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Inflation Not Dampening Online Gaming as Golden Matrix Group Inc. (NASDAQ: GMGI) Accelerates Expansion
May 17, 2022

Inflation Not Dampening Online Gaming as Golden Matrix Group Inc. (NASDAQ: GMGI) Accelerates Expansion

  • DraftKings sees no inflationary impact on player demand in first quarter report
  • While major B2C online gaming companies struggle with exorbitant costs, Golden Matrix’s B2C model has resulted in 14 consecutive profitable quarters
  • Golden Matrix acquired 80% of B2C prize competition company RKings Competitions Ltd, an immediately accretive move that facilitates expansion into new markets

While it would seem logical that periods of rising inflation would cause a slowdown within the gambling industry as consumers tighten their purse strings, history says otherwise. Growth remains mostly unabated because the benefits of wider legalization have outweighed economic impacts, particularly in recent years as more U.S. states join the legal and online gambling renaissance. That said, competition has increased, meaning operators have to be more mindful than ever before about controlling user acquisitions costs (“UAC”), which plays right into the hands of Golden Matrix Group (NASDAQ: GMGI), which has its roots in B2B (business-to-business) products as it matriculates into B2C (business-to-consumer) with a unique model.

DraftKings (NASDAQ: DKNG) is a prime representative of the B2C market today. In their recent report on the first quarter of 2022, the company conveyed that they weren’t seeing any impact from inflationary pressures on customer demand as it grew Q1 revenue 34% from the year prior quarter to $417 million. Operating expenses surge 46% y-o-y to $933 million, contributing to a net loss of $468 million for the quarter. DraftKings pegged its average revenue per monthly unique player (“MUP”) at $67, up 11% from Q1 2021.

Point being, it’s an expensive dogfight in the U.S. to win customers in states where gambling is legal and to expand into states where online betting is launching. The U.S. is a convenient example, but the trend is similar throughout the world.

Golden Matrix is not the company featured during halftime commercials, but they are the company that can make it possible for online operators to better afford paying for them. Not having a huge marketing burn is a big part of the reason that GMGI has reported 14 straight profitable quarters. 

The Las Vegas-based company is primarily active in the Asia Pacific region where it is a leading provider of turnkey and white label gaming platforms, Esports technology and gaming content. The company is highly differentiated from peers as it pioneers highly modular, configurable, and scalable gaming platforms (both mobile and desktop and agnostic to operating system) designed specifically to efficiently promote user acquisition, engagement, retention, and monetization.   

Leading gaming content providers such as Asia Gaming, GameArt, Microgaming, Playtech, and many more provide their state of the art and world dominant casino games to Golden Matrix’s GM-X System, which include a swath of products spanning slots, live games, sports, and table games. The GM-X and GMX-Ag platforms are the industries benchmark, providing access to over 10,000 games across more than 25 providers.

In April, Golden Matrix took its new B2B aggregate gaming system, GMX-Ag, live with eight established online casino operators in six countries. While strategic and timely to expand its B2B offerings in APAC, Golden Matrix CEO Brian Goodman sees the new GMX-Ag suite as opening new market opportunities outside of its traditional markets.

While it executes on expansion via organic growth, Golden Matrix is also looking to acquisitions to accelerate expansion. In December, the company completed buying 80% of B2C prize competition company RKings Competitions Ltd, with provisions to buy the remaining 20% in the future. RKings represents GMGI’s foray into the B2C competition space, a market that has been thriving for decades as a means for brands to get in front of consumers. 

RKings has a presence throughout the U.K. and Europe and Goodman expects the popularity to resonate in new markets. First up is Mexico where Golden Matrix now has a gaming permit pending. Other jurisdictions are expected to follow.

While most online gaming companies continue to struggle to contain costs, much less reach profitability, Golden Matrix continues to shine. Combining revenue streams post-acquisition helped bolster GMGI’s overall financial performance during the first fiscal quarter ended January 31, 2022. Revenue surged 355% y-o-y to $8.88 million. “Due to the platform’s scalability, coupled with low player acquisition and marketing costs, we expect RKings’ contributions to revenues and profits to grow significantly in the months and years ahead,” said Goodman.

For more information, visit the company’s website at www.GoldenMatrix.com

NOTE TO INVESTORS: The latest news and updates relating to GMGI are available in the company’s newsroom at https://ibn.fm/GMGI

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