With online casino gaming’s growing popularity, businesses would do well to consider investing in companies that feature prominently in the industry. A good example of such a company would be Net Entertainment (or more popularly known as NetEnt). Founded in 1996, the Sweden-based company is considered a pioneer in the online casino gaming industry. Pontus Lindwall started the company as an offshoot of Cherryföretagen AB (Cherry), a company founded in Sweden by his father Bill Lindwall and Rolf Lundström. Two years after NetEnt’s founding, Cherry then managed to acquire a minority share in the company.
NetEnt: The Pioneering Years
In 2002, just a couple of years after its founding, the company launched its first trademarked product: NetEnt Casino. A year after that in 2003, the company’s sales and profitability saw a sharp increase thanks to its delivery of its Casino Modules to a number of customers in Sweden. 2004 saw the company increasing its visibility as it began deliveries of its Casino Modules to international clients. By 2005, NetEnt got its first license for its games and services from the Malta Gaming Authority.
Five years after it launched NetEnt Casino, the company finally spun off from Cherry and was immediately listed in the NGM Exchange. This was followed up in 2009 with the company getting into the Stockholm Stock Exchange’s main listing. By 2010, it released one of its most popular titles: Gonzo’s Quest. In that same year, NetEnt also received a Category 2 gaming license issued by the Alderney Gambling Control Commission.
Focus on Mobile and Expanding to other Markets
2011 saw NetEnt slowly shifting its focus on the growing popularity of mobile casino gaming as well as expanding to the newly regulated Italian market. The following year, the company found itself entering agreements with top online casino and sportsbook brands like Paddy Power and Boylesports. 2012 also saw the regulation of the Danish market with the company then proceeding to obtain certifications and securing customers who then launched a couple of its games.
Rapid Growth
From 2013 onwards is when NetEnt truly came into its own. With its casino games becoming more popular, the company continued to acquire new clients and enter new markets at a brisk pace. 2014 alone saw 31 new customer agreements with some of the top names in the industry. The year after that saw the company finding a place for its titles in the United States through New Jersey in addition to getting local licenses for its operations in the UK and Spain. In the past 3 years, the company has managed to enter regulated markets in Romania, Portugal, Bulgaria, Serbia, Czechia, Mexico, and British Columbia (gaming license). This period also saw the company doubling down on its mobile push with its adoption of HTML5 as well as the launch of its mobile live casino solution.
Investing in NetEnt
As mentioned earlier, now would be the best time to invest in NetEnt. If you somehow have access to the Nasdaq Stockholm Large Cap then you’ll just need to look for the company’s ticker to see its share price and other information. As of this writing (March 17, 2018), the company’s share price is at 52.53 SEK. In terms of the company’s performance in the past year, it’s managed to increase its sales by 11.7% largely thanks to its entry of the Mexico, Czechia, and Serbia markets. As for its operating margin, the company has managed to top 36.1% in 2017. 2018 1st quarter numbers are also relatively good with the company reporting a 430 million SEK revenue with an operating profit of 134 million SEK and a margin of 31.2%. For investors, this translated to .61 (.48) SEK earnings per share (before and after diluted EPS).
https://www.netent.com/en/the-share/
Detailed Earnings Report
If they really want to delve into NetEnt’s earnings report, potential investors can try checking out the company’s website. The ‘Invest in Us’ section should have all the information potential investors need to make an informed decision. NetEnt uses this section to post its quarterly and yearly earnings reports as well as updates on events that may be of interest to investors. There is also a section which has up to date news that cover the company’s deals and milestones. As for potential investors who may want to get in touch with the company, it is possible to send queries to its investor relations email: [email protected].
https://www.netent.com/en/section/invest/financial-reports/
Does NetEnt have slots available for American players?
A majority of the States in the United States consider online casino gambling illegal. With that said, there are States like New Jersey and New York that do allow this activity. It is through the casinos in these states that players can then try out NetEnt’s online slots. Just as recently as April 2018, the company managed to complete a deal with the Hard Rock Hotel & Casino in Atlantic City, New Jersey. The customer agreement will have the Hard Rock Hotel & Casino serving as the distributor of the company’s online casino games (a majority of which are video slots). Of course, the distribution of these casino games will be confined to the new land based casino owned and managed by Hard Rock International in New Jersey.
Prior to this 2018 deal, NetEnt also managed to introduce its portfolio of casino games to the United States through an agreement with IGT. This deal was a patent cross-license agreement with PGT that was consummated in 2015. Through this, the company was able to offer titles that had game features found in IGT’s patent portfolio.
Of course, it’s not just the United States market that NetEnt is interested in. Other countries in the Americas have also been targeted by the company as part of its expansion in the continent. In the same year that the company signed the cross-license agreement with IGT, it managed to obtain a license as a supplier in British Columbia, Canada. This allowed the company to supply the British Columbia Lottery Corporation with its casino games. Aside from Canada, the company has also signed a license agreements with operators in Mexico. The company started supplying casino games to Codere’s online casino network back in 2017 and followed it up with a similar deal with Caliente’s in 2018.
VR Slots Pioneers
NetEnt first showcased a VR slot at ICE Totally Gaming 2016. On the company’s 20th year, it provided a working VR slot demo of Jack’s VR World, a title which was based off of its Jack and the Beanstalk slot. At ICE Totally Gaming 2017, the company introduced another VR slot title to the market. Whereas the Jack’s VR World slot was just a demo, this VR slot was heralded as the first real-money VR slot game in the market. Based off of another of the company’s popular titles, Gonzo’s Quest VR is expected to be available on NetEnt’s platforms by the summer of 2018. As for concerns that not all players might be able to enjoy the title since it’s on VR, the company has addressed this by developing the slot using WebVR. This technology makes it possible for players who don’t have personal computers or phones with beefy specifications to still enjoy simple VR apps on their web browsers.
Commitment to Quality and Fairness
In the 20+ years that it has been around, NetEnt has managed to accumulate one of the most impressive portfolios of casino games in the industry. In fact, a number of the titles that it developed over the years like Gonzo’s Quest, Jack and the Beanstalk, and Starburst have become staples of online casinos worldwide. While most companies are content to develop cookie cutter casino games by the dozen that follow overused themes, the company has always gone the opposite route. Instead, it has made sure that the titles that it puts out are always of the highest quality not just in terms of aesthetics but also gameplay-wise.
Aside from its quality control, NetEnt also ensures that the titles it develops all pass the standards set by regulators in the jurisdictions where they’re licensed. It is perhaps this commitment to developing a fair yet still enjoyable and rewarding titles that has endeared the company to players around the world.
Manageable Risks
Of course, there are still risks involved when investing with NetEnt. The company itself acknowledges this in a page on its website. With that said, risks are to be expected when investing in any company on any industry. What makes investing in this particular company rewarding though, might be the fact that the online casino gambling industry is looking at brighter days ahead. The industry is slowly maturing but technological advancements (especially in VR) and opportunities in large markets (the US Supreme Court’s ruling on the legality of sports betting) could herald further growth. If you want a higher chance of getting a return on your investments then you ought to take a serious look into directing them at NetEnt.
