Elys Game Technology, Corp. (ELYS) Company Business Update and 2023 Earnings Guidance Conference (Transcript)

Elys Game Technology, Corp. (NASDAQ:ELYS) Company Business Update and 2023 Earnings Guidance Conference June 2, 2023 11:00 AM ET

Company Participants

Michele Ciavarella – Executive Chairman

Mark Korb – Head of Corporate Affairs

Stephen Maldonado – U.S. Head of Product Compliance

Operator

Greetings and welcome to Elys Game Technology’s June 2023 Investor Day Video Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Mike Ciavarella. You may begin.

Michele Ciavarella

Thank you, Darrell. Good morning, everyone. Thanks for joining us for the investor conference today to update everybody on the business developments of Elys Game Technology. I know it’s been a bit of time since last time we got in front of the audience. And we’re going to, again, try to pick this up where we left off and start having regular meetings from time-to-time. For today’s conference, we’re going to present a slideshow, go through slide deck, talk a little bit about business updates, and then we’ll open up at the end of the session for question-and-answers.

On the call today from the company is myself, Mike Ciavarella, Executive Chairman. I’ve also got Mark Korb, Head of Corporate Affairs; Stephen Maldonado and [Nathan Ciavarella] on the call.

All right, without further ado, I’ll start presenting and so again, this morning — sorry about this, a little bit flipping through. So as everybody knows, generally speaking through the presentations, we’ll provide certain forward-looking statements. Talking a little bit about things that we intend to do, potentially, et cetera. Please do not place undue reliance on these forward-looking statements and refer to our filings with the Securities and Exchange Commission.

Just again, a quick snapshot for some folks that aren’t familiar with the company. We’re a company in the leisure betting industry, where we don’t have bricks and mortar casino, but we provide services to casino. We also have a B2C channel, where we provide sports betting on both land-based and online channel. So land-based meaning that we will service casinos, will also service land-based locations such as convenience stores, restaurants, and bars. And so our technology provides the software for the product. We also provide our product on a B2C channel online, meaning that players can open up a gaming account and also play sports bets, buy lottery tickets, poker, casino, and so on.

So we are the ones that provide the back end technology and in the Italian market, we are the licensed operator. So we’re the ones that face the customers as well.

So our sources of revenues are two: Number one we are the license operator, as I mentioned. And then as we’ve expanded here into the United States, we started offering on a B2C channel, the betting platform for a variety of customers. Company, recent financials, we generated a handle or sales, if you will, of approximately $770 million in 2022. So we’re approaching the golden number that we’ve been targeting for a couple of years. We’re hoping to reach $1 billion sometime in the near future.

We generate out of that $770 million in sales or handle if you will, approximately $53 million in gross gaming revenue from which we pay approximately $10 million in tax, gaming tax. And that leaves us with $43 million. So $43 million is the total revenue number for 2022. And again, most, 94% of that is from gaming revenues and the balance is from the provision of the technology to a variety of B2B clients.

A couple of key points here about the company and some of the investment thesis that are very important for you as investors to the company. First off, we are an end to end solution in an industry that’s rapidly growing. Sports betting everybody might be familiar has been around for 2,000 years. Clearly, there was a time before the Internet came out where people would play directly with a friend or a bookie. And we provide that service now in an industry that is going more and more towards regulation across the world. Okay?

There’s a number of potential synergies. We’ve already announced a major transaction last year with a significant partner in Lottomatica. Obviously, our platform has been tested by these organizations. So we’ve demonstrated that we have the ability to provide a very competent product for large organizations to use. The technology stack is one of the newest in the world. It’s designed specifically for sports betting. So it provides a much more cost effective way of managing risk, and also much more lightweight, meaning that we have fewer costs and need for fewer traders too, that’s something many of our competitors need to do. So the technology stack fully automated, so it does all the automated trading. And to that extent, we feel that we’re well ahead of the crowd in our industry.

Obviously, as a online provider, we partner up with a number of online casino producers, the poker and that sort of thing. So we have all the API requirements to be able to plug in products that other our customers may desire.

So there’s been some recent developments. I thought we could take this moment here to talk a little bit about what we’ve done as a company. As I mentioned earlier in the presentation, we’ve gone essentially silent for a little bit, while there’s been some turmoil in the market and that sort of thing. So we decided that we took a very prudent approach to how we would structure our company. Everybody is quite familiar with some of the developments in the sports betting industry in terms of many companies are reporting significant cash burns. And that is because of their model that they’ve initiated in the U.S. market, as both the U.S. and Canadian market start to evolve. Unfortunately, we feel that that is really not a very good way to handle this business. So we decided to continue to work on our infrastructure and build and prepare for us to be able to launch in a more cost effective manner. Being — the sports betting is already a tough business as it is. It’s a business that you don’t know your products because you don’t know what the outcome of the game is. If you did, it really wouldn’t be a fair sports bet. But the bottom line is that because the product itself has a volatile nature to it, it’s important to understand how to create your infrastructure, so that this way going forward, your cost of customer acquisition is reasonable. You’re able to generate a good gross margin on your product, and you’re able to produce a product that customers want to come play. Okay? And that is one of the key things.

And to that end, we recently, in January, did an acquisition of a technology organization, a technology group that actually was doing a significant amount of work for us in terms of the development of our platform. And as I mentioned earlier, we’ve platforms both in Italy, so it has to be unique for the European market. And also, we’ve opened up here in North America. So the design has to be unique for a U.S. and Canadian facing customers. So to that end, we felt that the acquisition of Engage IT Services was a valuable transaction that we could extract future value for. So we’ve gone ahead with that closing, and we’ve got that entire team on board, and they’re now — we’re now going through the process of bringing them on, and organizing the entity. We also last year during one of the contracts that we signed with Lottomatica, we acquired 100 land-based rights or licenses, if you will, for 100 land-based locations. So these could be convenient stores, bars, coffee shops, et cetera, speckled throughout the country. And we started to onboard these in Q3 of last year.

We were about halfway through by the end of the year, and we expect over the course of the next say three to six months, but before the end of 2023, we’ll have those — the rest of those licenses launched and open. And that will make a significant difference on our revenue flow, because as you might know from — as a result of COVID, we ended up having to close all of our land-based locations. So we still haven’t completely got those up and running, but that is a process that’s well in progress. We also have moved well ahead on the preparation and the developments for our virtual sports product. That essentially, we’re partnering with Lottomatica also in Italy. Lottomatica is the largest producer or seller of virtual sports. So we’re currently working in collaboration with Lottomatica to certify our product and to make it a leading product for Italy, there as well. And again, that we believe will make a significant impact on our revenue results.

We also moved ahead on our U.S. infrastructure. Everybody is familiar, and these most folks that have been following us are familiar that we’ve expanded from Washington D.C., we now have a presence in — also in New Jersey. We have a plan to now expand into Maryland and Ohio. Each of those projects are also work in progress. To that end, we started this to establish and set up our infrastructure hubs. Meaning, we’ve delivered a set of servers for Ohio. We anticipate there’s the number of plans that we’re going to use. We’re going to use that server hub for not only Ohio, but potential expansion in Canada as well.

And again, we’ve also started to — we’ve also done an installation of servers that — in also other places in the U.S., again, to service not only Maryland but also several of our tribes that we have on the books for business.

We also recently announced the U.S. platform. That is a platform that, again, we — into United States, in Canada, if you will, we haven’t launched Canada yet, but in the U.S. it — what we wanted — what we did differently is we launched our platform on the land-based channel only. Wanted to make sure the proof of concept was right, wanted to make sure that the algorithms worked well. We wanted to understand a little bit better before we rushed into the market. So we wanted to understand a little bit better of how the U.S. players playing and what their demands are from a product perspective. And also wanted to understand better what our competitors were offering. To that end, we now are ready with a U.S. mobile that I think is going to be top-notch. I think it’s going to be competing with some of the biggest operators out there, and we don’t need to repeat who they are. We all know who they are.

So I think that that’s going to be quite significant for our company because what you’re going to find is that the product is going to be exceptional. The players are going to like that product. But the difference is that we’re going to launch that mobile platform in a much more cost effective manner. We think we have a better solution for customer acquisition than many of our competitors.

Clearly, we’re — with the expansion into Maryland and Ohio potentially here, et cetera, we’re doing the expansion on our land-based distribution in the U.S. on a very rapid basis. We expect that by the end of this year the duplication or the scale-up possibilities are quite straightforward. So we’re going to be able to do this in a very cost effective manner.

Also, we’re still moving ahead with many of the licensing update. So, we proceeded with Ohio. We have a number of steps that need to be taking place there. Moving ahead with Maryland. We’re also being very prudent with what the next states are. We’re measuring legislative developments. We’re measuring tax developments. Yesterday, we saw some developments with North Carolina. We saw some developments with Tennessee. Again it’s — I mentioned this last Wednesday at the conference I participated in, is that I think that there’s still going to be a few years before the entire U.S. market starts to stabilize. And tax rates come to a fair number, a more congruous number that we get across the nation, so that this way it’s better to — it’s easier to run business. And the legislation understands that if you run the taxes up too high, players are not going to have a product to be able to buy here. They’re going to have to go back to offshore. So, there has to be some sort of equilibrium that occurs over the course the next two to three years.

So there’s three key subsidiaries. I’ll whip through this part here, and then we’ll get through the process here. So three key subsidiaries to the company. The first one is our core operation, our main pillar, if you will, which is Odissea. Odissea is primarily our technology department, our in-house software development team, IT team, et cetera. We also have a B2C channel in the Italian market. And again, if I could just refresh your memories. If you think about the Italian market, which I’ll talk about in the coming slides, the Italian market for us is like a good test lab. It’s where we’re able to develop our product and understand the behavior of bettors, their demands and so on. And then we take that and with the ecosystem we’ve structured, we take that data and information and we feed that back to our software development teams. And they create the product that the players are demanding. And to that end, that’s the magic formula to the extent of being able to acquire customers in a more cost effective manner, but not only just acquire them, but then find ways to be able to keep them on. Okay? So, customer acquisition, customer retention. So that ecosystem we created is working extremely well. We’re taking those things and we’re moving into the U.S. and Canadian markets, as these markets start to evolve. We — our division here in the United States is Elys Gameboard Technologies. We also last a couple of years ago, we did an acquisition of Bookmakers Company, US Bookmaking, and that gave us a valuable infrastructure that we think that we’re going to be able to extract value going forward. But again, as business as usual, we’re making some adjustments to make sure that, that division is cost effective, and be able to provide value for the company.

Quick snapshots on corporate expansion. We’ve had a good growth strategy. Again, recently, we announced that our focus is going to be to come to the U.S., make sure that we have the product ready and we have the infrastructure. As I mentioned earlier, we now have a pretty solid footprint to get started. That infrastructure that we’re putting out, as I mentioned in the prior slides, is that where we’re now ready in New Mexico, Colorado, and Michigan, North Dakota, New Jersey, and D.C. We also have Maryland coming in online as well. We’re working on that at the moment.

And in terms of our go-to-market strategy, again, we’ve taken sort of all of the lessons learned from our Italian operations. And we basically have optimized the technology, so that it’s not only a cost effective, a good business effective product, but it’s also one that players are demanding. So this way, again, you bring the two together, and that’s where you get your customer acquisition and your customer retention through that process.

Our trajectory looks good for our gross gaming revenue, as I mentioned earlier. I mean, I could back this up a few other years, and you can see we’ve come a long way from doing a $1 million in 2014. So, we brought that up quite significantly. And this — and you could see in 2022, we had a little bit of a dip, but that’s sort of a trailing effect of COVID, because there’s a little chunk missing from the land base, which again, as I mentioned, the 100 rights that we got through Lottomatica in the transaction we did, it should fill that gap going forward.

Coming to the United States, we’ve taken sort of a three-pronged approach coming in here. The first one was we looked at what our competition was doing. And we felt that look, there’s probably much more effective — we can either go lock horns with them and bang our heads and end up like some of the guys that are now having to exit, where we’d be blowing our brains out with spending too much money. But we took an approach where we said, look, let’s start simple. Let’s open in a single location, make sure the technology is working well, make sure the algorithms are working well. And we did that with the Grand Central Restaurant and Bar in D.C. It was hugely successful. We proved that for a very small CapEx we’re able to launch in a small restaurant bar. They’re able to perform extremely well. The numbers speak for themselves and they are public. And now we’re able to replicate that model in a sector of our business that nobody else is competing. Okay?

So again, yes, we need a few years for legislation and regulations to permit sports betting to occur in smaller venues. But what happens in Europe is going to happen here in the United States. I can tell you right now. The bottom-line is we’re going to see advertising bans, we’re going to see responsible gaming coming up and we’re going to also be able to see that the legislators and regulators are going to make it more convenient for players to play sports bet, because the more inconvenient you make it, the more they want to play offshore again, okay?

So we believe that, that was the right choice. We’re now going to expand on that vertical. The other one is, of course, we want to support because the landscape in the United States on casinos is significantly different than many parts of the world, particularly Europe. So we wanted to make sure that we had a good product to be able to, again, scale up into casinos that already have a client base.

So we want to leverage those relationships and provide them a good product. Still a work in progress. We know that we have some areas of improvement. But again, if it was easy, everybody would do it. So it’s something that we’re very proud of that we have a relationship already with a pretty significant casino in Atlantic City and five tribal casinos at the moment.

The big change or the — let’s call it the inflection point here for our company is the mobile platform. Again, we’re going to see two potential deployments of that platform. The one is with our partnership with Lottomatica, which we expect that one to be launching both in Canada and the United States under a certain brand that they have. We will be powering the sports book behind that. Our team, including the Engage acquisition, those guys are working hard and making sure that they have a good product.

And the second one will be sort of an internal where we’ll be developing our own brand to be able to put out this fantastic product that we’ve developed, and we expect that to occur in the second half of 2023 with probably the first one being launched with one of our tribal partners.

Just quickly, there’s just — again, I’ll just go through this as a bit of a repetition over the prior slide. We have three channels of distribution as an entity. The first being the online channel. Our platform is omnichannel, as described. So in other words, we’re able to offer the product on both the web, mobile, et cetera. And we have on the land base, two of those unique verticals, those two unique segments where we’re able to support not only small businesses but also larger land-based locations like casinos. But we have a unique feature in our technology that allows us to create relationships with physical locations where people can, let’s say, manage or control their online account. So we call that sort of a web-shop account reload centers or PVRs.

Wanted to just have a slide in here to just let the audience know because I know sometimes foreign operations don’t generally mean a lot, but I really want to emphasize that why it’s important to consider Elys Game Technology because, number one, we have a very good, solid pillar of operation in one of the toughest markets to operate in. The Italian gaming market is quite robust. It’s one of the largest in Europe. It was one of the first essentially to legalize it in the manner that we’re seeing today in the United States. So for all intents and purposes, Elys Game Technology, we’ve been doing it for about 25 years. We understand sort of the evolution of regulation in tough markets. And then the other sort of advantage that we have as a company is we have — number one, we have great players. I mean the players are smart. They’re all sharp, if you want to put it that way. So we get to compete against the players, and we get to learn what we’re doing right and wrong. And also, we’re competing against some of the biggest operators in the world there. Of course, it’s a very highly competitive market. So we’re not only competing against the players, but we’re also competing against some of the big names. And that makes us that much better. And I think with that sort of a core business, it allows us to be much more effective when it comes to expansion in the United States and Canada.

And that, if you think about it, is really the future here. We’ve got a future expansion opportunity that’s literally as many people have said, it’s still in the early innings. We’re going to see a significant evolution over the next five to 10 years. And the nice thing is we have a lot of those experiences already, okay? So there is a good value for maintaining and continuing to build on our Italian market. So right now, the way the Italian market stands in terms of our placements, our distribution. And again, I just want you to just kind of take a mental snapshot of this slide here. We currently have about 82,000 online user accounts, maybe just a little bit more than that. It fluctuates, as you might know. We have about 2,500 of those web-based locations across the nation in Italy. So the system is very well scalable for that. We have about 109 total locations that are already established, about half of those have to get started. So those are the ones that I mentioned with respect to the rights earlier. And we have two what we call land-based shops or betting shops. You might be familiar with these. If you’ve ever been to London or UK or Italy or any of the European countries where you can go into a betting shop, watch a game and place your bets. So this is a snapshot of what our current distribution is in Italy, and this is what’s generating those revenues that we’re presenting on our financial statements as we speak. Here are some opportunities that we see for the U.S. Again, I’ll kind of whip through this. We’ve done some extensive work in D.C. Again, as I mentioned earlier, it was the process that we chose to do, which is understand the market better, see if we can work directly with the regulators to collaborate on how we can help expansion of the market and how we can assist small businesses getting an opportunity to provide an ancillary product, one that players are going to play, and it also complements their business.

So sports betting and sports really goes hand-in-hand with U.S. and Canadian patrons. Again, our platform is one of the newest ones. We feel that we’re going to be highly competitive in that. So again, keep in mind that much of this has been said, okay? Some couple of opportunities again. We mentioned earlier that the company has got a very scalable product. So we expect 2023 and 2024, so the next 12 to 18 months are going to be key inflections for this company. Everything that we’ve done in the last, let’s say, the last 10 years as a window and then only since PASPA was repealed, which was the prohibitive law that — for sports betting in the United States, it’s only been about five years. We started to talk about this business many years ago, pre-PASPA. Now we — now prior to that, there was no real market for you to be able to develop a product, right? Because there was no industry. It was really offshore or Las Vegas, if you will. So now we’ve been able to refine and understand that market much better. And I think this is going to be really the company to watch going forward. The key being — the key catalyst in my opinion, is that the U.S. mobile launch is going to be quite significant. I think we’re going to be an important competitor out there.

One of the things — a couple of things that we’re going to capitalize on is, number one, there’s a lot of destabilization right now. We got some of the guys that launched heavy in the early years, either exiting the market or finding it very challenging to extract a profit out of that business. So they’re looking at maybe other channels like online casino and poker and talking about iGaming like to be the savior, quite frankly. I think that there’s a — as a result of some of this destabilization, there’s a lack of competent competition. The fact that we were — we’ve honed our business in the Italian market, gives us a really good advantage here, okay? So we’re seeing the temperature come from the players. We’re seeing what’s going on out there and also investors like yourselves are really demanding performance from management. And that’s, I think, why we kind of went silent over the last little bit, where we wanted to make sure that we are honed properly that we want to be able to continue to expand this business in a profitable manner.

This is a bit of a prospective slide. So what — some of our goals for what we expect to occur in the United States as a result of not only the land-based distribution that we’ve already started on, but also what we expect in terms of our U.S. mobile channel. We’re projecting for ourselves a bit of a goal. We want to make sure that we hit at least [750] to 1 million players relatively quickly. We have a unique sort of process where we’ve built — we started to build that database. Now it’s a question of extracting that and converting that database to players, okay? So we’re very well set up in terms of launching our mobile. We currently have about 11 retail locations signed, three are active under our current platform. We still have the five tribes under the older platform or the prior platform that they were using, and we’re expecting within the next, let’s say, three to six months to convert them all over to our land-based platform, okay?

Also, we were very much — how can I say this? We’re very much excited about the opportunity that Ohio presents us. It’s a work in progress, yes, because it just started earlier this year. We saw a lot of entrants, we need to understand where those entrants are going and what’s happening as it relates to the market. So we have signed a number of hosts, many of them wanted to start earlier, give them the opportunity.

So I still believe that we’re going to be able to capture a very significant percentage of that market. But more importantly, we want to do it in a cost-effective manner that is good for the company and good for the hosts and good for the players, okay?

So that brings me to the end of the presentation. On the call today, myself — and Carlo couldn’t join us, unfortunately, because he’s on a different time zone. But you’ve got to meet a few of the people. So with that being said, I’m going to open the conversation to question-and-answer. Darrell, if I can pass it over to you.

Question-and-Answer Session

Operator

[Operator Instructions]

Michele Ciavarella

So thanks, Darrell. I’ve got a few written questions. Let’s see here, I’ll just kind of go through this. So I’ve got some from Scott Buck. Scott Buck is with H.C. Wainwright. Thanks for joining us again, Scott. So in terms of the questions you’ve got here, I’m going to scroll down, appears that you believe U.S. mobile waging over time generate 10x the number of user and time business, just thinking of revenue.

So basically, Scott was asking that we anticipate that the U.S. mobile will likely be 10x larger than our Italian-based model. Is this revenue opportunity in a similar fashion reasonable?

Scott, I’m sorry, I’m not exactly sure I understand the question is the thinking revenue opportunity. So well, yes, I guess let me try to parse this a little bit. Yes, I think the revenue model is quite reasonable simply because what we’ve seen is our performance on — in Italy, on our online channel is lower than our hold on the land-based channel, simply because there’s a different way players play online, players have a much more data and much more information at their fingertips. They are able to — they play with a much higher velocity than a land-based player does, going to the kiosk or going to ticket window and lining up. So we believe that what we’re seeing in the Italian market, we’re going to be able to replicate in the U.S. market from a sort of revenue perspective.

So I hope that answers the question. But yes, I think that if we’re able to continue to expand in the mobile channel like we do and replicate what we do in Italy, I think there’s no reason why we shouldn’t be able to replicate the revenue opportunity that’s here, okay? Will you be using the Elys brand for US B2C mobile wagering platform? The answer to that is no. We’ve got a specialized U.S. brand that we’re going to launch. We’re working on that. We want to keep those cards closer to chess at the moment.

But we obviously are going to be looking at a number of states. The first one is going to be the partnership with our tribal partner in Colorado. So that will have a Sky Ute brand. But other places in the United States where we’ve got sort of a brand that we’re going to launch. And I think it’s going to be a brand that I think is going to be very well adopted by U.S. and Canadian players.

Quickly. You got — actually got three or four questions here. Scott, you cheated. What is the opportunity of additional casino partners?

Look, we believe that there’s going to be a couple of factors in relation to casino partners. Casino partners are, number one, many of them already have a good established relationship. There are some very competent competitors in the land-based channel. But I think we’ve got a bit of work to do in terms of making sure that we’re completely satisfied on our casino product. And then at that point, when the renewals come through, we’re hoping to be able to open up that channel as well, okay?

Do you have the cash necessary?

Well, that’s always sort of a question. I mean the cash — the cash availability is always one that we need to be able to manage. The one thing about our company is because we have — we’re pretty much management-owned. I mean, the managers got their skin in the game here really well, and we’re very well aligned with our investors. So we want to make sure that we’re prudent when it comes to cash management.

We don’t want to go out and raise $100 million when you don’t know — it’s the cost co-effect of having cash. The more toilet paper you have, the more you use. So if you have cash, if we manage it better, I think that we can probably be better off and using it in a more prudent manner. And I think that’s also going to push maybe a little bit of our management skills and being able to have a very clear vision on our ability to make profit. And I think that, that’s going to be able to attract investor interest because they’ll see that management is well aligned with their interest as well. So I hope I answered that question properly.

I’ve got a couple of other questions. David Tan, a quick one. I mean this has been lingering is the stock split coming. Not that I know of. Do you intend to make a re-split of the shares? Not that I know of. Do you think about branding in the U.S., which I just answered.

It’s kind of strolling to some of these. I’ve got a question from chap named Mike. Can you elaborate on how U.S. mobile launch will be able to attract new customers where smaller competitors have failed?

Well, that’s an interesting question because the problem is that smaller competitors never didn’t really fail. I think it’s the bigger guys that really have set the trend in an unsustainable manner. Quite frankly, I think that the bonus and the buying players’ model is going to come to an end. And the difficulty I see is when that comes to an end, those players are going to be looking for the best odds, which is the formula that we understood from our core business in Italy. Players are — yes, they get excited. If you’re going to give them $5,000 or $500 to play on your platforms, sure they’ll take your money. But then as soon as somebody has better odds for the same game, they’re going to go play, they’re going to find that organization.

So I think the smaller the competitors in particular in the first couple of years in the United States understood that, and they were just trying to offer their best possible product. Maybe their product wasn’t at the same level as some of the bigger guys, so they couldn’t compete either by product or by the ability to buy the player. So I think what’s going to happen is the company — like if you look at our company, we’ve sort of established ourselves first. We’re waiting for the next shoe to fall where basically we’re going to attract the players by giving them the best possible odd. So if a player puts a $10 bet, they’re going to be able to play all the different events that all the big guys have. And when they place their $10 bet, they’re going to be able to — if the play wins because, again, we don’t know if their play is going to win. But if their play wins, we’re going to try to offer them the best return on their investment or their bet.

So I think that, that’s how we’re going to be able to attract new customers. And of course, you’re always going to have to keep them with their — not only get them on, recognize the brand. Again, we have a very solid brand in the Italian market. We’re not going to call it [Foreign Language] here because it’s an Italian word, a lot of folks can’t say it. But bottom line is that we feel very good about the brand that we’re going to be launching here. And I think the brand, coupled with the product, coupled with the speed at which our product is going to be moving, I think, is going to be a very — a major differentiator for us to be able to compete.

Another question down here. Let’s see. Do you predict these mobile projects being ready before NFL season?

I guess the answer is, our mobile product is ready to go. It’s a question of the bureaucracies of getting licenses and getting open. But in terms of Lottomatica, they have a very sharp market approach. So we’re supporting them, whatever choices and decisions they make in terms of launch times, we’re going to support. But in terms of Elys’ own app, which is part of this question, we’re going to have our own app. We’re going to go live with one of our existing customers relatively quickly on the online channel. And that gives us a chance to do what we did with the Grand Central Restaurant in Washington, where we made sure the product was right.

We made sure the players like to play with it. In other words, they not only were attracted to it because they signed all the options. And [Brian] is able to keep those players coming back and give them a fair product. And I think that’s what we’d like to do, and I think that, that’s what’s going to happen on the mobile side as well.

All right. I also got a question here from Jack Vander Aarde. Also, Jack is with Maxim. I think I saw Ed from — Roth Ed — and I answered your question, I think, with respect to the branding.

So Jack, your question, land-based handle showed a significant growth rebound Q1 ’23 from those 50-plus activated locations. Yes. But turnover level still remains below pre-pandemic.

Correct. Look, I mean we expect…

Mark Korb

Michele, can I add in there?

Michele Ciavarella

Yes, sure. Mark. Good, yes.

Mark Korb

What everybody doesn’t look at is the currency impact. So if you strip out what happened to the currency, our turnover actually grew. So 2022 over 2021, we grew, and we grew better than the Italian market grew. And in the first quarter of 2023, exactly the same thing happened. We grew our revenue, not by a huge amount, but we grew our revenue in euros by EUR400,000 and that was despite seeing a bit of a downturn in the online, and we picked it all up in the retail channel. So don’t forget about what the currency impact is.

Nobody expected the dollar to strengthen the way it did against the euro or we certainly didn’t. And that seems to be more or less stable. So as we go through the rest of this year, you should see in dollar terms, you should see pretty reasonable growth just based on what’s happening in the Italian market. And then obviously, you’ve got to factor in that we’re probably going to get some revenue growth in the U.S. market on top of…

Michele Ciavarella

Thank you, Mark. Thank you, Mark, for answering that, okay. And again, if anybody has any additional. But again, that was really something that it’s hard to extract that sometimes folks when you’re doing sort of the SEC filings, which are essentially consolidated. We’d like to be able to extract that a little differently, but we tried to explain that, and we did so. So that market is very, very important as well. So Jack, I think that, that’s likely going to start showing some good reflection in quarters coming forward.

Now I’ve also got another question from Edward. I’m going to answer that one. And then there’s a couple of guys that have had sort of similar questions. I’ll try to discuss the NASDAQ because it is lingering, it’s something people have a concern about, okay. So in terms of, Ed, the upfront cost for Ohio, we’re already putting — we’ve got two major upfront costs for Ohio. Apart from the bureaucratic side, which is going through the licensing process, the company has its license. We still need to go through the individual personnel process. I mean so it’s always a work in progress. But in terms of the upfront costs, we’ve already started the process of acquiring the hardware, both the hardware is the local kiosk that you deposit at the location. We already have an order on, we have a partnership going on there with one of the suppliers, we’ve already put, let’s say, significant amount of money towards that. And again, this is what — part of what I mentioned earlier, Ed, about being prudent with our cash, right?

And of course, the next part is probably the bigger part, which is getting the server set up. And the server system alone is probably about $1.5 million to $2 million depending upon how we want to expand it, and that has already been installed. So a lot of these upfront costs are covered. And I think really, it’s just a question of once we get through the licensing process, when we’re ready, we’ll be able to flip the switch relatively quickly with that, okay?

In terms of the — a couple of questions seem to be repeated here. Again, I’ll just try to let folks know that the NASDAQ gives us a great platform to be able to demonstrate our company and be able to show some transparency, right?

So clearly, management is well interested on remaining on the NASDAQ and we’re doing everything we possibly can. So there’s two different ways that you could remain on NASDAQ. Let’s say the most simplest way is to do a mechanical reverse split, okay? So to get to $1, right now, you’d have to do a 2:1 reverse split, more or less, okay? So that’s the mechanical method. That method is always available to us, okay? The other method is organically. The organic method is if we are able to prove to the audience that we’re a genuine company, we have an upside opportunity. You have management that’s well vested in the company. We’re hoping that, that message resonates with folks and are able to support our stock in the market.

I’m not an adviser. I’m not a stockbroker. You have to discuss that with your brokers. But quite frankly, I see that we have a certain number of catalysts that we hope resonate with investors and we gained some support. So those are the two different methods.

Now in terms of getting to $1, I don’t know, we saw a couple of months ago that in one day, it went from, I don’t know, I think it was $0.12 or $0.30 to $2.50. So clearly, there’s an opportunity to get support behind the company to offset that. But again, that’s neither here or there. But certainly, remaining on NASDAQ, remaining a transparent company, is important to management as well. We’ll do everything we possibly can to retain that listing.

Michele Ciavarella

I think that’s it, that I’ve got for written questions. Thank you very much, everyone. Anybody else have anything else that you’d like responded to?

Okay. I think that’s about it. I think I’ve got everything covered. So Darrell, maybe over to you, we could wind up the conversation at this point.

Operator

Thank you so much. Thank you, everyone, for joining us today. This does conclude today’s conference. You may disconnect your lines at this time, and I wish you a very good weekend. Thank you so much.

Michele Ciavarella

Thank you all. Thanks very much, everyone. Bye for now.

Mark Korb

Bye.