(News Blaze) – Online gaming, a subsector of Hotels, Gaming & Leisure Sector, is fast becoming a reality worldwide and for Golden Matrix Group (OTC: GMGI) it’s proven to be a good bet in its focus on the Asian-Pacific market.
The online gaming subsector is highly competitive without dominant players, notes S&P in a 2019 Industry Survey. Yet its growth is far exceeding brick and mortar casinos. Within the Asian-Pacific market GMGI is standing out, evidenced by six consecutive quarters of growth and earnings. A Cinderella story if there ever was one …
Golden Matrix Group, Inc. reported $1.7 million in net income for the year-ending July 31, 2019 on $2.8 million in sales, which is a far cry from 2016 when the Company was in debt and suffering losses, said GMGI CEO Brian Goodman. “When I became CEO in 2016 the Company was suffering, had no money and losses,” said Goodman in an interview. “Today, it’s just the opposite.”
In that October 23, 2019 news release Goodman was quoted as saying our [results] “clearly demonstrate the acceptance and reputation of GMGI’s powerful state-of-the-art gaming platform and popular gaming content.”
Golden Matrix achieved a 63 percent operating margin in fiscal 2019. Net cash provided by operating activities was $1,451,934 versus $302,716 in fiscal 2018. Cash and cash equivalents of $1,731,095 at year-end 2019 was a 288 percent increase over $446,581 at year-end 2018.
That growth has been fueled by a steady increase in Asian-Pacific gaming operators for GMGI with the Company now boasting 1.5 million registered users and over 150 online gaming operators, as well as more games.
Goodman, a pioneer in online gaming, was one of the original operators in the USA until the government passed the Unlawful Internet Gambling Enforcement Act of 2006. Online sports betting has since been legalized, but each State would be required to approve their own legislation. According to independent industry research firm, GamblingCompliance, the overturn of the ban is estimated to create a legalized sports gambling market worth between $3.1 billion-$5.2 billion. GMGI, for now, is staying out of that game unless online betting loosens its grip to permit sports betting nationwide vs in-state. Instead, Golden Matrix remains focused on the Asia-Pacific market.
Golden Matrix Group Inc. is a technology-driven company that designs and develops social gaming platforms, systems and content, utilizing its fully scalable platform, GMX, while the Company remains focused on games that are familiar to Asians. GMX is also ‘operator and user friendly’ which is unique to how gamblers bet online in Asia, unlike the more complex platforms and systems used across Europe that just aren’t acceptable to Asian gamblers or operators. This has proven to be a distinct advantage, noted Goodman.
“Just imagine if a brick and mortar casino had 100,000 customers show up at once. They can’t manage that,” said Goodman. “But online, they can serve millions simultaneously – for less than it costs for a brick and mortar casino.”
GMGI’s GMX platform tracks registered users, receiving a portion of every bet as a licensing fee from its operators, who are licensed online gaming organizations across the Asia-Pacific market.
The Asia-Pacific market is the largest in the world, according to Standard & Poors. Macau alone generated more than six times that of Las Vegas – $37 billion in 2019 and growing. Fueling that growth has been an increase in per capita income, while in emerging Asia-Pacific markets, internet and mobile penetration has grown dramatically in the last few years.
In China, they can’t go to a casino in Macau and bet with cash. Instead, guests must go to an operator for credit, paying the operator afterward. That gives GMGI’s online gaming a boost across the region, which is user-friendly and convenient with games being offered that Asians are more familiar with. “We’re like a bank, explained Goodman, in that we look after people’s money. People know our platform is reliable, sound and safe.”
While the online gaming subsector is fragmented with no dominant players, GMGI beat out all of its peers in Standard & Poors Hotel, Gaming & Leisure Industry Survey, December 2019 in revenue growth, reporting 215% growth compared to the Sector average of 6.7%. That is a rare event for any microcap stock, regardless of its sector.
With its stellar growth Golden Matrix Group, Inc. may be a walking takeover target. Indeed, on January 22, 2020 GMGI’s Goodman said in a conference call that it was in preliminary talks with a large lottery business 10 to 15X the size of Golden Matrix. Its CEO also noted that it would up list to an Exchange should a merger be completed. Goodman can credit his GMX platform for that interest, though he stated in an interview that it was more the synergy of the combined companies that would benefit shareholders.