Brian Goodman, CEO of Golden Matrix Group, was recently a guest on Benzinga's All-Access. Golden Matrix Group Inc. is an established gaming technology company that develops and owns online gaming IP and builds configurable and scalable white-label social gaming platforms for its international customers, located in the Asia Pacific region. Golden Matrix showed solid growth in its recent Q2 report.
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00:00Brian, good morning and welcome to the show.
00:07How are you tonight?
00:09I'm doing great. There's so many things for us to talk about.
00:12Your Q2 Sportsnet came out, your opportunities in Brazil.
00:16But just like I did with my previous guest, for the folks that might not be familiar,
00:19give me some insights on what is it that your company does.
00:22So we're a B2B and a B2C gaming company.
00:26Primarily, we're an online gaming company and we operate sportsbooks and online casinos.
00:35We talk about a thing behind the thing. I think this is another example of that as well.
00:39No matter which sportsbook you're at, there's technologies and use cases that you're providing opportunities as well.
00:45Let's talk about your Q2 results and how they kind of demonstrate the operational success of the company.
00:50Give us some highlights from that, please.
00:52I'd love to talk some numbers.
00:55It was our first real quarter as a consolidated company with Meridian, the sportsbook.
01:02Good numbers, 75% growth in revenues, $40 million for the second quarter.
01:10Adjusted EBITDA of over $5 million.
01:14Cash on hand, an incredible $40 million, double last year's figure.
01:22Best of all, our shareholder equity grew 52% to just under $90 million.
01:29There's no wonder you want to talk about numbers because you're looking quite impressive there.
01:34That's what you've done. Let's talk about what you're going to do,
01:37which is why I want to talk about your market opportunity in Brazil.
01:41Tell me a little bit about that.
01:44Obviously, the whole world is very excited about Brazil.
01:48A while ago, there was an expression of interest,
01:51as in there was a list of people that made an expression of interest and were allowed to continue
01:56or to start up a gaming operation in Brazil.
01:59We were part of that list, and it's a multifaceted approval process.
02:05It's going through a procedure.
02:07Yesterday, there was a deadline, and the list was reduced substantially,
02:14and we were on that list as well.
02:16Brazil being probably the third largest gaming market in the world,
02:23and it's different to the U.S. because it's federal.
02:27When you get a license in Brazil, you're going to have the whole country, not just state by state.
02:31It's a huge opportunity.
02:34We're very confident that we will get a license, and we already operate there.
02:41It's a huge opportunity for us, and it will also transform the company.
02:46I'm sure it saves you a lot of fees on lawyers as well, if you get it.
02:50If you get it at the federal level, you don't need to go to jurisdictions independently themselves as well.
02:55I think there was an announcement about an acquisition that you made of an indirect majority stake in Classics for a Cause,
03:04which my understanding is a leading independent online discount platform in Australia.
03:08We're still talking about overseas.
03:10Tell me about this and why it makes sense to the bottom line of your business with Golden Matrix Group.
03:16In our history, one of our first acquisitions was a company called Arkings Competitions.
03:25It's a raffle ticket type business.
03:27It operates in the U.K.
03:29Initially, before we made the Meridian acquisition, it accounted in a short period of time for more than 50% of our revenues
03:37and 50% of our profits.
03:39In simple terms, it's a raffle ticket business where you sell tickets to win high-end prizes.
03:46You buy tickets.
03:48You can win a Ferrari or whatever.
03:51It's a large business, and it's performed really well.
03:56This business we've just acquired is a very similar business, and because of our success with the previous business,
04:04we are obviously very confident that we can build this out.
04:08It's already very profitable.
04:11It has revenues of just over $10 million and profits of just over $2 million,
04:22and we believe that our technology and our expertise in this part of the world will grow substantially.
04:30We bought it at a fairly low multiple of five times multiple of profits, and we're very excited about it.
04:38It'll be a good addition to our suite of products.
04:42You're expanding.
04:44You have money that you're investing as well.
04:46I want to go back to your B2B and B2C model.
04:49I would assume that you might face some challenges because you're trying to be great at both things, right?
04:55But I'm sure you have a team that's great at executing it or else you wouldn't go down this path.
04:59What are the benefits, though, of operating a dual B2B and B2C model as well in this business?
05:05I guess we don't have a lot of time to discuss the strategy, but actually it's the diversity of the company.
05:12In some instances when we enter a market like Brazil, you need, in fact, in some countries it's required that you have a partner on the ground
05:21that is operating and either has a license or has experience.
05:28In these instances, what we do is we partner with somebody.
05:33We offer potentially like a franchise model where we can get them our technology, get them up and going.
05:39They operate potentially under our brand.
05:42Once they're going, we can acquire them or acquire the majority interest in them.
05:47Having a B2B capability also very important for us right now is that we're going through the New Jersey license procedure.
05:56Once it's approved, we will offer up our games.
05:59It's a studio called Expand Studios, very successful game studio.
06:03We'll offer our games to operators within the U.S.
06:07We'll have our games distributed through large operators and that's a B2B model.
06:12It allows us to enter markets in different ways.
06:16But in terms of diversity, the company is diverse in its products, all gaming related,
06:23but also in terms of the countries it operates in.
06:26We're not really reliant on any one country in particular.
06:30There's always risks in terms of taxes and things like that.
06:35We're diverse on both fronts.
06:37With the diversification, you come to the U.S., basketball and football, I would assume, are the big sports to bet on.
06:45You go to Canada, I think that changes to say hockey.
06:48You go to Brazil or Argentina, I would assume soccer takes over.
06:52What I'm saying is, depending on what country you go to, different things are popular, different things work.
06:57So how are you able to differentiate which products best work with what country and jurisdiction
07:03to make sure that your efforts are amplified and you're getting the best bang for your buck,
07:07both on the business side, but also for the consumers as well, so you're able to do a model.
07:13Yes, I mean, we offer the full gamut of all of those products, cricket included,
07:18which is one of the largest followed sports in the world and probably the most money bet on sports.
07:26We offer all of these, but obviously emphasize the different sports in the different countries.
07:31Our technology comes into play, which is very important.
07:36Most people don't realize that running a sports book requires very, very sophisticated technology.
07:42It takes in feeds from different feed providers.
07:45And then what it does, it calculates results and it puts up bets.
07:51And in order to do it efficiently and competitively, you need the best technology.
07:58And we believe we have that.
08:00How dare I forget cricket? I feel like my parents taxed me.
08:05I know, especially when you just had the T20 World Cup that took place.
08:11Earlier today on the show, I was talking to our viewers about the prediction markets
08:15and how that's taken off, and there's never been more of an opportunity than today
08:19to donate to Las Vegas and everyone else our hard-earned money as well.
08:24Well, look, congrats on the Q2 results.
08:26You've got the expansions and market opportunities in Brazil and overseas and everything you're doing.
08:30You've got the dual model of B2B and B2C as well.
08:33Is there anything else that we didn't cover today that you want our viewers to know about?
08:38No, I just think I'd like to close by saying it's a huge investment opportunity that we have here.
08:45And, you know, we have a slogan that says, you can bet on us, is our slogan.
08:50And we've always delivered. We've always been profitable.
08:54We have a long history of positive cash generation.
09:01And so we're not out there burning other people's money.
09:04We're offering good returns to shareholders.
09:07And, you know, I would suggest anybody who's interested, you know, have a look at the company.
09:15We've got one question from the chat, so I hope you don't mind staying with me.
09:17They want me to ask you, you know, what are some tailwinds for the company in the next 6 to 12 months?
09:23We talked about Brazil. We talked about the acquisition as well.
09:26Are there any other things that are happening within the company that you think our viewers should keep an eye on
09:31as you have 6 to 12 months to go?
09:34Yeah, I think those are the two largest, as well as the American opportunity that we discussed.
09:41Entering America is obviously the U.S. is a big, you know, big opportunity for us.
09:47And so all of those, we have other licenses that we've been granted that are underway.
09:52So we're expanding globally. And these are all very valuable opportunities.
09:59It should be a lot of fun. And, you know, the technology behind Sportsbook is so key
10:03because so much information is being fed in, in terms of weather, in terms of injury, in terms of whatever is impacting.
10:10Yeah, it's real time. These bets are being placed in real time.
10:13And we're offering up lines. You can watch a match.
10:15You can bet on who's going to score the next touchdown, who's going to fall over and, you know, hurt himself.
10:21You know, any type of bet that's going, there are hundreds, actually thousands of these lines
10:26that are being produced in real time.
10:28And, you know, we're going to start seeing TVs where you're watching the sport.
10:33And on your TV, not even on your phone, on your TV, you can bet on, hey, what is the next snap going to be in football?
10:39I know a certain someone who bet on if the total score at the end of the first quarter of a basketball game was going to be odd or even.
10:45So, like I said, plenty of ways to invest your money in the sports betting market.
10:50But thank you so much for your time. I really appreciate it, Brian.
10:54Thanks, Annette. Talk to you soon.
10:56Absolutely. You got it. That is Brian Goodman, who is a CEO of Golden Matrix Group.
11:02Check out the ticker on the NASDAQ is GMGI. And we thank you for watching All Access.