While people have always loved gambling, the way the industry operates has changed immensely in the last hundred years. Gambling transformed from seedy gaming operators run by crime syndicates to legal and often luxurious establishments run by large corporations.
Now, the internet and mobile revolutions are driving unparalleled innovation in the casino industry!
Casino services suppliers such as Evolution are developing innovative casino games and Las Vegas-like game shows. Whilst online casinos are quickly becoming much larger than the established brick and mortar casino giants.
At the same time, the trend of online casino and sportsbook legalization is continuing. More and more states in South America, Asia, Africa, and the US are implementing some kind of regulatory frameworks.
This creates an opportunity not only for the large and established players, but for smaller upstarts. Capturing market share in fast-growing and quickly legalizing emerging markets could deliver great returns in a relatively short amount of time.
This is exactly the kind of opportunity that Golden Matrix Group Inc. offers!
Golden Matrix (GMGI) was originally mostly a B2B software and services provider to the online casino industry. But over the years, the company has made a series of acquisitions that have transformed it into a $180M full-service iGaming company with a strong online casino presence in the Balkans, Mexico, Brazil, Nigeria, and more.
The company's largest and most important acquisition was finalized last year, when GMGI acquired a Serbian gaming company, MeridianBet, for $330M!
At the time of the deal, GMGI was worth around $80M, so this was essentially a reverse merger with Meridian getting most of the shares in the combined Nasdaq-listed entity.
Today, the combined company is worth only $180M, as US stock investors are clearly skeptical of this deal and the growth strategy in emerging markets. This presents us with a potential opportunity. In a recent interview, the CEO, Brian Goodman, expressed his belief that GMGI is a $1B company in the making.
In this report, I will analyze these claims and provide my determination on whether this stock could be a 5X!
1. Business Model
2. The Opportunity
3. Valuation
4. Conclusion
1. Business Model
GMGI’s business model is actually what piqued my interest in the company, as they offer a unique blend of B2B and B2C gambling services.
Some of you might be familiar with Evolution Gaming, the Swedish provider of gambling software and services to online casinos. Online casinos outsource the boring and tedious tasks, such as live dealing and game development, to Evolution.
Online casinos such as PokerStars, DraftKings, FanDuel, Caesars, and Holland Casino operate the front end, acquiring customers, providing customer service, managing customer funds, and paying out the winnings.
GMGI combines the two ideas!
It provides software services to online casinos whilst at the same time running some online casinos itself. However, while there is some overlap, GMGI doesn’t compete much with Evolution, as their services are a bit different.
Let me explain.