GAN Update

I had brought GAN, a third-party SAAS company that serves casinos and sports betting industries. Recently I decided to sell out and put my funds into more high confidence positions that are also more widely followed. My reasons for selling GAN were primarily 2 reasons.

  1. Needed funds to buy companies that I feel have a longer runway of growth.
  2. While I always knew that GAN had limited scope for growth due to their low take rates (I projected peak revenue of $600 to $750M based on a 20% market share of their clients of $30B US sports betting and igaming market plus some international rev) news from MI online gaming market showed that even the 20% market share may be a stretch. Fanduel, Draftkings, and Mgmbets took the top 3 spots for sports betting and they are all non-GAN clients with a total of 77% market share; Penn a GAN client had 11% share. When it comes to igaming Fanduel (GAN client only for igaming) had 18%, while MGM and Draftkings had 33% and 20% market share respectively. Seems like the top online platforms want all in-house software platforms. This makes me wonder if GAN clients can even mop up a 20% market share. If GAN had amazing software they should be signing up casinos every few weeks. They lost PARC this year and Fanduel’s sports betting last year. They will do a little over $100M in rev this year thanks to the Coolbets acquisition but all of these made the outlook hazy despite the very low fwd P/S of just ~6!

Just thought I should let you know my decision.