The Nevada Gaming Control Board has given its approval for Sega Sammy Creation, a Japanese subsidiary of Sega Holdings Inc., to acquire GAN, a prominent North American B2B iGaming provider and global B2C operator in online sports betting. This acquisition marks a significant step forward for Sega Sammy as it looks to expand its gaming presence in both the U.S. and Europe. The final approval now awaits the Nevada Gaming Commission’s decision, scheduled for September 26, with the deal expected to close by late 2024 or early 2025.

The acquisition has already cleared an important regulatory hurdle, having been approved by the Committee on Foreign Investment in the United States. Upon completion, each GAN ordinary share will be automatically canceled and converted into the right to receive $1.97 in cash. Once the merger is finalized, GAN will cease to be a publicly traded company, and its shares will be delisted from the Nasdaq Capital Market.

GAN, which developed the proprietary GameSTACK platform, offers internet gambling software to U.S. casino operators. This technology includes services for regulated iGaming, internet sports betting, and social-casino gaming under the Simulated Gaming brand. The acquisition by Sega Sammy Creation will integrate these capabilities into its broader gaming portfolio, bolstering its presence in the digital gaming market.

Strategic Complement to Sega Sammy’s Portfolio

Seamus McGill, Chairman of GAN, emphasized that the acquisition by Sega Sammy comes at a pivotal time, especially as the U.S. B2C market has become increasingly competitive. McGill, cited by CDC Gaming Reports, noted that slower-than-expected adoption of regulated online gaming in the U.S. and changes in key customer contracts made it difficult for GAN to maintain growth without substantial capital resources. Sega Sammy, with its financial strength, provides GAN with those resources, making the acquisition a strategic move for both companies.

Sega Sammy Creation is already well-established in the gaming industry, producing consumer and arcade game content, toys, and operating in resorts and Pachinko/Pachislot businesses. The company’s President and COO, Naoki Kameda, explained that acquiring GAN will allow Sega Sammy to tap into the online gaming space more effectively, with a focus on expanding its footprint in both the U.S. and European markets.

“We’re putting more focus on the gaming business,” Kameda said, highlighting that the gaming division is now positioned as a core pillar of Sega Sammy’s strategy. He also pointed out that the acquisition of GAN is a key part of this plan, enabling the company to grow its online presence and develop relationships with U.S. casinos. In July the Japanese company has agreed to acquire Stakelogic, a major supplier of slot games and live casino content.

Expanding in Las Vegas and Beyond

As part of its expansion, Kameda revealed that Sega Sammy is increasing its operations in Las Vegas by growing its warehouse space. He also expressed a commitment to supporting land-based casinos, particularly through partnerships rather than competition. GAN, which has already worked with Station Casinos on sports betting, will aim to collaborate with additional casinos across Nevada to expand its online platform.

Kameda noted that Sega Sammy has a budget of $500 million to $700 million to enhance GAN’s systems and services, with the potential for additional acquisitions. “We’re a cash-rich company and ready to support GAN business financially,” he said, addressing concerns about GAN’s previous financial difficulties. The company’s strong financial backing will enable it to propose new business opportunities in sports betting and social gaming.

Growth Opportunities in Sports Betting and Casino Gaming

Sega Sammy sees significant potential in GAN’s sports betting technology, particularly its mobile app, which Kameda described as having an easy-to-use interface that allows users to transition smoothly between different betting options. He added that GAN’s ongoing platform migration opens up further opportunities for growth, particularly in the areas of casino games and social games.

As part of its strategy, Sega Sammy is focused on ensuring its business with Station Casinos flourishes. The company has already developed a solid working relationship with Fontainebleau Las Vegas and is optimistic about expanding its reach in the sports betting market.

“We want to make sure the business with Station Casinos goes well first,” Kameda said. “We’re developing a good relationship. We’re waiting for this approval to have very positive conversations about Station Sports. GAN has all the systems. We can probably propose the sports betting business to other operators.”