Navigating transformation: Richard Carter on GiG's new chapter after affiliate split

GiG has recently made waves with the announcement of the spin out of its affiliate arm, Gentoo, to stand alone as a leader in developing proprietary igaming platform and sportsbook technologies. 

In an exclusive interview, EGR sat down with GiG CEO Richard Carter to delve into the strategic motivations behind this move, the opportunities it creates and how it positions both GiG and its investors for future success. 

EGR: What drove the strategic decision behind the spin-out?

Richard Carter (RC): The reason for the spin out was straightforward: it allows GiG to stand on its own and fully realise its potential without any distractions. While the media division, Gentoo Media, has been incredibly successful, the platform side of the business has stood in its shadow and did not have the focus needed to compete in what is a very competitive industry. 

By spinning out, we can focus solely on delivering a top-tier sportsbook and platform service to our customers. We won’t have the distraction of managing a separate business that serves a different vertical. This split should allow both companies to excel independently and therefore help drive faster and deeper shareholder value over the medium term.

EGR: How will being a standalone business help you focus on the core strengths of GiG?

RC: The benefit will be having one strategy, one board and being singly focused. I think what we’ve had historically, from a board perspective, is two very different businesses both competing for airtime and for access to capital. Therefore, by having just one focus, it will allow us to maximise the opportunities that lie ahead. 

We can dedicate all our resources and attention to being a tier-one B2B technology provider. We’re in a much better position to develop our platform without the distractions of another business, which means we can push innovation and service quality further than we have historically.

EGR: What are some of those opportunities you’ll focus on in the medium and long term?

RC: It’s a combination of focusing on what we’ve been doing since the new executive team started. We’ve launched our new X suite of products, with the CoreX Platform, SportX sportsbook and our DataX and LogicX solutions that really provide the secret sauce for our success. 

We have also just recently announced we’re launching a new product vertical in SweepX, a social casino sweepstakes platform. Now we can focus purely on those products, invest in them and look to take as much market share as we can.

EGR: Other than having a single core focus, are there any other operational improvements you expect from the business split?

RC: We’ve made significant improvements to our cost structure this year. Historically, we had a relatively high cost base compared to our revenues, which impacted our bottom line. However, we’ve overhauled this completely. 

Moving forward, we don’t expect significant cost growth year on year, even as we increase revenue. Our current cost base is mature enough to handle double our current revenue without needing substantial additions. As a result, new revenue will largely flow directly to the bottom line, improving profitability.

EGR: Is there any M&A in the pipeline for GiG in the next 12 to 18 months?

RC: M&A will be a strategic consideration and one of the tools in our toolbox now that we are a standalone entity. There is nothing specific we’re looking at right now, but, with the industry increasingly moving towards consolidation, I’m sure within the next 12 to 18 months we will have made some M&A moves.

EGR: By being a standalone business, will you be able to attract either more or different types of investors?

RC: I think there’s no doubt that as a standalone business we’ll definitely have a very different investor base than the previous enlarged group GiG had. And, by attracting those new specialised investors, it will obviously allow us the opportunity to grow the business and take it to the next level.

EGR: What would you say is the core value proposition for investors who choose to back GiG?

RC: I think the core value proposition is that we’re a leading B2B SaaS business with an incredibly large total addressable market. The business has been investing significantly over the last three years and we’re in a position now where we’re turning the corner from a revenue perspective, with very high operational gearing. 

We expect to see very high leverage as we grow. In turn, this will translate to above market profit and cash flow growth, which over time should translate into a higher company valuation and attractive returns for our investors.

Richard Carter joined GiG as CEO for Platform & Sportsbook in September 2023, bringing extensive experience at executive level from within the igaming industry.

His previous C-level roles include CEO of online casino and gaming platform Bragg and CEO of SBTech, where he led the company’s merger with digital sports entertainment and gaming company DraftKings through a three-way deal with Diamond Eagle Acquisition Corp in April 2020.

Before that, Carter served as a director of research at Deutsche Bank, responsible for leading its highly rated Pan-European Gaming Equity Research franchise.