When Dermot Smurfit came to Las Vegas in 2010 for his first G2E trade show, the CEO of the UK-based GAN quickly recognized a growth opportunity for his company, which provides software systems for online gaming used by casinos.
Today, GAN is an Irish company with one foot in London and the other in Las Vegas. This year marks the fourth year in a row GAN has exhibited at G2E.
The company went public in London in 2013 and told shareholders and investors that it would expand its business to become an integral part of the internet gaming infrastructure in the U.S. by taking the in-casino experience and transferring it to laptops, tablets and mobile phones.
GAN opened an office in Las Vegas in 2014 and Smurfit packed up and moved his family from London to Southern Nevada in the summer of 2015, because expansion opportunities are for the company are greatest here. The greatest portion of the company’s revenue is now generated from U.S. sources, rather than European, which are in decline except for Italy, Smurfit said. Davy Research, an Irish research and consultancy firm, expects GAN to increase revenue to $11 million in 2016, up from about $9 million in 2015, Smurfit said.
“Vegas is the epicenter of the industry in the U.S. and all casinos and casino management groups make a bi-annual pilgrimage to Las Vegas, so it made perfect sense to base our operations where our clients were coming,” Smurfit said.
Today, the company handles the simulated online gaming for American Casino &Entertainment Properties, owner of the Stratosphere, two Arizona Charlie’s in Las Vegas and Aquarius Casino Resort in Laughlin. Their free internet gaming offerings launched in December of 2015.
GAN is also a part of the burgeoning real-money gaming in New Jersey and is poised to expand its reach when other states adopt online betting.
The company has come a long way from its humble beginnings in 2002, when it was launched in the United Kingdom using money from Irish shareholders, including Smurfit’s family and friends.
Between 2002 and 2007, GAN specialized solely in games of skill for online sports games such as golf and car driving. Gaming companies like Paddy Power and William Hill added such games to their websites to broaden their reach.
GAN realized it could extend its technology platform to casino table games and slots and was able to jump in when the UK Gambling Commission issued licenses to technology companies for the design and development of software for internet gaming in 2007.
GAN built a portfolio of internet gaming content such as roulette, black jack and video poker and basic slots in 2009. In 2010 the company formed its first major partnership with an equipment manufacturer operating in the U.S., Australian slot maker Aristocrat Gaming. The company has since partnered with other major equipment manufacturers and serves 13 major casino operators, amounting 12 percent of the casino industry by revenue, Smurfit said.
In 2012, GAN, in its partnership with Aristocrat, launched a free gaming site for Baltimore-based Maryland Live! Casino — three months before the casino opened its doors.
New Jersey legalized online gaming in 2013 and GAN has partnered with Betfair and Borgata Atlantic City, which has since been taken over by MGM Resorts International. The industry is growing, having reported online gaming revenue of $95 million in its first full year of 2014. That number is expected to increase to just under $200 million this year, up 40 percent from last year, Smurfit said.
New Jersey, Delaware and Nevada are the only states to allow online gaming and Nevada is limited to poker only. The next state moving in that direction is Pennsylvania with disussion behing held in New York, Michigan and California. GAN is already working with PARX Casino and Racing in Pennsylvania.
“The reports from New Jersey have been overwhelmingly positive,” Smurfit said. “It’s a new type of customer that will engage with the bricks and mortar casino and play online. That is incremental revenue for the casino operator. And there is anecdotal evidence that if you launch an internet casino, people come and visit you more often. We think it is not cannibalistic, but we think it’s additive and incremental to an existing bricks and mortar facility.”
Smurfit said he hopes free gaming expands in Nevada, but can’t talk about any ongoing discussions with casinos.
Many are trying to figure things out since they can’t launch real-money internet gaming with the table games and slots that most patrons play.
There’s no indication that Nevada’s regulations will change to that end, he said.
“I think the vast majority of casino operators will do one form of online gaming or another, and they will wait for the laws to catch up and eventually they will do real money internet casino gaming,” Smurfit said.
Anyone walking into the Stratosphere today, will see signs above slot machines advertising the casino’s online gaming presence and the ability to use their rewards card. Players are then eligible for on-property benefits for playing online, Smurfit said.
Most of the people who play these games online – both simulated and for real money — are in their 40s, 50s and 60s, Smurfit said. It makes sense for the major casino companies to start engaging their patrons when they leave the property and go home, Smurfit said. It makes it more likely they’ll go back to visit rather than having them play on a site of one of their competitors.
“The reality is, two thirds of casino patrons leave the casino and they go home and play slots for free on their mobile phone or computer,” Smurfit said. “That is a huge number and casinos have opened up to this reality and said maybe we should be providing this kind of experience that engages with the player when they go off property and leave the casino. It makes them more likely to come back and visit us and spend money inside our casino property the next time they go to a casino property on the Strip.”
GAN has fewer than 10 employees in Las Vegas, most in support and sales. London is the center of its technology and development with 100 employees.
Smurfit said they’re not sure who the competition is. The equipment manufacturers aren’t offering comparable services, with GAN having defined simulated gaming for U.S. casinos, Smurfit said. “We feel we’re way ahead of the pack,” he said.