The coronavirus outbreak known as COVID-19 has put people worldwide in a state of self-isolation to help prevent the spread of the respiratory infection. While the pandemic has shut down “non-essential” businesses globally, especially those that involve large gatherings of people. Unfortunately for lovers of slot machines, roulette, blackjack and other gambling card games, casinos weren’t deemed essential, so they have been temporarily shuttered.
Those that still want to partake in gambling are turning in droves to online casinos. While casinos will never make up for lost revenues from their front doors being locked at their land-based operations, internet operations provide some high margin revenue to offset the dearth of physical patrons.
To markets like China where online gambling is illegal, it is a wakeup call to the volume of revenue that is being lost to neighbors in Asia where the business has seen a boom because of COVID-19. Another market segment that is benefiting is the technology companies delivering games and services for internet gambling.
Las Vegas-based Golden Matrix Group Inc. (OTCPK:GMGI), a developer and licenser of social gaming platforms, systems and gaming content, is one such company seeing a pop in business. The company has recently licensed it GM-X gaming platform to 24 new gaming operators, with expectations for another 40 to be GM-X licensees by the end of April.
All told, Golden Matrix now has more than 300 operators servicing two million users across all GM-X gaming platforms. The company is primarily focused on the Asia Pacific region as legislation in the U.S. has made online gambling operations byzantine at best.
GMGI CEO Brian Goodman has stated that he doesn’t expect to see any negative impact to Golden Matrix’s business due to the coronavirus outbreak. A seasoned online gaming executive, Goodman recently said that he is not surprised by the heightened interest in the GM-X platform as “[m]ore and more retail casino establishments are beginning to realize that, to be truly competitive in the gaming industry, they must also have a strong online presence.”
Goodman forecasts the new customers to result in “significant” incremental revenue going forward.
The company seems to be building on momentum that was already providing tailwinds to the young company. Under the leadership of Goodman, the company wiped out all toxic convertible debt, posted 8 straight quarters of revenue growth ($308,507 in the quarter ended January 1, 2020) and can boast a net profit in excess of 55%. This trend is expected to continue and likely accelerate.
Golden Matrix has also padded its bank account to nearly $2.0 million, which management says is enough to get through 2020 under its current business plan without raising any addition capital. That is compelling considering the go-forward plan is contemplating making acquisitions expected to be immediately accretive.
Looking ahead, Golden Matrix has its sights set on exiting the OTC markets. To that end, the company is adding independent directors and focusing on satisfying other requirements necessary to uplist to a national or international exchange later this year.
No one is happy about coronavirus and the effect it is having on people and economies all over the world. However, the current environment will likely have a lasting impact on the way people gamble and on government’s keeping online gambling in a headlock.
In Goodman’s words, “the only way for these operators to engage with their millions of users is through digital means. This is what Golden Matrix brings to the table.”
