FansUnite Entertainment looks to 2021 as break-out year

For Scott Burton, CEO of FansUnite Entertainment Inc (CSE:FANS) (OTCQB:FUNFF) (FRA:4UY), 2021 is shaping up to be a break-out year for the sports and entertainment company that produces technology for the online gaming and esports industries. In fact, in the first quarter of the year, the company achieved a new milestone to underscore what’s in store going forward: Betting volume hit a record C$28.3 million as its McBookie Limited sportsbook and casino business in Scotland realized a record gross gaming revenue of C$982,000, a 136% year-over-year increase.  McBookie also had over 1,000 unique customers on the casino alone, as well as 23,000 bets placed in a single week on the sportsbook -- the highest number of wagers in a week since its inception in 2009.  “The first quarter of 2021 represents a key inflection point for us as we continue to hit new milestones,” Burton said.  While acknowledging that McBookie produces the biggest chunk of its revenue, for now, he said the company plans to expand its B2B operations: ”As we push out more B2B and sign more partners, we will grow more and that will come from licensing." McBookie is just one of three legs underpinning FansUnite’s business model, with the other two comprising its B2B (offering betting features and software to existing casino operators), and Askott Games -- its standalone video game-themed betting games (eSports). Both operations derive revenue from licensing fees.  Focus now on eSports But the company now is focusing its energies on the fast-growing world of eSports, a move that has a dual purpose. “It's random number generated games, but they just have video game themes. So you're not playing a video game, you're still playing a game of pure chance,” Burton explained. “We have a full platform for eSports betting, so people can bet on professional video game leagues, tournaments and events. Once we get them into the site, we give them these casino options. If you're getting that 18- to 30-year-old to bet, you need the content that will get them over to the casino.” Meanwhile, FansUnite has won B2B and B2C gaming licenses in Malta, which opens up several EU jurisdictions. Also, it has applied for critical UK gambling licenses, which would enable the company to deploy its B2B gaming solutions to betting operators and launch B2C wagering platforms in the leading UK online gambling market.  “So that just now means we can go and do a lot more deals, whether that be B2B, signing more partnerships with people who want to operate in those jurisdictions,” he said. “Or if we want to launch any of our own brands, we can do that. We had to get all the stuff in place to get those licenses to be able to actually do the business. So those are done. That's a huge milestone that we passed.” Expanding North American operations While FansUnite seeks to expand its European footprint, the company is now shifting attention to the North American market.  “We're starting to focus on North America, which last year wasn't really anything we were working on,” he said. “But now we're seeing opportunities in the US and possibly Canada.”  In the US, he said the company plans to do just software licensing deals through partnerships, noting that branding products can be expensive amid dealing with 50 individual states with differing and contradictory gambling laws.    “There's lots of growth still to come in the US. But again, being state by state is a challenge. So that's why for us last year, we weren't really spending much time on it. But then we kind of got pulled into the US. But I do think that on the B2B side, North America presents some really big opportunities in the next 18 to 24 months.” As for Canada, Burton sees the recent passage of legislation to legalize betting on individual sporting events as encouraging but it won’t affect the company in the short run -- until it gets approval to market its software in the provinces. Right now, unlicensed offshore operators are filling the void.  “If there are provinces right now that don't have any online sports books, you know, that's an opportunity for us to be there with our software,” he said. Possible acquisition target? Meanwhile, FansUnite is not only making moves to expand operations but is preparing itself as a possible acquisition target.   “I think it's a very real potential that there's somebody who's either in the space right now or wants to be in the space that wants to own their technology,” Burton said. “It's taken us quite a number of years to get it to where we are. You need to have your risk management systems in place, your trading tools in place your geo fencing so we can block at a state or provincial level. All that -- your age identity, location verification systems, your ability to deploy the software on remote servers to satisfy local requirements -- all those things take time.” The company also has been discussing plans to uplist to the NASDAQ to help support its growth. But nonetheless, the debt-free company is well capitalized with $14 million along with another $8 million to $9 million in untapped warrants. “We have a lot of runway,” he said.  Looking ahead to the rest of 2021 and beyond, Burton said FansUnite’s strategy for growth includes forging more partnerships and perhaps doing some acquiring of its own.  “The strategy is lots of new deals to sign. We want to really ramp up people on the platform,” he said. “With that, will come good revenue growth. So growing revenue, ramping partners, and then hopefully, getting another couple of acquisitions done.” Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham