A month after the forced replacement of its CEO, gaming equipment developer GameCo announced a new round of financing and strategic investment, which includes funding from a hedge fund headed by gaming industry insider Jason Ader and technology provider Playtech.
The amount of financing was not revealed but the Las Vegas-based company said in a statement Tuesday the funds will be used on the development of skill-based gaming machines, igaming products, and a venture into esports betting.
“There are very few market segments which are completely global, totally consumer-facing and instantly scalable,” Ader, CEO of Spring Owl Investment, said in a statement. “The intersection of skill and gambling online is rapidly emerging as a massive opportunity, and GameCo is uniquely positioned as one of the most innovative players in the industry.”
Last week, GameCo named Adam Rosenberg as CEO, replacing company founder Blake Graboyes, who left the business at the end of February after the Nevada Gaming Commission deemed him unsuitable and denied an extension to his gaming license.
Rosenberg, who has been a board observer for GameCo since 2018, will leave his position with Fortress Investment Group. The company first invested in GameCo in 2018.
GameCo currently offers casinos five slot machine games that have a skill-based component where players can win additional jackpots. The company has 16 games currently in the field – four slot machines at Choctaw Durant Casino in Oklahoma and 12 in Nevada, divided between the Atlantis in Reno, and the Park MGM and MGM Grand in Las Vegas. GameCo employs 31 people, primarily at its Las Vegas headquarters.
In addition to the capital raise, GameCo entered into a distribution agreement with Playtech to commercialize the company igaming products globally. GameCo will also have access to Playtech’s network of online casino brands, which will bring the company’s arcade-style gaming to new customers. GameCo will have direct access to building igaming products on Playtech’s platform as a service system.
GameCo is licensed in more than 30 jurisdictions globally including New Jersey, which currently the largest igaming market in the U.S.
Playtech CEO Mor Weizer said in a statement GameCo’s move igaming was well-timed.
“We have followed GameCo’s progress for some time and have been very impressed with its innovative and creative content,” Weizer said. “GameCo’s expansion into digital markets comes during a period of great industry growth and potential.”
Rosenberg said the COVID-19 pandemic, which forced nearly 1,000 casinos in 43 states to close at times during 2020 and operate under health and safety guidelines and reduced capacity protocols, led GameCo to expand its products into the digital world.
The company launched an igaming arm – iGameCo – last August as a way to capitalize on the online and mobile gaming opportunities, and the potential for esports betting.
“GameCo was founded with the intention of attracting and monetizing younger gamers and gamblers who, unlike older generations, want interactive and varied digital gambling experiences both at casinos and from the comfort of their homes,” Rosenberg said. “COVID-related shutdowns and the need for large portions of the global population to be remote accelerated these trends.”
Rosenberg and GameCo Chairman Robert Montgomery said the company will focus on rapidly expanding into digital markets with a focus on bringing its arcade-style gambling to online casinos worldwide. The distribution relationship with Playtech provides GameCo with access to markets across Europe, Latin America, and North America – including the U.S.
GameCo hopes to position the company as a leader in esports betting in the U.S.
“We continue to see a real opportunity to combine the excitement of mobile apps and video games with the thrill of gambling to capture these customers,” Montgomery said. “We’re thrilled to bring on board new investors like Playtech and Spring Owl, who represent the best-of-the-best in strategic financiers, to help us advance these exciting business initiatives.”
Ader, a former gaming industry investment analyst and board member of Las Vegas Sands Corp. from 2009 to 2016, has been an activist investor involved in a number of gaming and technology companies, including International Game Technology, Bwin, Stars Group, and Playtech.
“I have no doubt that this funding will open many doors for GameCo,” Ader said. “The scaling opportunities in this relatively untapped sector are extremely exciting.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
