Elys Game Technology Reports Second Quarter 2022 Results - Seite 3

North America Operational Highlights

Our first large venue deployment reached new milestones in Q2-2022 as the all-new The Gallery Sportsbook at Ocean Casino Resort opened on July 1^st, and the system migration to new hardware was successfully completed on August 3^rd with no blackouts nor service interruptions. In addition, we have completed the first CBE Class-B JV application model in Washington, DC which would represent our second small venue opening at the Cloakroom Gentlemen’s Club in DC that is expected to complement our inaugural Grand Central Restaurant and Sportsbook. The new application model is expected to expand our footprint in DC rapidly with a standard format to ease the onboarding process for new restaurants and small business owners seeking to establish a sportsbook within their business establishments.

In April 2022, we also partnered with Wright Bet Ventures in Ohio to commence our plan to enter the Ohio sports betting market in 2023, which could allow non-conventional gaming venues such as bars, restaurants, and other such businesses acquire licenses to offer a turn-key sportsbook to patrons within their establishments thereby expanding our successful Washington, D.C. small business sportsbook model.

These developments came in line with our plans to have new U.S. operations launched by the start of the 2022-23 NFL season.

Italian Operational Highlights

“The defensive strategy to focus growth towards our Multigioco operation that we implemented with the onset of COVID conditions in Italy is paying off. Our online betting revenue grew in Q2-2022 by approximately $1.0 million over Q2-2021 and our land based revenue shows signs of recovery by growing $0.2 million in Q2-2022 over Q2-2021” stated Interim CFO of Elys, Carlo Reali. “Commissions paid to agents decreased by $1.7 million to $7.9 million representing 4.2% of turnover compared to 4.4%, and we experienced a decrease of approximately $1.1 million in expenses for the first half of 2022, underlying our ongoing efforts to improve our margins.

As we previously discussed, the second stage of our B2C operational strategy began in Q1-2022 where we ultimately acquired approximately 80 ADM land-based license rights for locations that we expect to reopen in Q3-2022, and with an additional 20 rights expected during the second half of 2022 to fully recover our land-based channel in Italy. We expect this investment could generate additional revenue of approximately $20 million per year and return our operations to pre-pandemic revenue levels without significant costs. We are confident that the additional Italian ADM rights should also afford us the ability to certify both our Italian land-based sportsbook and our Virtual Generation virtual sports platforms which could also lead to additional B2B revenue opportunities going forward.”