GAN Stock Explodes Higher on Pennsylvania iGaming Deal With Cordish
Posted on: May 28, 2020, 10:03h.
Last updated on: May 28, 2020, 10:51h.
Shares of gaming software maker GAN Ltd. (NASDAQ:GAN) are soaring Thursday after the company said it inked a deal with Cordish Companies to provide iGaming services tied to two Pennsylvania casinos.
Up more than 16 percent at this writing Thursday, GAN stock is poised for its best intraday performance since its initial public offering (IPO) earlier this month. While DraftKings (NASDAQ:DKNG) is commanding plenty of attention as the shiny new object on the gaming equity block, GAN is impressing in its own right, having more than doubled from its IPO price of $8.50. The stock currently trades above $19.
The Cordish Companies has engaged GAN as their enterprise software Platform provider to power their new ‘PlayLive!’ branded Internet gambling business in the State of Pennsylvania, complementing the development of two new Live!-branded gaming facilities in Philadelphia and Pittsburgh,” according to the statement.
The two land-based venues being referenced are the Live! Casino & Hotel, located in the Stadium Entertainment District in Philadelphia, and the Live! Casino in Westmoreland County, near Pittsburgh. Cordish expects both properties to open later this year.
Why It Matters
It may appear that market participants are overreacting to news of the Cordish agreement by pumping GAN stock higher by more than 16 percent. But there may be something to the enthusiasm.
While brick-and-mortar casinos across the US were closed since mid-March because of the coronavirus pandemic, iGaming took off in some areas, including Pennsylvania. The Keystone State, which just started iGaming last summer, reported exponential online casino revenue growth in April compared to March amid the COVID-19 shutdown of traditional gaming venues.
Cordish and GAN have a previously existing relationship that dates back to 2015, when the software company began providing simulated online gaming tied to the operator’s Live! Casino & Hotel at Arundel Mills in Hanover, Md.
UK-based GAN has three clients in Pennsylvania, including Cordish and Parx Casino.
Another Reason for the Ebullience
There’s another reason investors are fawning over GAN stock. Since its IPO just over a month ago, DraftKings is said to be sporting valuations comparable to a cloud computing company. As a provider of software-as-a-service (SaaS) products and services, GAN actually is a cloud computing firm, and markets are extending that treatment to the newly public software provider.
Cloud is one of the hottest corners of the broader technology sector this year. For example, the Indxx Global Cloud Computing Index is higher by 21.50 percent year-to-date, while the S&P 500 Technology Index is up just six percent.
GAN’s US iGaming footprint includes New Jersey and Pennsylvania – two of the largest states for that activity. The company also has clients in Indiana, Michigan, and Ohio, and is forecasting the launch of online casinos in the latter two states in the first half of 2021.
The GAN/Cordish offering in Pennsylvania will include online slots and table games, as well as some non-traditional games not found in land-based casinos.
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