Higher costs outpace revenue growth at Elys in Q3

Elys Game Technology Group reported a 20.0% year-on-year increase in revenue during the third quarter of its 2022 financial year, but higher spending across the business led to a wider net loss.


The gaming technology provider said it experienced success across both its European and US operations in Q3, revealing that its European business returned to profitability during the quarter, with potential for continued earnings and revenue growth in 2023.

In the US, Elys completed the real-money deployment of its retail platform architectures at both the Grand Central Restaurant Bar and Sportsbook in Washington DC and the Ocean Casino Resort in New Jersey.

Elys also said that it began to finalise plans to provide sportsbook technology and services for Lottomatica to support a potential launch in the US during the first quarter of 2023.

These achievements came despite the group posting a wider net loss in the quarter, though executive chairman Michele Ciavarella said its activity in Q3 and its future launch plans with Lottomatica will likely result in further growth.

“We are very excited to go up against the major US mobile operators with our powerful Elys Gameboard technology on the back of Lottomatica’s robust market strength,” Ciavarella said.

“Apart from our core strengths in the US retail channel, this digital distribution will round out Elys’ full suite of sportsbook technology in the US and leverage the market know-how we have developed in the regulated Italian market for the past 20-plus years.”

Turning to the results, revenue reached $9.6m (£8.1m/€9.3m), up from $8.0m in the corresponding three-month period last year. This included $8.9m in net gaming revenue and a further $679,205 in services revenue.

However, total costs also increased 14.4% to $12.7m, as both selling expenses and general and administrative spend climbed year-on-year. Operating loss remained level at $3.1m but after accounting for $564,010 in financial costs, pre-tax loss was $3.8m, compared to $3.5m in Q3 of 2021.

Elys paid $167,574 in income tax – whereas last year it received $284,636 in benefits – and after also including a negative $367,765 foreign currency translation adjustment, the provider ended the quarter with a net loss of $4.2m, wider than $3.7m last year.

The provider did not disclose its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter.