2020 proved to be an exciting year for FansUnite Entertainment Inc. (FANS: CSE; FUNFF: OTCQB) as the company rode a winning streak of good news that helped drive a dramatic fourth quarter share price surge. As highlighted in our Nov. 30th article—“Fans Unite Dramatic Share Price, Significant Trading Volume Increases”—the rally was spurred by a confluence of industry and company specific news combined with an influx of institutional buying. The streak continues as shares of FANS hit an all-time high of CAD $2.37 on Feb. 19th and are currently trading at about CAD $1.93.
A software and technology company that serves the online gaming and gambling markets, FANS’ recent success is partially driven by a surge of world-wide interest in online gambling. More importantly, the company is quickly making global inroads that are expanding the reach of its B2B, B2C and Askott Games products. This global reach should continue to expand as FANS leverages their partnerships, licenses, and full weight of their board of directors on a world-wide scale.
Consider the inroads the team has already established in the short time they have been public. In North America FANS has:
- Merged with leading B2B software provider Askott Entertainment to create one of Canada’s leading fully integrated online gambling companies.
- Established a Partnership with Las Vegas-based GameCo LLC that will introduce the Askott platform to the newly expanding state-centric U.S. gambling market.
- Announced the first eSports sportsbook in the U.S. through GameCo’s partnership with U.S. Bookmaking and Sky Ute Casino. The deal gives FANS first-mover advantage in the U.S. eSports betting market.
- Established a Partnership with compliance and licensing solution company, OneComply Inc., which will aid FANS in further penetrating the U.S. market.
- Joined the Canadian Gaming Association, ensuring that FANS holds a position on its home turf if the country opens online gambling operations to private entities – which is promising given the Feb 18th advancement of Bill C-218 passing at 303-15 in favor.
- Completed an oversubscribed brokered private placement which saw the company double their initial fundraising expectations and close over $13M CAD.
- Uplisted its trading shares to the OTCQB Venture Market, a move that exposed the company to a much broader range of investors, including U.S. institutions.
The above initiatives are strengthened by board members Chris Grove and James Keane. Chris is a nationally recognized gambling industry expert with extensive experience on market and policy forecasting for the legal U.S. sports betting and online gambling sectors. James is a founding team member of ParadisePoker and helped grow the platform into one of the top online poker sites in the world. Combined, the two men have more than 35 years of experience with all elements of legal gambling in North America and their career trajectories have introduced them to most of the industry’s North American leaders.
FANS Global Presence Continues to Grow
In Europe FansUnite already has a strong U.K. presence through its ownership of Scottish-licensed online casino and sportsbook McBookie. Other European initiatives recently conducted include:
- A deal with online casino aggregator, The EAR, to distribute Askott’s proprietary Random Number Generated games to more than 120 European online gaming sites.
- Secured gaming service and supply licenses from the Malta Gaming Authority, which allows the company to now offer the full spectrum of online gambling services in Europe.
FANS recently entered the South American market with the launch of VamosGG on its Chameleon platform. VamosGG is an eSports, PVP streaming, eSports fantasy and iGaming platform. Inroads into the Asian market appear to be near, as the company has been actively seeking deals in the region. And any Asian initiatives could be supported by board member Harish Ramachandran, the former president of PaddyPower Betfair’s—one of the world’s largest gaming companies—Asian operations.
FansUnite’s management team has members with distinct experience in all regions of the world. This allows the company to capitalize worldwide wherever opportunity presents itself. And, as a software provider, successful inroads can scale rapidly. To see how FANS’ business model works, we dissect how the company will move forward in 2021 with its B2C, B2B and Askott games initiatives.
FANS B2C Initiatives Drive Near Term Growth
FANS’ McBookie acquisition provides the clearest evidence that this management team knows what it’s doing. McBookie is an online sports betting and casino platform licensed to provide betting services in Scotland. Within a couple of months of the acquisition in May 2020 revenues started surging even with the suspension of league football play due to the COVID-19 pandemic. Much of this is credited to operational savvy on the part of the team. With sports largely shut off the seasoned operators at McBookie were ables to pivot and launch casino style games to potentially augment any material revenue loss. What’s more impress is that when league play resumed in August revenues saw an even heftier rise culminating in October with year-over-year increase in monthly revenues of CAD $602,000—the highest ever recorded in the company’s 10 year history. Year-over-year monthly revenue gains topped 400% in July, August, and October.
While FANS is boosting revenues with new offerings on the platform, the company should also benefit in the coming year from Scotland making the EUFA Euros Finals for the first time in decades.
Management believes that it can and will double McBookie’s impressive 2020 revenues again in 2021.
VamosGG was recently launched in Brazil on FANS’ chameleon platform. A Latin American-focused brand, the recent launch showcases the company’s ability to quickly develop an exciting brand to penetrate underserved markets. VamosGG allows users to bet on eSports, PVP streaming, eSports fantasy, and other games. The company is actively promoting the brand and expects to announce some key partnerships early this year.
Brazil, has the third highest number of eSports fans in the world after the U.S. and China. The number of Brazilian eSports enthusiasts was projected to hit more than 12 million in 2021, doubling the number of fans in three short years. Little doubt that many of these might take an active interest in betting on their favorite games.
FANS B2B Initiatives Drive Mid-Long Term Revenue Growth
While B2C moves have been getting all the press of late, FANS’ B2B offerings will play a key role in revenue generation growth over the longer term. The company’s award-winning Chameleon iGaming platform provides online gambling and gaming companies with a complete sports and eSports white label iGaming solution. Offered as a turn-key solution, it is one of the most flexible gaming platforms available.
FANS’ B2B penetration is in the early days and has thus far been driven primarily by word of mouth and networking. Existing partnerships and those in the pipeline are all inbound. With more than CAD $15 million in the bank, the company is building a team to start an outbound marketing strategy to further push their B2B Chameleon solutions.
The company’s licensing strategy is multifaceted in that it allows the company to offer B2C and B2B for licensed operators. FANS can also offer a full turn-key solution as a B2B service for a non-licensed platform. Under the latter scenario, FANS can help a non-licensed platform with an existing user base introduce online betting to its existing customers. This could be quite appealing for companies that want to offer online betting and sportsbooks to their existing customer base, but don’t want to go through the bureaucratic hassle and cost of licensing. FANS provides the licensing as part of the partnership. This white label solution can be tailor-made to offer distinct services or serve as a full turnkey solution. Again, FANS agility allows them to capitalize whereever an opportunity presents itself.
As software, any new deals and/or partnerships will scale almost instantly with little operating expense. Profit sharing from such deals represents the company’s blue sky potential with the promise of future significant recurring monthly revenue streams, much of which will drop to the bottom line. Given the broad global reach of FANS management team, we expect that the company will prove successful in signing new deals in the months and years ahead.
Askott Games Subsidiary a Wild-Card in Revenue Projections
FANS’ wholly owned Askott Games’ offerings represent a wild card in FANS’ potential business growth. Financial success here depends upon how popular the games become with the players. If even one game surges in popularity this wild card becomes the fourth ace of an already strong hand. Two Askott games are already getting exposure in more than 120 online casinos in Europe through the deal with aggregator The EAR. Under the revenue sharing deal, if one of these games surges in popularity it could drop some serious coins into the company’s revenue stream.
The company is working on having at least 10 games ready for distribution by the end of 2021. Askott Games is primarily targeting the Millennial generation market with interactive video-game style casino games. This large and growing market in online gambling is finicky about what games they play. Online gambling company leaders consider a game that can strongly appeal to Millennials as the Holy Grail of today’s online gambling business.
FANS plans to start negotiating with larger aggregators when the game stockpile hits four or five, which is expected in the second quarter. Once in the hands of larger aggregators Askott’s interactive, video-game themed casino games could be spread on thousands of gambling platforms around the world.
Resources to Learn More About FansUnite
If you’re reading about Fans for the first time here, it’s imperative that you check out demos of their interactive casino games and the Chameleon technology. They are definitively impressive. You can find demos in our “FansUnite Poised to Become a Winning Investment in the Online Gambling Sector” article or via the Askott Games website, here and here. It truly is game-changing technology with interactive slot machine-like games and real-time stream betting on live events such as eSports (and the possibility of real sports).
FANS is a small cap worth keeping a close eye on as they execute their strategy throughout the coming year. Follow them on Twitter, sign up for their mailing list, and keep it on your watch list to stay up to date.
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