Esports Entertainment Group, Inc. (GMBL) on Q4 2021 Results - Earnings Call Transcript
Operator: Good day, and welcome to the Esports Entertainment Group Fiscal 2021 Q4 Earnings Conference Call. Today’s conference is being recorded. Before we begin, I’m just going to read some brief Safe Harbor language. Statements we make during this call that are not statements of historical fact constitute forward-looking statements that are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward-looking statements. For more information, please refer to the risks and uncertainties and other factors that could cause actual results to differ materially from our historical results and for our forecast. We assume no responsibility for updating forward-looking statements. For more information, please refer to the risk and uncertainties and other factors discussed in our SEC filings. Now at this time, I’d like to turn the conference over to Mr. Grant Johnson, CEO. Please go ahead, sir.
Grant Johnson: Thank you. Welcome, everyone. Thank you for joining us for our fiscal fourth quarter earnings call. I am very proud of how our team continues to exceed execute on our results for both the quarter, as well as the full, and the full year reflect that. In the past year, we've grown from less than 50 employees to over 250. Our revenue base has scaled alongside with that. Our fiscal Q4 revenue increasing 63% quarter-over-quarter to $8.8 million. We're expecting to show even stronger rate of growth this fiscal quarter of 2022, as we digest our recent acquisitions. In addition, that strong revenue growth, we continue to make significant strides in our goal to build the world's best Esports Entertainment online gambling company. As those of you who follow the company know, we break the business into two divisions, EEG iGaming and EEG Games. I’ll walk through some of the operational highlights for each division, and then pass the line to Dan, to go into further details on the numbers. Starting with our iGaming, our strategy is to build the best-in-class eSports betting platform before casino sportsbook functionality. On July 14, we completed the acquisition of BetHard, a rapidly growing B2C traditional sports betting operator. In addition to generating over $30 million in revenue, BetHard brings with it both the Swedish and the Spanish license. Well, it's still early days, we've made significant progress in integrating Lucky Dino and BetHard into our existing SportNation by infrastructure. We expect to recognize meaningful revenue synergies as we expand our cross-sell efforts across our brands. In addition to the acquisitions, we've made significant strides growing our brands organically. In August, we launched the new pay and play casino brand in Finland called Fiksukasino. Pay and play is a rapidly growing concept in the online gambling industry. That allows the player to bypass the onerous registration processes, enabling safe and reliable play without delay. This is a feature that many of our players and affiliates have been asking for, and our team was able to deliver. Since the launch, the brand has significantly exceeded our internal expectations. Turning focus to VIE, our flagship eSports betting brand, we continue to make exciting progress here. Much of our current marketing today has been spent in Latin America, which is the third largest eSports market globally, growing more than 17% annually. So far, we’ve signed up marketing agreements with Infamous Gaming, Peru's second largest eSports organization, Movistar Liga Pro gaming league, SG Esports, a Brazilian eSports organization. We are particularly excited with the SG sponsorship as their Dota 2 team with on the Vie logo as a primary jersey sponsor during the international in October, one of the most viewed eSports tournaments of the year. This is in addition, of course to the Harris Blitzer’s men's CS-GO team under the Dignitas brand. Moving to our North American efforts, which we expect to be a big growth area for Vie and for the company. I'd like to give you an update, which is a question that comes up frequently to our New Jersey license application. We're now in the final stages of what has been a long process. The pandemic was definitely a factor and the length of time it took us to get to this point, as the process of document gathering was at times challenging. Our software has been submitted to the Digilab , which is currently in the ethical audit process. Based on our successful mock audits with the testing lab, we do not anticipate any issues here. Once the testing has been completed, we're able to apply for our transactional waiver and begin making a market for eSports wagering in the state of New Jersey. In anticipation of our imminent launch, we opened our New Jersey office in Hoboken in September, and have begun scaling up staff in the state. With our New Jersey launch now on the horizon, we have our sights set on additional U.S. jurisdictions. Earlier this summer, two of our executives, our CFO, Dan Marks, and VP of Strategy and IR, Jeff Cohen, were invited to testify on behalf of the industry in the Ohio State Senate by Select Committee on gaming. In September, the state government of Ohio announced they were very committed to adding eSports to gambling framework as a priority, and this is in large part due to the presentations by these two gentlemen. Legislation is expected to be written and voted upon this fall, and we are confident that eSports including the state sports betting bill, we intend to apply and expect to receive a license in the state in 2022. In addition to Ohio, we are in discussions with several other U.S. states, as well as the province of Ontario in Canada. Turning now to the other divisions, EEG Games, in June, we completed the acquisition of ggCircuit and Helix. This has been a transformative transaction for us, bringing with us an excellent team and created a vertically integrated solution for Esports Entertainment. Because of the assets we bring to bear, we continue to attract interest from high profile organizations looking to enter the esports space. Since May, we signed exclusive agreements with the Cleveland Cavaliers, the LA Football Club, the LA Chargers, the New York Rangers, Indianapolis Colts, and the current Super Bowl champions, the Tampa Bay Buccaneers. Additionally, we entered into a similar relationship with the Indian Gaming Esports Association, IGEA, which is the first ever tribal eSports organization to advance eSports adoption amongst tribal nations and casinos. These groups are partnering with us specifically, they've done extensive due diligence and recognize that our combined assets are best-in-class for these non-endemics looking to enter in the esports and gaming ecosystem. In addition to the 13 teams we've already signed, we are in discussions with another 20 organizations that we expect to sign over the coming months. I'd like to take a minute and dig in as to how we monetize and all these exciting partnership, marketing partnerships. When we initially started signing these agreements, our plan was to monetize the relationships by charging players to play, in the tournaments we're running on behalf of the teams. Other revenues will be generated from sponsorship fees for brands wishing to target the highly coveted 18 to 35 gamer demographic. However, in recent months, we've built a new customer facing platform that ties together all of our capabilities in the EEG games division, and add several new revenue streams including more targeted advertising, allowing smaller local brands access, e-commerce, subscriptions, pay-to-play, and of course, crypto. Occasionally, or additionally, sorry, we can also monetize through broadcasting our tournaments on Twitch and ESTD, which we signed a partnership with in late August. This newly integrated platform will also be the primary delivery method for LANduel, our player versus player skill based betting platform that we will be able to drive further details on this new platform in the coming weeks, as to the specific dates for the inaugural launch taking place later this fall in Atlantic City. Alongside this, we will begin running the large protein tournaments. As we've communicated to our investors in the past, we plan to augment these digital relationships with physical installations of our Helix gaming centers in future. So far, we've announced two new centers in North America, the first one will be at the Hall of Fame villages in Canton, Ohio, and the second in Los Angeles at UCLA in their Student Union Building. We expect UCLA to open prior to the end of this year with all of them coming online in the first quarter of 2022. Our plan is to open approximately one center a quarter for the next two years. And we are in discussions with several of the organizations the proteins referenced above, of the reference earlier about which potential locations these will be. Lastly, I'd like to touch on ggCircuit, which is the infrastructure software that underpins our EEG Games division. The reminder to our investors, ggCircuit is a B2B operating system for land center management. The company currently has over 650 centers and over 15,000 screens in those centers on their network, which is up from 517 centers and 11,500 screens at the beginning of this calendar year. The development team has continued to improve the product offering for our customers. In May, we announced the rollout of a crypto mining solution that is a free add-on to the ggLeap subscribers. The crypto miner enables center owners to utilize computer power to mine for crypto, mainly ethereum today, the opt-in to the initiative with the click of a button. Since launch this initiative is substantially outperformed our expectations with over 300 centers across 58 countries, obtaining mine over a million ethereum since launch. In addition to our crypto money operations, we also allow our partners to deposit withdraw of dry crypto from our wagering platform on Vie.bet. We will be adding additional iGaming operations once the use of crypto is approved by the various gaming commissions. I'd like to give an update on various financing. I’d like to address some of the misinformation that's been promoted in stock chat groups regarding our financing and various tools at our disposal. As we disclose back in the third quarter, we put a shelf in place for $100 million. And I actually in fact in February used $30 million of this vehicle to finance the purchase of Lucky Dino, which has a $30 million in revenues of approximately $5 million positive cash flow. This September, we liked an ATM into the shelf. This did not replace or add to the shelf. It simply gave us an ability to draw it down in small amounts of substantial cost savings. Today, we have no use of this vehicle. This has been misrepresented by certain groups with an agenda to negatively affect the share price. We believe as do all five of the analyst who cover us, the share price is well below where it should be based on comparable companies in the market. As the largest single shareholder, my interests are in direct alignment with all the shareholders. To that end, we've been exploring many alternatives. One such alternative was our partnership with Game Fund, it’s a $300 million fund that’s dedicated to financing eSports and gaming gambling operations. Being a partner here, we receive benefits having clearly a relationship with large family source of capital is important, as well as receiving strategic information for partnerships with potential M&A activity. We continue exploring negotiate other forms of capital, such as metaverse partners, which we'll be able to discuss in more detail shortly. I will now hand over the discussion to our CFO, Dan Marks, who is going to go through the numbers for you. Thank you. Dan?
Dan Marks: Thank you, Grant, and good afternoon, everyone. And thanks again for joining us today. This time last year our Q4 fiscal 2020 earnings call marked a significant milestone for the company, as it was the first post on NASDAQ listing. Fast forward 12-months and we've completed six material acquisitions and two rounds of capital raising, in what has been a monumental year for the company. But it leaves us very well positioned in our ambition to be the global leader in eSports entertainment, betting and digital gaming. Before I jump into the financials, let me take a brief moment to summarize the key highlights that will frame our 2021 full year results. First, we moved at an unrelenting pace to execute against our core growth strategy to acquire and consolidate three B2C digital gaming businesses, Argyll Entertainment, Lucky Dino and BetHard to operate in eight countries in Europe and beyond. Furthermore, we have acquired and consolidated both retail and online B2C eSports competition businesses through our eSports gaming league and Helix acquisitions, and via the purchase of ggCircuit we have acquired and expanded the nation's largest eSports competition B2B software business. In support of our growth strategy, the NASDAQ listing and follow on offerings allowed us to deploy capital to expand resources, strengthen the corporate enterprise, and to continue to develop our state of the art betting platform Vie.gg noting eSports with digital gaming. Finally, we have established affiliate partnerships with 13 pro sports teams in the U.S. to leave their databases into online and land based eSports competitions. And furthermore, we'll use our acquisition of Genji Analytics and eSports data analytics company to home data from EEG’s multiple B2B and B2C operations for monetization purposes, and to improve risk management in setting eSports betting lines. To reiterate Grant’s messaging, 2021 was a truly foundational year for EEG. And while the investments required to position us for continued expansion, increased our net losses, a significant proportion of those expenses are now behind us. On our path to achieving scale and diversification, there are aspects to our revenues and EBITDA that will make comparatives challenging due to the sheer number of acquisitions and material growth across the year. The company was effectively pre revenue during fiscal 2020, and as such comparative, relative growth rates against last year are difficult. That being said, I will move on to a review of our Q4 quarterly performance, our four year 2021 performance and provide some guidance to Q1 fiscal 2022. Overall, from a financial statement standpoint, fourth quarter 2021 highlights include $8.8 million of net revenue in the quarter, a $3.4 million or 63% increase on net revenues versus the prior quarter. This increase was driven by incorporating a full quarter of revenues from the Lucky Dino acquisition which completed on the 1st of March, together with one month of revenues from the acquisition of ggCircuit and Helix, which completes on the 1st of June. The quarter-on-quarter growth in net revenues however, it was actually slightly dampened by a reduction in gross gaming margins across our iGaming business. While handle on our other sports cooking casino brands increased in Q4 by 20% to $68 million, gross gaming margins reduced to 4.4% from 6.7% in the prior quarter, as a result of some material wins within some of our high net value players. Within our Lucky Dino casino brands, average monthly handled during the quarter rose one percentage point to $45 million. But gross margins across the quarter reduced to 6.5% down from 6.8% in March. However, average deposits per customer in our casino brands increased by 5% in the quarter to $312 per active player, and leaves us well positioned looking forward. Despite the headwinds caused by lower gross gaming margins within the iGaming division in the quarter, gross margins across the entire business incorporating total net revenues less total cost of revenues increased to 59% from 57% in the previous quarter. From an operating expense standpoint, we saw quarter-on-quarter increases in sales and marketing of $2.4 million and G&A expenses of $6.2 million. These increases are primarily driven by having a four quarters worth of Lucky Dino and one month worth of ggCircuit Helix expenses in Q4 versus just one month Lucky Dino expenses in Q3. But the increase in G&A costs was also driven by some one-off transaction costs totaling $2.1 million, namely those related to the closing of ggCircuit and Helix, and cost associated with a BetHard acquisition that closed in early July, together, with an increase $1 million in depreciation and amortization over the prior quarter. On the other expenses line, we've benefited from the improvement in the fair value of our warrant liabilities to the tune of $3.2 million, and an income tax benefit through the release of deferred tax liabilities of $3.8 million. On a GAAP basis, therefore, net loss for the quarter was $4.8 million compared to a net loss of $12.4 million in the previous quarter. On a non-GAAP basis, adjusted for non-cash charges, tax benefits and one-off transactional costs, adjusted EBITDA was negative $5.5 million for the quarter. Next, let me briefly review our full year 2021 results. From being pre revenue in 2020, we generated $16.8 million of revenues in full year fiscal 2021. This was predominantly driven by 11-months of revenue from Argyll, and four months of revenue from Lucky Dino. In terms of total operating expenses, the cost associated with six acquisitions and two funding rounds during the year meant we incurred an elevated level of professional advisory services, and other related costs, as we executed against our public listing and M&A strategies. We also invested and will continue to invest in operational excellence through the continued expansion of our internal resources, as well as the building out of our betting and tournament platforms. Sequentially, imposed an additional $3 million of stock compensation charges and $3.1 million in depreciation and amortization charges, total operating losses for the year were $25.7 million. Total net loss for the year on a GAAP basis, having accounted for changes in the fair value of both warrant liabilities and contingent consideration offset by the previously mentioned release of deferred tax liabilities was $26.4 million, or minus $1.68 per weighted average diluted share. This compared to a net loss of $10.4 million in 2020 or minus $1.50 per weighted average diluted share. The weighted average diluted share count for the full year 2021 was $15.7 million compared to $6.9 million in 2020. On a non-GAAP basis, our adjusted EBITDA for fiscal 2021 was minus $14 million, compared to minus $2.3 million in 2020. From a balance sheet perspective, as of June 30, we had $19.9 million in cash, driven by the private placement of $35 million of convertible notes in May, which were part used to fund the ggCircuit and Helix acquisitions. We had approximately $17.5 million in working capital and total shareholders’ equity is $74.8 million, up $63.4 million from our position at the end of fiscal 2020. Our current net cash burn is approximately $1 million per month. Post the acquisitions of ggCircuit and Helix, together with the monthly interest payments owed on the $35 million notes. It remains a critical time to innovate and advance our platforms. And we will continue to invest in our proprietary software development, both with developing our betting platform and our tournament platforms, as we look to monetize the opportunities that present themselves with the pro sports team partnerships we have announced. In summary, therefore, in Q4 and throughout fiscal 2021, we have continued to show material quarter-on-quarter growth, as both our organic and acquisitive growth strategies have been executed. We will look to build on these foundations and start to realize the cross-sell benefits and efficiencies that bringing together the various acquisitions we have undertaken will present. Looking forward to fiscal 2022 guidance, we are very excited about the growth and momentum of our iGaming business. The acquisition of BetHard in July brings new material revenue and EBITDA streams, together with two new gaming licenses, and increased cross-sell opportunities between our brands. Consolidating our digital gaming businesses will allow us to exploit both revenues and expense synergies. Launching our betting platform in New Jersey in the coming weeks, together with exploring licensed options in other states, offers further growth opportunities for the iGaming division. On our EEG Game side, the brand partnerships we have announced, together with the enhancements of our tournament platforms will allow access to new customers, both online and in life in-person events at our Helix centers, which will drive monetization opportunities. The growth in our ggCircuit B2B software business will continue, augmented by ever growing cryptocurrency mining opportunities, which have gone at $1 million in revenues since we started mining late in Q4. The launch of LANduel later this year, our player versus player skill-based betting application is also a hugely exciting addition to our product suite. We are therefore still guiding to an annual revenue of over $100 million in fiscal 2022, with a range of $16 MI million to $16.5 million in revenues for the first quarter, split approximately 90-10 between iGaming and EEG Games businesses. We are not providing guidance for 2022 adjusted EBITDA at this time. But we are squarely focused on reaching positive adjusted EBITDA, we are still forecasting we will achieve before the end of calendar 2022. We will continue to advance our critical growth focused investments, namely the development and enhancement of our proprietary betting and tournament platforms. But we'll realize revenue and expense benefits and savings from our in large group as the year progresses. And we look forward to updating the markets throughout the year, as we execute our plans. On one final and more technical note, we have experienced a tremendous amount of growth across the past year, both in terms of expansion, acquisition and capital. This required a heavy lift over the last few months, which is why our call was delayed a couple of weeks to today. Moving forward, we will return to a more normal schedule, starting with the mid November update on Q1. With that, please can we now open the lines for Q&A? Operator?
Operator: Thank you. And we'll go first to Michael Kupinski of Noble Capital Markets.
Michael Kupinski: Thank you, and thanks for taking the question. Good afternoon. Can you provide an update on the expectations of revenue contributions that you expect from New Jersey? I know that you said that you think it's going to be up and running in the next couple of weeks. And I know in the past you've kind of given us some thoughts in terms of the ramp in New Jersey, I was wondering if you can update us on what your thoughts are there.
Dan Marks: Thanks for asking the question. I think, we've been very prudent in our estimates with regards to the revenue contribution that New Jersey will give to us. It's a very small part of the $100 million guidance as things stand. But I think we're excited to launch there and see as the only eSports lead gaming operation. We do see big opportunities, we're just being prudent with regards to our forecast. So as things stand, it is a very small part of that $100 million. Obviously, as time progresses and we get our marketing plans in place we hope to see either exceeding that forecast but certainly growing as the months and years progress.
Michael Kupinski: And in terms of the revenues in the fiscal fourth quarter, obviously, they were in line with my expectations. Were there any surprises in terms of where the revenues came from, particularly, kind of looking at Argyll versus Lucky Dino versus Helix and so forth?
Dan Marks: No surprises. To be honest, I mean, they were broadly in line with what we were hoping for. I think margins were down on the gross gaming side as we had some big winners, but our overall handle was up, which is a good combination to have looking forward as margins stabilized, we should start seeing the benefit of that -- not stable, as margins normalize, obviously, having higher handle means we should see the benefit of that going forward. So now, the forecasts were pretty much in line with our expectations.
Michael Kupinski: And in terms of value, just the expenses, G&A expenses were higher, obviously, you had some transactional expenses in there. So can you just kind of give us some thoughts, though, in terms of how G&A expenses are going to look as we go forward into this quarter? And just kind of maybe give us a run rate for those expenses if you can?
Dan Marks: Well, I mean, I know for a fact we had a $3 to $4 million of one-off costs within our Q4 expense figures, our G&A expenses. So those will not be being repeated in our run rate going forward. I can provide additional detail separately with regards to what that total looks like. But it will certainly be lower without those one-off additional costs that we saw in Q4.
Michael Kupinski: Yeah. It wasn't surprising to see sales and marketing a little higher, obviously, you have a number of products and services that you're out there marketing. I was wondering if you can give us some thoughts in terms of the elevation in sales and marketing and the new product launches. And is the Q4 a good run rate for upcoming quarters? Or, do you think that, we start to see maybe as a percent of revenues that that number comes down? How should we look at that number?
Dan Marks: Well, I mean, with the acquisition of BetHard at the start of July, obviously, our overall sales and marketing centers will go up. So we've obviously got a new brand within our overall group. So from that perspective, sales and marketing will increase quarter-on-quarter. But certainly as the year progresses, sales as a percentage of revenues will start to decline, as we get the benefits of the cross-sell opportunities that our strategy is intended to realize. So, we should be able to sell customers with between brands, thus reducing your net CPAs per customer.
Michael Kupinski: And you mentioned that your burn rates about a million a month, right. And so can you just talk a little bit about your balance sheet at this point to support that growth, the growth that you anticipate, the capital expenditures, if you can kind of give us some sense of what you're expecting to spend as you go into fiscal 2022? Just kind of give us some thoughts in terms of the capital and capital allocation at this point?
Dan Marks: Yes, in the past, we've got various routes to raising capital that Grant has alluded to earlier in the presentation. Our balance sheet as of today, around $2.5 million and we're burning about a million a month, but we do have routes to additional capital that Grant has alluded to. We've shown that in the past you can read that and we are comfortable that we can do that going forward.
Michael Kupinski: Got you. That's all I have. Thanks, guys.
Operator: Thank you. And we'll go next to Scott Buck of H.C. Wainwright.
Scott Buck: Good afternoon, guys. It looks like gross margins picked up a couple 100 basis points this quarter versus last. How should we be thinking about the longer-term growth margin opportunity? Are we close to a ceiling there based on future revenue mix? Or is there still some extra room to expand?
Dan Marks: So the expectation is that with being in large group, certainly on the iGaming side, we should start being able to realize cost efficiencies. And by that I mean, dealing with payment providers, casino games providers. We should be able to be negotiate better deals, because of the large volumes that we're currently -- the large group we will have. So we're 59% in Q4, up from 57% in Q3. I still think there's a couple of basis points at least improvement in that gross margin, as opposed to progress. And obviously, we'll keep reporting on that as time goes on.
Scott Buck: Great, Dan, appreciate that color. And second, 2021 was obviously a busy year in terms of M&A. How should we think about ‘22? Are you guys going to take a breather here and digest? Or, will you continue to be active in the marketplace?
Grant Johnson: Yeah, I'll jump in there Dan. At this point in time, we're taking a breather to use your phrase, getting the various assets we have integrated with each other and gain those frequencies through that integration. That doesn't mean that we're completely out of the market. We keep our eyes open, we get opportunities to come our way frequently. And if there is a unique opportunity that will substantially enhance the shareholder value, or give us another strategic advantage, we would consider. But for now, we are, again, taking a pause to consolidate what we currently have.
Scott Buck: Nope, that makes sense. Appreciate it, Grant and appreciate the time today, guys. Thanks a lot.
Grant Johnson: Thank you.
Operator: We'll go to our next question from Mike Hickey of Benchmark Company.
Mike Hickey: Hey Grant, Dan, Jeff, hope you guys are good. Congrats on the quarter. I guess you could take a step back, could you just sort of remind us what you're thinking about in terms of TAM on eSports in the U.S.? It looks like you're starting to accelerate some licensing opportunities. It seems like your team has had some success there with market access. Can you sort of double click on that, and maybe sort of how that changes or enhances your perspective, that opportunity sports betting in the next few years or so. Thanks, guys.
Grant Johnson: Sure, actually, I'm going to call on Jeff to come in, because he's focused on the research specifically to that. Jeff, you want to pick up on the addressable market for the gaming and iGaming combined? Well, it doesn't look like Jeff is on the phone. On the iGaming side, I mean, we’ve got our addressable market, which is the more mature market, of course. It's you're in the $150 billion $160 billion and growing. Esports and gaming is obviously still evolving, is evolving quickly, depending which numbers you're looking at, it'll range anywhere from ‘16 to the mid-20s. What we're finding with these affiliations with the proteins, it's really getting this -- these are super affiliates effectively. So that market is more on the gamer as opposed to the esports fan, which eSports is a specific subcategory, so the addressable market there. It's a little early for us to comment on those, because we need to get a quarter or so under our belt. But the total addressable market between eSports and iGaming because we have footprint and both where it makes us a bit unique and getting access to both those, so our addressable market is closer to $170 billion to $180 billion versus if we were just focused on the much smaller and emerging eSports market, when it does. So we'll update when we get a quarter of the gaming with pro teams, we will update you I would think end of first quarter next calendar year or our Q3.
Mike Hickey: Thanks, Grant. Just curious on FanDuel where you guys are with that and how you think about the in home opportunity. Thank you.
Grant Johnson: Yeah, the software right now is complete, it’s in. We're just waiting for the final approval so that we can proceed. We expect getting the final approval to hold our inaugural event in Atlantic City this fall.
Mike Hickey: Awesome. Thanks, guys.
Grant Johnson: Thank you.
Operator: And we'll move on to our next question from Lisa Springer of Singular Research.
Lisa Springer: Good afternoon. I wanted to -- I wonder if you could give us more color around your partnership with the Indian Gaming Association and bringing eSports technology to Indian casinos and how that's going to roll out?
Grant Johnson: Sure, IGEA, which is Ernie Stevens, the third, as you're probably aware, Ernie Stevens Jr. is chairman of NIGA. Ernie is his son, the initiative is to bring eSports gaming opportunities to Native communities. This will be the focus of bringing that in will be generally through the Indian casino facilities. We’re inviting -- we're presenting shortly in the East Coast gaming Conference of the being number of the NIGA members invited as our guests to see the rollout of the LANduel product, but really is to give the opportunity to the various gamers in the native community for debating amongst themselves and the pathway through is going to be working with the casinos. So, I would say that our strategy there was to partner with the largest possible group we could in the sector. As you know, NIGA represents about 50% of the U.S. gambling market. So we feel we have the best partner in the biggest sector of the market. That's the strategy.
Lisa Springer: Okay. Thank you.
Grant Johnson: You’re welcome.
Operator: And we’ll go to a follow-up question from Michael Kupinski of Noble Capital Markets.
Michael Kupinski: Thank you. Thanks for taking another question. A quick question, you mentioned the cross-selling opportunities in gaming and possible cost synergies. I was just wondering if you could just add a little color on that if you can put maybe some what you think might be dollar figures around both what might be revenue synergies as well as the cost synergies?
Grant Johnson: Dan?
Dan Marks: Yeah, I can certainly provide the high level explanation on this. So we have brands or casino brands of sports brands, we pay CPA to get a customer onto our casino on one of our brands, we can then cross-sell them into a sports brand and obviously save ourselves to be $300, $400 commission, it would cost otherwise, if we're paying too much acquire a brand new customer and to that brand. So, with BetHard coming on board, we now have access to several new countries, several new licenses. And we are able to move and sell customers between sportsbook, eSports casino and save ourselves the CPA. I can't give you at this stage specifics around the expected upside from those synergies. I can certainly work on something separately in the coming weeks and provide that to you. But we certainly see it as a material upside and opportunity for us as the year progresses. And, once we fully integrated all of these operators within the overall group.
Michael Kupinski: Yeah, it seems like there would be a fair amount of upside there. So that's the reason why I asked the question. That's all I have. Thank you.
Grant Johnson: Thank you.
Operator: That concludes today's question-and-answer session. I’ll now turn the conference back to our presenters for any additional or closing comments.
Grant Johnson: Thank you. And thank you for the questions. And everybody, thank you for spending the time with us. As we continue to execute our plan, as you can clearly see by the numbers, it's been a time of exciting radical growth. To quote one of the comments, we're at this point in time, focused on getting efficiencies out of the acquisitions we've made. I appreciate support from our shareholders. We will continue to do our best to provide the most value to our shareholders. And as I said myself, I am a shareholder, so my objectives are in direct lockstep with all of you on the phone today. So again, thank you for your support. Thank you for coming to listen to our earnings call.
Operator: This concludes today's call. Thank you for your participation. You may now disconnect.
