Good morning. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bragg Gaming Group Q3 2021 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the call over to Mr. Richard Carter, CEO. Please go ahead, sir.
Thank you, operator. Good morning, everyone, and thank you for joining our third quarter 2021 earnings conference call. I'm Yaniv Spielberg, Chief Strategy Officer for Bragg Gaming Group. I'll be hosting today's call alongside my colleague, Chief Executive Officer Richard Carter, who'll comment on our third quarter performance and provide an update on the progress we're making with our growth initiatives. Ronen Kannor, our CFO, will review our third quarter results and our guidance for the fourth quarter of 2021, as well as projections for 2022. If you have not already done so, you can download our Q3 earnings call presentation from our website at www.bragg.games/investors in the section called Investor Presentation. The presentation we will review today is called 2021 Third Quarter Earnings Presentation. On this call, we'll review Bragg's financial and operating results for the third quarter of 2021.
Following our prepared remarks, we'll open the conference call to a question and answer period. I'll start the call with some brief cautionary remarks regarding certain statements that may be made on this call. Certain statements made on this conference call and our responses to various questions may constitute forward-looking information or future-oriented financial information within the meaning of applicable securities law. Statements about expected growth, prospective results, strategic outlooks, and financial and operational expectations, opportunities, and projections rely on a number of assumptions concerning future events, including market economic conditions, business prospects or opportunities, future plans and strategies, technological developments and anticipated events, trends and regulatory changes that may affect the corporation and its subsidiaries and their respective customers and industries.
While we believe these assumptions to be reasonable, they are subject to a number of risks, uncertainties and other factors, many of which are outside the company's control and which could cause the actual results, performance, or achievement of the company to be materially different. There can be no assurance that these assumptions or estimates are accurate or that any of these expectations will prove accurate. For a complete discussion of these factors, please refer to our recently filed press release and other publicly available disclosure. With that said, I'd like to turn the call now to our CEO, Richard Carter. Richard?
Good morning, everyone. Throughout the third quarter, we achieved significant progress with our strategic growth initiatives, including expanding existing customer relationships, building out the pipeline of premium in-house iGaming content, and providing our content and offering to new markets. As a result, we are transforming Bragg into a leading global content-focused B2B iGaming provider, and our progress on this front is evident in the third quarter results. Just a quick note. As Ronen and I review the third quarter performance, our comments will reference the results in Euros. For the third quarter, we reported revenue of EUR 12.9 million, which is up approximately 10% year-over-year. In addition, unique players were up 14.4% to 2.1 million, and wagering revenue was up 4.8% to EUR 3.2 billion.
Given the strong third quarter performance, our performance to date in the current quarter and our forward outlook, we have raised our 2021 full year revenue guidance to a range of EUR 55 million-EUR 56 million, and our Adjusted EBITDA outlook to between EUR 6.6 million-EUR 6.8 million, while also raising our 2022 revenue outlook to a range of EUR 59 million-EUR 61 million and our 2022 Adjusted EBITDA outlook to between EUR 6 million-EUR 7 million. These results and our forward expectations represent strong performance and underlying growth in our non-German markets. We expect our revenue mix to continue to reflect the decline in the percentage we derive from recurring revenue in the German market going forward, even as we continue performing in line with our expectations and following the implementation of the new regulatory regime on July 1st, 2021.
Beyond the strong Q3 financial performance, recent progress on our growth initiatives include continued market expansion. We entered 2021 serving markets that accounted for a TAM of approximately $2.8 billion, and we believe that by the end of 2022 we can address markets with a TAM of over $18 billion. In particular, by obtaining our supplier license in Greece and entering the newly regulated markets in the Netherlands, we're delivering on our strategy of expansion in regulated markets. With an initial batch of games certified and offered via our ORYX Hub distribution platform, our performance to date in the Netherlands is roughly 5x above our initial expectations, and we've already achieved an approximate 25% share of that market. We are making consistent progress with our goal of entering additional new markets to fuel our growth. Our progress on this front continues in Q4.
In October, we entered into an integration agreement with Playtech that will result in the full range of our ORYX Hub games being available for European and global operators that utilize the Playtech Games Marketplace platform. This includes leading operators in Spain, Italy, Switzerland, the Netherlands, the U.K., Mexico, and Latin America. Our partnership with Playtech is another milestone in our market expansion as it furthers our ability to get more of our content to leading iGaming operators who can then offer that content to more players globally. Last week, we announced a new platform deal with Sazka, the MERKUR brand in the Czech Republic, a $500,000 TAM market. This deal with a major brand in the industry further grows our iGaming platform business, as well as extending our regulated market reach. We expect this operator to be live in the second quarter of 2022.
We are also on track to generate initial contributions from the U.K. and Italian markets in the first half of 2022, and we expect to see initial revenue from the Ontario market by the first half of 2022. We also continue to achieve significant progress with our content development strategy and showcased our newest titles at iGB Live! in Amsterdam and at G2E in Las Vegas to a very favorable reception. On the licensing side, we have submitted applications in key European markets such as the U.K. and North America, including in New Jersey, Pennsylvania and Michigan, and are in the process of submitting an application in Ontario to be ready for when that market opens to iGaming, which is now expected in Q1 2022.
Finally, on this slide, we announced a new content partnership with the growing land-based slot studio, Bluberi, which I'll come back to and review in more detail shortly. Turning now to slide seven. I noted earlier that our performance beyond the non-recurring revenue we generate from Germany is helping to both offset the impact of the regulatory changes in Germany, but more importantly, helping to drive year-on-year improvement. In fact, our newer markets are performing above our expectations. For example, our revenue growth compared to our expectations heading into Q3 was driven by EUR 2.5 million from non-recurring German operations, EUR 0.5 million from a stronger-than-expected start from new launches and from several core existing customers, and EUR 0.2 million from better-than-expected underlying online content royalties.
This all helped drive the higher-than-expected revenue in Q3 compared to our expectations heading into the quarter as our recurring revenue from Germany was in line with our forecast for the period. Now turning to slide eight. As I mentioned earlier, our entry into new markets, in particular the Netherlands, which has been exceptionally strong out of the gate, coupled with new client wins on our ramp-up with operators launched earlier in the year, give a significant momentum as the current quarter continues to progress. We now anticipate that our new clients secured in 2021 will deliver 170% revenue growth quarter-over-quarter, which translates into incremental revenue of approximately EUR 2.8 million quarter-over-quarter based on our upgraded FY 2021 revenue guidance.
Existing client revenue has also seen a marked step-up in growth in October by more than 30% over September, which also underpins our current revenue momentum in the quarter. Combined with new client launches, this is anticipated to drive underlying quarterly sequential revenue growth over Q3 of over 60%, excluding Germany based on our new FY 2021 guidance. Now moving on to the content slide. Since our new Group Director of Content, Doug Fallon, joined us following our acquisition of Wild Streak Gaming in June, we announced a shift towards development of more proprietary content, which we believe will generate higher gross profit margins and higher EBITDA. In addition, we are working to secure more exclusive content with select third-party partner studios, which allows us to provide an enriched, unique, and localized offering to our customers in markets around the world.
We've been showcasing our new strategy, including product strategy, analytics, game segmentation, technology tools, and content partners at industry trade shows. We were at iGB Live! in Amsterdam at the end of September, the Global Gaming Expo in Las Vegas at the beginning of October, and next week, we'll be at SiGMA in Malta. At G2E, we presented for the first time to U.S. operators our product plan, including taking a number of highly successful and well-known Wild Streak land-based titles online, backed by our Fuze Player Engagement tools, which allow bonusing, tournaments with other players, and the creation of missions and quests in an engagement layer that sits over the top of the game. These features are proven to boost player activity with the result of increased wagering, were well-received at the show.
As we obtain licenses to enter more markets in Europe, North America and globally, we'll further diversify our products offering through our internal studio development with select content partners. This brings me to my next slide. Today, we announced Bluberi as our latest exclusive content partner. Bluberi is a Las Vegas-based slot studio serving the U.S. and Canadian markets with a portfolio of over 100 game titles that are already popular with players in the land-based casinos. This new partnership will allow Bragg to take Bluberi slot portfolio online with exclusive global online distribution rights via our network. The deal further underpins our commitment to bringing the right content to our customers in their local market while leveraging our global distribution network to introduce new gaming content to players wherever they may be, ultimately bringing new reach to our partners.
Additionally, this partnership allows for omni-channel distribution, whereby the same games will be offered to land-based and online operators, a trend that in our view, is only going to increase and become more ubiquitous in the industry as players demand to be able to consume content on their terms in a multi-channel seamless experience. Doug Fallon has a track record of success with taking well-loved land-based titles and adapting them to the online market, and our new partnership with Bluberi should add to his success and our performance. Moving on to the next slide. Wild Streak was also a key driver of our third quarter upside with a contribution of EUR 9.9 million.
Our acquisition of Wild Streak has been, and will remain, a key catalyst in our go-forward transformation as we continue to shift from primarily providing third-party online content towards providing in-house online content that carries significantly higher gross profit margins. As of September 30, Wild Streak had nine online casino games live in key iGaming markets, including New Jersey, where their games have been live since 2018, and more recently in Michigan, as well as in the U.K. and other regulated jurisdictions in Europe. We currently expect Wild Streak to release a minimum of 12 games next year, with that ramping up in the following years and ultimately driving material long-term growth.
Finally, as I noted on the second quarter call, Wild Streak's offering will benefit from the large distribution network available through the ORYX RGS and from full integration with our Fuze player engagement tools, which are proven to help drive improved game performance. On the next slide, we're showing the strong performance of the four Wild Streak titles launched this year outside of North America with our partner, Pragmatic Play. These games combined to generate record GGR numbers during Q3. The games also show very strong player loyalty. For example, Congo Cash, which we launched in early January, generated GGR in Q3 that were at 70% of the levels seen in Q1, which is very encouraging. We rolled out a fifth Wild Streak title with Pragmatic Play, Big Juan, last week, and we expect to launch a further five Wild Streak titles under this partnership in 2022.
On this next slide, you can see the continued strength and stability of Wild Streak's Dragon Power game in New Jersey over the last year. Dragon Power first launched in New Jersey in May 2020 and has remained among the top grossing online slots in that market since its launch about 17 months ago, which is an exceedingly long time for a game to maintain top performance. In fact, the game's performance in August this year was a record month for Dragon Power, when it generated almost $1 million in gross gaming revenue in New Jersey alone. We are currently planning to roll out Dragon Power in Michigan and West Virginia later this quarter and expect to release additional Wild Streak titles across the U.S. market in 2022. Turning now to the ongoing expansion of our near and medium-term TAM.
Our focus is on the online casino segment as this represents the largest opportunity in our key North American and European markets. Online casino is also much more profitable for operators than online sports betting. After our entry into the Dutch market, which followed activations in markets such as Greece to supply the regulated market there, and before that, Spain and Denmark, we now address an increasing proportion of the EUR 14 billion estimated European online casino market. We're making consistent progress with our U.K. market plans, where we have applied for a license and expect to be live in the first half of 2022. The U.K. market is estimated at $5.5 billion. We are also in the process of certifying games for the Italian market and expect to generate initial revenue from this market also in the first half of next year.
Italy is an estimated $2 billion online casino market. We continue to grow in the U.S., first with Wild Streak and then with Spin Games, and we expect to complete that acquisition later this quarter. During the third quarter, Spin Games announced it has obtained its license in Connecticut, adding to its existing U.S. distribution in New Jersey, Pennsylvania, and Michigan. Following the completion of this transaction, we will gain access to more than 30 key strategic relationships in the U.S., including with DraftKings, Golden Nugget, and PENN National. We plan to initially cross-sell our popular European casino content, after which we'll introduce our new proprietary online casino games which are under development to specifically address the U.S. and Canadian online casino players. The U.S. market is currently estimated to have a TAM run rate of more than $3 billion, and that number will grow considerably.
While the Canadian online casino market, inclusive of offshore operators, is today estimated at just a little above half a billion dollars. The total online casino market is expected to grow materially to an estimated TAM of $2 billion-$3 billion over the next several years, with Ontario alone representing about $2 billion of that current estimated TAM if you extrapolate the New Jersey online casino spend per adult to the Ontario addressable adult population. In conclusion, our 2021 third quarter performance highlights progress across an array of initiatives that underpin the strength of our business and create a foundation for long-term growth. Momentum for Bragg's expanding library of innovative iGaming content continues to build across our growing base of regulated markets.
As highlighted by our recent entry into the new Dutch market, we are performing well ahead of our internal expectations and seeing strong traction for our content and third-party content we distribute. Our content-led strategy, coupled with a growing penetration of the markets with our player account management platform, has seen strong success and has positioned us for significant Adjusted EBITDA growth and related margin expansion opportunities going forward. In particular, we have laid the foundation to bring our proven success to the U.S. and Canadian iGaming market through our Wild Streak acquisition and through the addition of new content partners such as Bluberi. We continue to build our global footprint of licenses and markets. We have obtained a license to supply the regulated market in Greece.
We've successfully launched our games platform and RGS in the Netherlands, and our RNG has been certified as fully compliant in the newly regulated German market. We have applied for a U.K. license, which we expect will go live in the first half of 2022. We are in the process of certifying our first games for the Italian market, and we have applied for a license in Belgium. We have also applied for licenses in New Jersey, Pennsylvania, and Michigan, are in the process of applying for a license in Ontario, and have applied for a license in the Bahamas. Our business model is unique in the industry as we have very minimal capital expenditure requirements to further build out the platform alongside a growing base of proprietary in-house developed content that is positioned to generate high margins and significant profitability.
Finally, we have a strong balance sheet with no debt and generate positive adjusted EBITDA, providing us with the financial flexibility to pursue investments in content and technology where needed to augment our portfolio and build out a library that makes us an ideal partner for iGaming operators in the U.S., Canada, Europe, and other key worldwide markets. With that, I will now turn the call over to Ronen, who will take you through the financials and our updated expectations for the balance of 2021 and for 2022.
Thanks, Richard. Good morning, everyone. I'll begin my comments on slide 20. Third quarter revenue was up 9.9% year-over-year to EUR 12.9 million. The increase in revenue was driven by organic growth from existing global customers, as well as from a full quarter of revenue contribution from our Wild Streak acquisition. Gross profit increased by 30.1% to EUR 6.6 million, and with margin increasing as well by 8.8 basis points to 51.4%, which primarily attributed to a higher proportion of revenue derived from our platform and managed services, along with Wild Streak Gaming revenue, which has no cost of sales, compared to games and content which have third-party costs associated. More about gross profit will be explained in the next slide.
Adjusted EBITDA for the quarter ended EUR 1.4 million, down only by EUR 0.4 million. Adjusted EBITDA margins ended 11%, which is 4.7 basis points down when compared to the previous year, and this is due mainly to increased salary and subcontractors costs, given our ongoing investment in expanding our software development, product, and management functions across the enterprise. Net loss was EUR 2.5 million compared to EUR 3.2 million in the prior year period. The year-over-year increase was primarily driven by the incremental increase in employee costs as well as professional services fees, which were incurred due to the Nasdaq listing. These increased costs were offset in part by the expanding gross profit margin and the reduction in deferred and contingent consideration payable.
From KPI perspective, wagering revenue generated by customers increased by 4.8% year-over-year to $3.2 billion, and the number of unique players using Bragg games via ORYX Hub distribution platform increased by 14.4% to 2.1 million. Also, as we noted last quarter, we have continued to retain 100% of our customers since 2018. While our customer retention remains solid, our dependence on our top 10 customers has improved. Revenue from our top customers declined to 54.3% of total revenue, compared to 55.6% in Q3 2020. A trend we expect to continue.
As you can see from the revenue and gross profit margin slide, the gross profit margins are in a growth trajectory since Q2 2020, and we are scaling up in line with the revenue growth and movement in the product mix as presented in the chart in the bottom of the slide. As we indicated in the past, platform and proprietary content products are carrying limited third party costs, which giving us ability to scale up gross profit margins. The contribution of full three months of revenue from Wild Streak Gaming and internal content revenue, adding approximately 3.8 basis points to the margins in Q3 and will continue going forward. Finally, Bragg is targeting gross profit margin to increase by 2024 up to 60% of the total revenue.
On this slide, I'll detail how we reconcile our operating loss to a positive adjusted EBITDA in the 2021 third quarter. Adjusted EBITDA was EUR 1.4 million at an 11% margin against an operating loss of EUR 2.2 million. The gap can be defined by the following non-cash and exceptional items. The first share-based payment, an award to the new directors, management, and employees in Q1 and in Q3. Transaction and acquisition costs. Expenses related to the acquisition of Wild Streak Gaming and Spin Games, and deployment of the corporation M&A strategy, and exceptional costs, which include legal and professional fees on the Nasdaq listing and other non-recurring regulatory and legal matters. Moving on to slide 23. As of the end of September 2021, Bragg has a solid balance sheet and continues to deliver strong cash flow performance.
Cash balances as of September 30 was EUR 20 million compared to EUR 26 million as of December 31, 2020, with no debt facility. Net working capital was EUR 11.4 million, compared to EUR 6.7 million at the beginning of the year. We continue to project positive free cash flow generation. As a reminder, our business strategy requires little CapEx related to technical debt requirements. From a cash flow perspective, in the nine months ended September 30, 2021, we settled EUR 11.5 million for the acquisition of Oryx. We paid EUR 8.2 million for the acquisition of Wild Streak Gaming, and continued to capitalize software development costs as part of the investment in our technology.
With the quarterly results out of the way, we raised outlook for the 2021 fourth quarter and full year, driven by performance in our newest markets, our growing numbers of customers worldwide, and our expanding portfolio of in-house games offered via Wild Streak and our ORYX RGS.
We now expect 2021 full year revenue of EUR 55 million-EUR 56 million compared to the EUR 49 million previously announced. We also expect 2021 full year Adjusted EBITDA of EUR 6.6 million-EUR 6.8 million compared to EUR 5.4 million discussed previously. We are also increasing our outlook for 2022, given the building momentum across our entire enterprise, which has us establishing a foundation for sustainable long-term growth. We now expect full year 2022 revenue of EUR 59 million-EUR 61 million compared to our initial guidance of EUR 54 million-EUR 56 million, which we provided on our second quarter call on 11th of August. We also expect full year Adjusted EBITDA of EUR 6 million-EUR 7 million. With that, I will turn the call back to the operator so that Richard and I can take your questions. Thank you.
At this time, I would like to remind everyone if you would like to ask a question, please press star then the number one on your telephone keypad. Your first question comes from the line of Neal Gilmer with Haywood Securities.
Yeah. Good morning. Thanks very much. Congrats on a strong quarter and the increased guidance. I got a few questions here. I'll probably hit two of them and then pass the line here. I guess first of all that sort of stood out with some of your comments there was your success in the Netherlands. Wondering if you can provide a little bit more commentary on, you know, how you think you've gained that kind of market share in a fairly short period of time, and is that something you can leverage as you enter the new markets, and have similar success there?
Yeah. Hi, I'll take that. Good morning to you. In terms of, I think it was quite a unique circumstance in the Dutch market. I mean, what happened there isn't necessarily gonna be replicated in other markets, but effectively you had a closing down of the market, and then you had it re-regulated. I'm sure as you've seen, a lot of the key players left the market, and that left a big opportunity for companies like Bragg with our market leading platform to go into that market also with our content and to take material market share on day one. I think it's not something that we'd expect to replicate in other markets going forward just because of the uniqueness of what happened in Holland.
Okay. All right. Thank you. Taking a look at your comments about your total addressable market that you started to this year, at, I think you said $2.8 billion, and I think you said by the end of next year, $18 billion. You contrast that with what you have as far as revenue growth implied in your guidance. You know, guidance sort of seems a little bit conservative given what you guys have been able to accomplish to date. Is there a decent amount of continued decrease in the German market that you're factoring into that guidance? Just some. You know, when you take a look at how much.
Okay.
You're expecting addressable markets to increase.
Yeah. There are quite a few moving parts. In terms of Germany, no. We're actually. I think if you look and go through the detail, there's actually a slight increase in our expectations for 2022 there. In terms of just how it works from a TAM perspective. You know, as we enter a new market, give it Italy, give it the U.K., you're probably looking at a ramp up in terms of rolling the content out, getting all of the integrations, all of the legal contracts done. You know, you're at least probably 12 months.
Although our TAM increases once we get access to the U.K. market by, let's call it sort of $5.5 billion-$6 billion, actually it takes us several quarters to get embedded and to start generating revenue, and then the materiality of it will increase. You know, we've obviously tried to be prudent because it's a new market and these things take a little bit of time. You know, we've assumed a sort of a ramp up over a sort of four to six-quarter basis. After sort of six quarters, we'd be expecting to sort of hit about 75% of the market.
Okay. That's helpful. You know, obviously then that really drives the revenue growth into sort of 2023, right? That's sort of where you hit sort of that full slide here.
Yeah, absolutely.
Yeah.
Obviously, you know, we're laser focused on trying to bring that ramp up forward. As we sit here right now, you know, it is obviously quite difficult to predict the timings on that, you know, quarter to quarter.
Yeah.
We're obviously working very, very hard to bring that forward. You know, we'd obviously look to do better than that. Yeah, that's basically the background to that.
Okay. That's great, Richard. Thanks. Appreciate your answers.
No worries. Thank you.
Your next question comes from the line of Adhir Kadve with Eight Capital.
Good morning, guys. Thanks for taking my questions. I missed the part on Germany where you kind of broke down the Germany revenue. If you could just maybe go through that just quickly one more time for me, I'd appreciate it.
What are you referring to in particular in Germany?
I think the offset. I just caught the tail end of it. You mentioned that, you know, some of the recurring revenue from Germany is being offset by. Sorry, some of the non-recurring revenue from Germany is being.
Yeah.
Offset by continuing recurring revenue. If you could just go through that.
Okay.
I thought that was a pretty important point. Thanks. Sorry about that.
It's just to give a bit more color on sort of what shaped the performance in Q3. Basically, as we gave guidance and headed into the quarter, we were looking at sort of doing about EUR 9.8 million of revenue. We obviously ended up doing a lot more than that. The drivers of that is partly, we did an additional just over EUR 2 million of revenue out of Germany, which is non-recurring. We did that additional revenue because of the continuing regulatory uncertainty and the continuing lack of clarity around licenses, which effectively, you know, extended the timeframe beyond our initial expectations.
There was a lot of back-and-forth going on with our clients, you know, showing us evidence that they're going through the licensing process. They were failing to get information back. We decided to make a decision in September, where we just decided to just IP block. If we hadn't got any clarity by then, we just IP blocked customers, and then once they find out in the future, then we'll obviously allow them to come back into the market. That's predominantly the sort of color behind what happened in Germany. Underlying, it's still trading, you know, in line with our expectations on a recurring basis.
Okay. Fantastic. Then I saw one thing, just on Dragon Power going into Michigan and West Virginia later on in the year. Do you find that game will easily just translate into those markets similarly well as it's done in New Jersey over these past years that you kinda mentioned?
It's a very good question. I think given if we take other content that's worked very, very well in New Jersey and is replicating its success in Michigan, then, you know, that's what we based it on. You know, the games that are performing extremely well in New Jersey have been rolled out into Michigan and have performed, you know, as well in Michigan. We think, you know, that should be the same as well in Michigan.
Okay. Good to hear. Just lastly, one more from me. Just in terms of M&A, obviously, we've seen an uptick in M&A overall in the industry. Can you maybe talk about your thoughts on M&A and how you guys are thinking of it? Obviously, the Wild Streak and Spin acquisitions have been done, but are you thinking about anything else just given the uptick in M&A in the industry?
No. I mean, you know, I think we've spoken before and, you know, I think it's inevitable that there's going to be more M&A, and it's gonna continue. We saw these cycles in Europe, and I'm sure we're gonna see the same in the North American market. In terms of Bragg today, I think we have the building blocks in place, and we have a very clear vision in terms of where we are heading. As of right now, we're not really focused on M&A. We're focused on execution and delivery.
Awesome. Thank you very much, Richard. I'll pass the line.
Thank you.
Your next question comes from the line of Matthew Lee with Canaccord.
Hi. Great job on the quarter, guys. You know, maybe just a housekeeping question to start. Can you give us a little bit of additional color into what prompted the 2022 guidance increase maybe from a geographical perspective? Is maybe the European market doing better than expected, or is it more of a North American expansion thing?
Morning. I think in terms of, we don't really wanna get broken down into, you know, each individual market. I think clearly, we've rolled out into some new markets recently, and we've signed some interesting deals with some major operators, and that effectively is driving the increase, and that's gonna be spread across multiple markets. Yes, I think the majority of the increase is driven outside of North America.
Great. You know, maybe can we have some color on the economics of the Bluberi deal? You know, I assume that it's a revenue share, but given that you're putting more effort into porting the content over to the online market, is that revenue split up maybe a bit more favorable than a traditional content deal?
I don't really wanna get into the real ins and outs of the Bluberi deal apart from, I think, you know, we're very excited to be partnering with Bluberi. We think it's a fantastic deal for both companies. I think, you know, it's a good deal for Bragg, and I'm sure it'll be also a very good deal for Bluberi given, you know, the distribution that we can offer to a company like that. I think it'll be obviously very incremental to our business from a revenue and a profitability perspective over the medium term.
Great. You know, lastly, in terms of margin expansion, I think I heard you say 60% gross margin by 2024. You know, can you help us understand where that comes from? Is it primarily from making, you know, more content proprietary or something else?
Yeah. I mean, it comes from quite a few levers. As we pivot away from taking third-party content and owning our own content, and at the same time, we're obviously expanding other high margin areas of the business. The platform business is beginning to ramp up very, very significantly. You'll see that during the quarters of this year, you're starting to see a positive incremental contribution from that side of the business. I think Ronen also highlighted that the Wild Streak acquisition adds roughly, I think. Is it 3%-4%, Ronen?
Yeah.
To the.
Correct.
Gross profit margin?
Yeah. Correct.
That's also helping in terms of the ramp-up. As we go through next year and the year after, and we're producing more in-house content and our platform is continuing to increase, then, that's how you get the expansion in the gross profit margin.
All right. Thanks so much.
No worries.
Your next question comes from the line of Lisa Thompson with Zacks Investment Research.
Good morning.
Morning.
I just have a couple more questions. Could you talk a little bit about what your experience has been with Spin now that you've been around them another three months? Have you changed any of your expectations on their performance or how you might be able to roll out differently than what you had been thinking before?
In terms of, yes, I mean, just remember that we still haven't closed this deal with Spin, so that's not expected to close until mid-December. In terms of, we've been obviously working very, very closely together, in terms of preparation for the combination and obviously the entry into the North American market. We were at G2E, as I spoke about, in our presentation, and we had a fantastic reception from operators there, looking at both the Oryx, Wild Streak and Spin products.
I think, obviously, over the last three months, you know, we've announced today this Bluberi deal, and we wouldn't have been able to do that Bluberi deal without Spin and what they brought to the whole overall offering. That was obviously very important, and that's where it's adding obviously a lot of value. We've also, you know, they've also brought Connecticut, which is not a market that we had envisioned when we did this transaction. We're also working on Ontario. I think, you know, they've added a lot over the last three months, and I'm sure they'll continue to do so as we move forward.
All right. One other thing I'm curious about, I mean, other than the countries you're pursuing and talking about already, where is the biggest opportunity for you that's still out there? How do you approach entering new countries? Like, is there some sort of methodology deciding what you're gonna do?
Look, I think you know, we've already laid out you know, the big opportunities for us are you know, the U.K., Italy. Holland is a big opportunity. We've obviously talked about that today, and obviously we've got off to a very good start there. The U.K. is the biggest regulated online casino market in the world, and we're not there. That's really you know, the big opportunity for us. In terms of how do we execute in that market, well, we need to have good content.
You know, doing deals like Bluberi today, given the Wild Streak acquisition we made earlier this year, given how we're building out our own in-house studios, that's how we're gonna be able to execute and commercialize the business into new markets, and that's really the focus over the next six to 12 months. There are obviously gonna be new markets like Ontario, and then also we'll probably focus a lot more as we go into 2022 in LATAM. We'll talk a bit more about that on future calls. Really for us, the sort of key focus near term is, you know, UK, Italy, Holland, and then leveraging into the North American market.
Okay, great. Look forward to it. Thank you. Those are my only questions.
Thank you very much.
Your next question comes from the line of David McFadgen with Cormark Securities.
Oh, yes. Hi. A couple of questions. Obviously you guys have done quite well in the Netherlands, with double-digit market share right out of the gate. As more operators enter the market, do you think that you can sustain that level of market share?
Well, we're not assuming we are gonna sustain that, number one. We're obviously hopeful we can. You know, we will continue to work very, very hard. I mean, part of that is going to be just looking at how and when other operators come back into the market. It's very difficult right now to predict. A lot of people are saying that some of the big operators that left the market will potentially get licensed in Q2. Some people are saying they won't get licensed at all next year. I think, you know, that's really gonna be where we end up in terms of market shares.
I think the interesting thing is that the operators we're supporting obviously are able to go and do the affiliate deals and basically create a moat around them. I think they'll definitely have been in a very strong position to defend themselves once other operators come into the market. In terms of our assumptions in terms of 2022 and 2023, we're certainly not assuming that we're gonna be staying at those market shares, no. Hopefully we'll do better than those assumptions.
Okay. You know, you highlighted Bluberi in your presentation. I was just wondering, can you give us an idea on how successful Bluberi's games are in the land-based side? I'm just wondering how they would translate online?
I don't have that data, to be honest with you. I think you can get that data quite easily. I think in terms of the buzz in the industry, you know, these guys have been doing better and better every year, so I think they'll continue to take market share. The games really resonate with the casinos we've spoken to. But I don't have the exact data in terms of where their games rank versus others. But we can definitely get hold of that.
Okay. Just on Wild Streak, it appears as though maybe this, you know, the company's performing better than your expectations so far. Is that correct or is it in line?
So far, slightly ahead of our expectations, yeah.
Okay. You mentioned Dragon Power. You said it did $1 million in GGR from New Jersey alone. Was that for the Q3 or was that for a bit longer period than that?
That was for the month.
Oh, for a month?
Mm-hmm.
Okay. What month was that? Do you mind me asking?
I think, I said. Did I say it was August? I'll confirm in an email. I can't remember off the top of my head. I think it was.
Okay.
Ronen, do you have the number?
No. I think it's, as you said, Richard. Yeah, a couple months back then. Need to check this one.
I think it was August, so I'll come back to you if it wasn't.
Okay.
I mean, the idea of this slide is just clearly to show that, this game has been established, and it continues to perform month-on-month, and actually has been increasing. Which is obviously unusual for the majority of, casino content. I think that's. We're trying to make the point that because it's land-based background, thought process are going into creating these games, it's a much longer process and that's what drives, you know, this type of performance.
Okay. Okay, that's great. Thank you.
Thank you.
Once again if you would like to ask a question please press star and the number one on your telephone keypad. Your next question comes from the line of Mike Shelton with FRC.
Good morning, guys. I was wondering if you could talk a little bit about the sports betting opportunity that you may be seeing in the U.S. and how you think about that from a long-term vision standpoint.
Morning to you. To be honest with you, we're not really focused on sports betting, especially from a North American perspective. You know, there are lots of other people that have a product offering, which is obviously a lot better than ours, so it's just not something that we've necessarily focused on. We think the bigger opportunity is on the online casino vertical, and that's where we're focused at the moment.
Thank you.
At this time, there are no further questions. I would like to turn the call back over to Yaniv Spielberg for closing remarks.
Thank you very much for joining our call, and we appreciate the questions and the insights. We'll see you all on our next call. Thanks a lot.
Thank you.
Thank you very much.
This concludes today's conference. You may now disconnect.