GAN Stock Soars on 10-Year Michigan Deal with Wynn Resorts
Posted on: October 5, 2020, 09:58h.
Last updated on: October 5, 2020, 12:23h.
GAN Ltd. (NASDAQ:GAN) stock is higher by more than 13 percent in midday trading, making it one of the best-performing names in the gaming space to start the week. The rise came after the company said it struck a 10-year pact with Wynn Resorts (NASDAQ:WYNN) to provide software for online casinos and sports wagering in Michigan.
The financial terms of the deal weren’t disclosed. UK-based GAN will provide its cloud computing software platform to Wynn as the casino operator aims to launch iGaming and sports betting in the Wolverine State in November.
The Michigan launch between GAN and Wynn will be a part of the market access agreement between GAN and the Sault Ste. Marie Tribe of Chippewa Indians, who operate five casinos under the Kewadin Casinos brand in Michigan,” according to a statement.
The British company reached an agreement with the Michigan tribe in late March. But at that time, the involvement of Wynn wasn’t revealed. Last December, Michigan policymakers authorized legislation permitting sports betting and online gaming in the state, with the first sportsbook there opening in March.
Wynn Prestige Helping GAN Stock
Although it’s been trading on the Nasdaq Stock Exchange for barely more than five months, GAN is rapidly developing a reputation for soaring on new client news.
Some of the firm’s agreements announced this year include accords with Cordish Cos. and Penn National Gaming’s Penn Interactive Ventures unit. Those are solid grabs for the cloud computing company, but they lack the cache of Wynn.
Las Vegas-based Wynn operates three domestic casinos — two in its home city, and Encore Boston Harbor. However, the operator “has a substantial database of patrons’ resident within the Michigan region,” that online casinos and sports wagering under the Wynn brand can be marketed to, according to a statement.
As part of the deal, GAN will publish third-party sports wagering content complemented by Wynn’s previously established partnership with Betbull Limited.
Betting on Michigan Allure
There are just three commercials in Detroit, with tribal operators dominating the rest of the state’s land-based gaming venues. But gaming companies are eager to access the Wolverine State’s new internet casinos and sports betting markets.
The state is the eighth-largest by population and it could potentially be a significant player in the Midwest sports betting scene. That’s if it can replicate or exceed the success of its southern neighbor, Indiana.
Earlier this year, GAN estimated iGaming in the state could generate $377 million in revenue in the first full year, growing to $836 million in the fourth year.
As of Sept. 14, the three Detroit casinos posted a combined sports wagering handle of $16.33 million, good for revenue of $2.08 million, according to the Michigan Gaming Control Board (MGCB).
Two things are important to note about that data. First, sports wagering in Michigan went live just as sports were shutting down because of the coronavirus pandemic. Second, the MGCB figures don’t include tribal numbers, because those operators are sovereign and not required to report related data to the state.
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