Aim-listed GAN, a gaming software company which works with casinos to develop online games and apps, has seen its shares shoot up this morning as one US state decided to legalise real-money internet gaming.
The Pennsylvanian House of Representatives last night finally approved a bill which allows users to gamble actual money online.
With a population of 12.8m, Pennsylvania has doubled the number of Americans who can now play real-money games – and, therefore, GAN's addressable market. The company's share price popped by 7.69 per cent in early morning trading to 31.5p.
“Pennsylvania is now America’s fourth state to regulate internet gaming, and may jumpstart the regulatory cycle for internet gaming in the US,” said GAN's chief executive Dermot Smurfit.
“GAN is the only fully licensed B2B [business-to-business]-only platform vendor in neighbouring New Jersey, and one of the very few B2B-only technology vendors with the requisite technical expertise and ‘day one’ New Jersey experience to credibly serve Pennsylvania’s land-based casinos.”
GAN, whose business is mainly concentrated in the US, listed on Aim in 2016 in the hope that several American states were soon to legalise real-money internet gaming.
But its share price slumped over the following years as US lawmakers proved more reluctant than expected to make any changes.
Losing hope in any rapid changes, GAN soon realised it needed to change its strategy. Setting real-money gaming to one side, it began to work with casinos in states where the practice is illegal to develop fake-money offerings.
It now boasts some of the US's largest casinos among its clients. Rather than allowing casino customers to gamble real money on online games, GAN's games –developed in partnership with the casinos – work within the boundaries of the law by allowing people to buy “fake money” and gamble with that.
It also keeps clients returning to their physical casino, by offering rewards for regular users.
Smurfit told City A.M. that, because this concept is not well understood in the UK, Aim investors are not seeing the potential behind GAN's business.
Added to that, most UK investors were unimpressed every time the company announced a new deal with a big-name US casino – simply because they are unfamiliar with the US casino market.
He revealed that GAN would be hoping to change its listing venue to New York in time, which would help the company escalate its market value.