Catena Media CEO defends decision to sell AskGamblers to GiG
Michael Daly questioned over strong growth for portal since sale as he hints grey market exposure was a defining factor in the divestment
Catena Media CEO Michael Daly has defended the firm’s decision to sell its flagship AskGamblers brand to Gaming Innovation Group (GiG).
The affiliate sold the brand to GiG in December 2022 for €45m, with the divestment making up part of the firm’s wider strategic review of the business.
That strategic review concluded yesterday, 21 November, with the sale of Catena Media’s Italian assets, with the capital being used to reduce debt and refocus operations in the US.
Since being acquired by GiG, AskGamblers has seen its revenue increase, leading to questions for Daly during Catena’s post-Q3 2023 analyst call.
According to GiG’s Q3 report, the AskGamblers brand has seen player intake and revenue up by around 45% compared to February 2023.
GiG also noted there was a “strong increase” in EBITDA, while a migration of the brand to GiG’s proprietary tech is scheduled for the end of the year.
The CEO defended the decision to sanction the sale and highlighted previous concerns over black and grey market operations for the brand.
Daly said: “When we had AskGamblers, we were continually being sent letters from countries that said our operations were targeting those countries, and we were turning them off. The percentage that we went down, if you went back up, there would have been significant growth if you target those markets.
“The challenge we had was if we did that, we would have to probably consider splitting the company into two companies; one that focused on regulated markets and one that focused on grey or even black markets.”
Daly said the decision not to divide Catena Media into two was made over concerns about damaging the reputation of its shareholders, which ultimately drove the business to put the brand up for sale.
The CEO then moved to comment on GiG’s approach to the AskGamblers brand, suggesting the adoption of a different strategy to Catena’s.
He said: “They are doing a different strategy than we were able to do with our focus on regulated markets, which we believe to be sustainable and also would not jeopardise the licences in those sustained and regulated markets.”
Daly concluded the call by saying the divestment the company has undergone over the last 18 months has put it in a much stronger financial position moving forward.
He remarked: “The strategic review laid out a plan. We are executing that plan. It is a difficult one with the transitions to revenue share with the divestment of various assets to put us in a stronger financial position.
“Some were underperforming assets, some were assets that were in decent markets and decent performance, but it was about balancing focus versus expansion across the globe.
“We expect good things in the coming quarters as we those activities underway as well as a very large launch cycle ahead in the North American marketplace,” Daly added.