Irish-based online gambling services provider GAN has proposed an equity subscription of £7.5m to US investors, in what is reportedly the start of a process to diversify its business into US sports betting.
The decision follows the US Supreme Court’s ruling to overturn the federal ban on sports betting, opening up a new market that businesses from all corners of the gambling industry are now competing to exploit.
Not seeking to be left behind, GAN has confirmed that it is looking to raise the additional funds in order to improve its current offering to its US clients to expand their services and take advantage of the new regulation.
The company’s major US clients such as WinStar.com overseas internet casino and GAN’s offices in Sofia would see additional funds to their software engineering resources. These improved resources will then be used to deal with an anticipated increased demand for services.
Of these funds $2,683,096 of the proposed subscription will then go towards repaying the businesess current convertible unsecured loan notes as GAN plans on strengthening its balance sheet.
This decision reflects part of the company’s ongoing strategy, which is expansion focused with a view that a strong balance sheet will allow for future growth in the US markets.
Speaking about the subscription Dermot Smurfit, CEO of GAN commented:“This strategic capital raising exercise positions GAN to consolidate its US market position and capture substantial incremental revenue opportunities available resulting from both Internet gaming and sports betting regulation in New Jersey, Pennsylvania and other US States expected to regulate Internet gambling in the near future.”
However, the proposed equity subscription first requires approval by shareholders, which will be discussed during GAN’s next General Meeting (GM), and ‘upon admission of the subscription shares to trading on AIM and the ESM’.
Upon completion of the subscription, GAN’s enlarged issued share capital will consist of 85,051,924 ordinary shares.