The upcoming edition of G2E Las Vegas, the first fully in-person one since the pandemic, is set to mark a long-awaited return to the golden days of the major convention. Scheduled for October 10-13 at The Venetian Expo, Las Vegas is, once again, set to reunite the global gaming industry at a point of sector recovery. Among companies attending is Inspired Entertainment, one of the expositors at the event.
Less than two weeks away from the show, Yogonet talked with the company’s Chief Operating Officer and President, Brooks Pierce, who not only shared Inspired’s showcase plan for the event but also spoke about the roadmap for the remainder of the year.
What will be the main novelties, products, and solutions that Inspired Entertainment will present and focus on at G2E this year?
We’ll be presenting a diverse portfolio of new iGaming content and our top-performing game portfolio of 200+ titles; new promotional tools; new themes that leverage our Big Bonus and Big Spin Bonus high-performing free spin mechanics; and a strong suite of omni-channel content that allows players to experience proven content in multiple categories.
Key licensed brands like Space invaders will be seen across both iGaming and Gaming products, and in Virtual Sports with licenses from the NFL Alumni Association and Major League Baseball Players Alumni Association. We will be showcasing a new cabinet for our gaming machine business that has been received very positively in our key UK market. We will also be showing some products that have never been seen before, so folks will just have to come to our booth to see them for themselves.
Since the beginning of 2022, Inspired has widened its reach in the United States, taking its content live in Pennsylvania, Connecticut, and Michigan. Could you share some updates on this matter, including feedback, progress, and updates since these launches?
Inspired only entered the North American marketplace in late 2018. Unlike many, we had nothing but room to expand, and that’s what happened for our Gaming, Virtuals, and Interactive businesses — especially our Virtuals and Interactive in the last two years. Given the level of interest in our products and our company, we expect to grow, even more, extending into new US markets and adding new customers.
In North America, our games are currently available in New Jersey, Michigan, Pennsylvania, Connecticut, Ontario, and Quebec. We went live only last quarter with seven operators in Ontario and Rush Street in Pennsylvania, and we expect several additional customer launches in these new jurisdictions before the end of 2022. The growth potential is huge.
Inspired at G2E 2019
In August, the company announced it generated total revenue of $71.3 million in Q2, a 72% increase from the $41.5 million generated in the same period last year, and said that growth was driven by the company’s aggregate online business. How would you assess the company’s overall performance for the first half of the year?
Our online business has gained significant momentum in the last two and a half years, with the company’s Interactive revenues increasing by 180% year over year from 2020 to 2021. In response to demand, we’ve increased games cadence; entered new markets and partnered with new customers; created industry-leading mechanics; expanded our portfolio of Interactive RGS aggregators; and made our games available through direct integration as well.
We are seeing the benefit of all of these steps, particularly in North America, which has quickly grown to be our second biggest market for interactive, with a lot of growth potential still to go. We continue to expand our reach and create great games as the primary focus of this part of the business.
The company’s aggregate online business, which includes the Virtual Sports and Interactive segments, drove most of the growth. What do you attribute this to?
The growth of our interactive businesses, Virtual Sports and iGaming, has been a big driver of our business. They now represent more than 50% of our company’s EBITDA and are growing significantly. We had largely been a retail-based, server-based gaming machine business, and now our business is much more diversified from both a product and geography basis—yet our core strength and focus on content have remained steadfast and drive us every day.
I think that distributed gaming, iGaming, iLottery, and Virtual Sports position us very well for how we think the industry will grow, and we plan to be at the forefront of innovation to help drive that for our customers.
During the first half of the year, we have seen Inspired sign major contracts and extensions with William Hill, Greene King, and Mitchells / Butlers. Moreover, DC Lottery became the second lottery in North America to launch Inspired’s Virtual Sports, both in retail and online. What do these kinds of partnerships represent for Inspired?
The greatest compliment our customers can pay us is a request for more business, so the contract extensions with major players such as William Hill and Greene King are testimony to the value Inspired and our products provide. We are looking forward to building on these partnerships with games that excite their players and keep them coming back.
The Pennsylvania State Lottery was the first major North American lottery to launch our Virtual Sports content, in more than 9,000 retail locations throughout the state, and DC has followed with retail and online. Watching these products succeed, many other US lotteries and casinos have sought us out to talk about launching similar products across their retail, casino, sportsbooks, and interactive platforms.
US providers see our products as an opportunity to expand their player base, as a complementary product to sports betting, and as a way to add fresh content with a dynamic new revenue growth opportunity.
What are your expectations for the remainder of 2022? Do you plan to release any new products for a specific market in the coming months?
We do expect to grow even more over the next several months, but I can’t give you specifics on timing — after all, we’re already in the fourth quarter of the year. We’ll be expanding into new markets in North America, and we see opportunities for our interactive businesses around the world, including expansion into regulated markets in Latin America, Eastern Europe, and the Asia Pacific further down the road. We also believe we still have organic growth opportunities in key markets such as the UK, Greece, Italy, and the Netherlands, and we are designing products specifically for those markets.
