldwide reach.
Contagious also has a sales agreement with Pronto Games Ltd. to sell, distribute and promote Goal Time to its gaming and sports media network across Northern and Eastern Europe, and Asia.
In the quarter ended December 31, 2014, Contagious Gaming reported a loss of $1.9 million or 5 cents a share on software development revenue of $357,099.
At that time, the company had over $3 million in cash and total assets of $14.2 million.
“I am very passionate and excited about what we have created,” Glancy said. “I’m very enthusiastic about the sectors that we are working in, it’s an exciting arena with huge opportunities for growth,’’ he said.
A key priority is to syndicate Goal Time across Europe and Internationally.
“We are having conversations with significant operators in the sector,” Glancy said. That includes ongoing discussions with a Chinese company as well as some of the largest gaming companies and lottery operators in various countries across Europe. The company is also in talks to take the game to Brazil and China.
Meanwhile, Contagious will consider adapting the format to Ice hockey, something that Glancy said the company can easily do.
FULL DISCLOSURE: Contagious Gaming is a client of Stockhouse Publishing.