Booming NetEnt signs first Penn partner
NetEnt has signed up casino giant Penn as its first partner in Pennsylvania as it announced a Jumanji-inspired boom in Q3.
The games developer's share price was up almost 15% this morning after it reported a 10% rise in revenue to SEK 449m (€43m/$49m) and 11% increase in operating profit to around $19m for the three months to the end of September.
During the quarter - the first full period since Therese Hillman became CEO on a permanent basis - Stockholm-listed NetEnt benefitted from the release of its new game based on hit film Jumanji, launched with British Columbia Lottery Corporation in Canada and Norsk Tipping in Norway, and signed its first customer in Lithuania.
It also began offering its games with Hard Rock’s new website in New Jersey, and today announced it has signed up its first customer for the soon-to-be-live Pennsylvania market. NetEnt’s games will be available on Penn Interactive’s Hollywood Casino website.
“This deal marks NetEnt’s first customer signing for Pennsylvania and is an important step in our growth strategy in North America,” said Erik Nyman, managing director of NetEnt Americas.
NetEnt confirmed last month that it had filed an application with the Pennsylvania Gaming Control Board (PGCB) to provide online table and slot games to operators. Nyman said at the time he hopes NetEnt will be live in Pennsylvania “as soon as the market opens”.
Reflecting on the Q3 results, NetEnt Group CEO Hillman outlined areas of improvement for the company.
“We continue to make efforts to lower overhead costs and to optimise the organisation for commercial drive and increased pace of output, and I see room for improvement next year in several areas,” she said. “Our net cash position provides us with financial flexibility and allows for continued solid cash returns to shareholders.”
While the company could celebrate progress in terms of games releases, new clients and new regions as well as a broadening business mix thanks to its new affiliate programme, analysts greeted its report with caution. Regulus Partners noted that underlying growth "slowed markedly" in key regions such as the Nordics and the UK, and Sweden is of particular concern ahead of the launch of its re-regulated market in January.
"The ‘re-regulation’ - just plain first time domestic regulation for .com operators - of key markets can offer more short to medium-term threats than opportunities for exposed operators as Swedish duty will cost exposed .com casino operators c. €95m in 2019, with the supply chain likely sought as a key mitigator," they wrote.