GAN and Paddy Power Betfair expand US collaboration

10th Jan 2019 10:12

(Sharecast News) - Gambling software provider GAN has signed an extension to its long-standing partnership with Paddy Power Betfair in the US.The Irish group will provide the platform for PPB's US business, FanDuel, to quickly get its internet casino and sports betting up and running in Pennsylvania and add internet sports betting in West Virginia.FanDuel has also agreed to license GAN's US patented technology that allows bricks and mortar casino punters to link their existing loyalty cards to internet gambling accounts and receive loyalty points in exchange for online gambling.GAN will receive an initial cash payment from PPB and represents a "material increase in the value of the partnership to GAN across revenue share, professional services and patent licensing fees".The contract is for five years and offers the potential for FanDuel to take GAN into further US States as they adapt their regulation after the US Supreme Court's decision to open up the market last year.This deal underpins our FY19 revenue forecast of £19m and our Target Price of 85p and we will review both when the company provides a trading update for the Financial Year to December'18 in the next few weeks.CEO Dermot Smurfit said: "The contract extension combined with US patent licensing represents a significant milestone in GAN's US evolution and reinforces our view that in the heavily regulated US online gambling market, effective and compliant 'platforms' are a premium component of the supply chain rather than a commodity."GAN is therefore very well placed to capitalize on the growth in US online gambling markets in terms of new operator clients, new States and underlying growth momentum."PPB and GAN have been collaborating since 2013, first launching launch www.betfaircasino.com and later establishing an internet casino in New Jersey.Last September, FanDuel launched internet sports betting integrated into GAN's platform.Broker Liberum estimated GAN's revenues from PPB were around $1m.