Hello, everyone, and welcome to this special call hosted by Gambling.com Group. I'm joined by Charles Gillespie, Chief Executive Officer and Co-founder, as well as Elias Mark, Chief Financial Officer. This call is being webcast live within the investor relations section of the website at gambling.com/corporate/investors, and a downloadable version of the presentation is available there as well. A webcast replay will also be available on the site after conclusion of this call. You may also contact investor relations support by emailing investors@gdcgroup.com. I'd like to remind you that the information contained in this conference call, including any financial and related guidance to be provided, consists of forward-looking statements as defined by securities law.
These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future results, performance, and business prospects and opportunities to differ materially from those expressed in or implied by these statements. Some important factors that could cause such differences are discussed in the Risk Factors section of Gambling.com Group's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statements are made, and the company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors that affect forward-looking information, except to the extent required by applicable securities laws. During the call, there will also be a discussion of non-IFRS financial measures.
A description of these non-IFRS financial measures is included in the company's final prospectus, filed with the SEC on July 19, 2021, pursuant to Rule 424(b) under the Securities Act, in connection with our initial public offering registration statement on Form F-1, and reconciliations of these non-IFRS financial measures to their most directly comparable IFRS measures are included in that prospectus, both of which are available in the investors tab of our website. With that, I'll now turn the call over to Charles.
Thanks, Ryan. Welcome, everybody, and thank you for joining us on short notice for this special call. Yesterday afternoon, we announced the acquisition of rotowire.com, the original authority in fantasy sports and a leading nationally syndicated sports news and information service, for a total consideration of $27 and a half million. With a laser focus on fantasy sports for the past 25 years, RotoWire has built a successful business which sits at the heart of the American sports experience. RotoWire publishes and distributes news, player updates, and statistics via rotowire.com, iOS and Android apps, and through its media partners. RotoWire generates revenue from subscriptions to premium content from B2B media services and from advertising.
While RotoWire's historical focus has been on season-long fantasy sports and more recently, daily fantasy sports, this acquisition is all about sports betting, specifically about accelerating the growth of Gambling.com Group's sports betting affiliate revenue in the United States. Before we go into further depth on RotoWire, I'd like to briefly provide an overview of our existing business on slide four to help illustrate where we sit today and set the stage for how the RotoWire acquisition will accelerate our strategy to drive U.S. growth. Gambling.com Group is an affiliate marketing company which operates exclusively in the global online gambling industry. We operate over 30 different websites which help consumers of online gambling find and select the best products available to them.
Fundamentally, each one of these websites offers an online gambling comparison shopping experience, showcasing the different online sportsbooks, online casinos, and online poker rooms available to users across 14 different national markets. Regulated online gambling operators cooperate closely with us to be featured on our websites and pay us for delivering new depositing customers to their platforms. Since our start 15 years ago, we have built an affiliate marketing powerhouse with widely recognized brands. We have leveraged these premium brands, including bookies.com and gambling.com, to establish leading positions across our markets. Our main markets include the U.K., Ireland, the U.S., Canada, as well as several other European markets. We have experienced recent growth across all of our market segments, with strong growth in North America and in particular in the U.S.
The online gambling market in the U.S. is a high-growth industry, and we are uniquely positioned to thrive regardless of which online gambling operators prevail as market leaders. Our sites and services create value in two key ways. First, we help B2C online gambling operators achieve their player acquisition targets by delivering them new depositing customers. Our online gambling operator clients compensate us on a performance basis according to the number and quality of players that we refer to them. Second, we simultaneously help players by providing them with the up-to-date information and tools to help them make the right choice when choosing an online gambling company, ensuring that they get a quality entertainment experience from a responsible business. Moving on to slide five.
Here we highlight some of the over 200 online gambling operators we work with at present to support their customer acquisition efforts, including the most recognized names in the industry such as DraftKings, FanDuel, BetMGM, Caesars, PointsBet, and many, many more. We have a proven and scalable business model backed by proprietary technology solutions and premium brands, which is driven by an experienced management team, which includes American founders with deep knowledge of the U.S. market. As online gambling legislative momentum continues to build in the U.S., our TAM continuously expands as new states and new products come online. Slide 6 provides a more detailed overview of RotoWire. RotoWire is the original authority in fantasy sports and is known by sports fans across the U.S. as a key source of player information. The company was founded in 1997 by Peter Schoenke, Herb Ilk and Jeff Erickson.
Today the company is based in Madison, Wisconsin, with 32 full-time employees and more than 150 external contributors. The company sits at the center of the U.S. sports experience as a trusted news and information source, and they syndicate their content to over 70 partners that include ESPN, CBS Sports, Yahoo Sports, and the NFL. RotoWire has over 100,000 paid subscriptions year to date, as well as more than 17 million unique visitors to its website. Importantly, RotoWire is a technology first company in the same way as Gambling.com Group. They have not hesitated to invest in their internal platforms to create compelling, data-driven premium content. RotoWire has a long history of firsts, including inventing the format for player news alerts that continues in use today.
Before the smartphone era, RotoWire started delivering player alerts via SMS, and today they have developed some of the most popular sports apps in the U.S., which consistently rank as the number one paid sports app in the fall and the spring with the start of football and baseball seasons. Most important of all is the positioning and authority of their website, rotowire.com. With an incredible amount of content produced by expert contributors, the RotoWire website is a digital giant. Year to date, the website has received 10 million referrals from search engines. Please keep this figure in mind as it is key to understanding our plans for the RotoWire business. I'm now on slide 7, where I will break down RotoWire's three revenue streams that we expect will generate more than $1 million each this year.
The core of today's RotoWire is their subscription business, which generates just over half of its revenue. The next biggest segment is B2B media services, where RotoWire supplies its content to sports media organizations like Yahoo Sports and ESPN. This is approximately 30% of revenue. Last but certainly not least, is advertising. While less than 20% of current revenue, we expect to be able to dramatically expand their advertising business by embracing the affiliate model. Currently, the bulk of advertising revenue is generated through display. I'm now on slide 8, where we outline the strategic rationale for the deal. The main purpose of this acquisition is to accelerate the growth of Gambling.com Group's sports betting affiliate revenue in the United States.
The rotowire.com website is a highly authoritative digital media property, which is ripe for substantial growth in general through the implementation of Gambling.com Group's digital marketing expertise, and in particular, our search engine optimization capabilities. We believe we can drive significant incremental traffic to RotoWire's existing fantasy content, but more importantly, drive significant new traffic to newly created sports betting content by leveraging RotoWire's expertise, authority, and trustworthiness within the sports community. We are also excited about the potential for RotoWire's subscription business. The RotoWire team has historically focused on the quality of their underlying content, and the Gambling.com Group team will help them with the business side of that content by bringing in best practices on conversion, monetization, and subscription billing management. Subscriptions are an increasingly important strategic priority for Gambling.com Group.
RotoWire's vast capabilities on content and data and close relationships with major American sports media will only strengthen our ability to pitch for partnerships with the best targets. I'm now on slide nine. Historically, RotoWire's advertising business has been powered by display. Moving forward, we will adjust their model to focus more on search and in particular, high intent traffic, which is best monetized through affiliate partnerships. To put things in perspective, with 10 million search referrals in 2021, rotowire.com will drive approximately four times more search referrals than both gambling.com and bookies.com combined even before RotoWire has been brought up to the same level of search optimization. The gambling.com and bookies.com traffic is high intent and exceptionally high value, and the RotoWire traffic is different. It is higher up the funnel, it's lower intent, and it's lower value. This is not a like for like comparison.
Having said that, with such a formidable amount of existing search traffic on rotowire.com before we even optimize it, we believe that the potential to drive more traffic through RotoWire's existing content and newly created sports betting content is enormous. The end game here is to make RotoWire one of, if not the largest, individual online sports betting affiliate website in the United States. Now on to slide 10, where we go into the RotoWire subscription business. RotoWire offers 13 different premium subscription products designed to give fantasy players an edge. These products are tailored by sport and cover all major North American leagues. RotoWire has more than 100,000 paid subscription this year to these services. These include daily or annual tools for fantasy sports and one-off products like draft packs. The subscriptions revenue stream is a new source of recurring revenue independent from Gambling.com Group's main business.
This will provide the group with a foundation of consistent and predictable revenue, which we can use to tighten our forecasting moving forward. As stated already, RotoWire's historical focus has been on the quality of the content, not the mechanics of the business side of the subscriptions. We look forward to leveraging the extensive experience managing subscription businesses available from our board of directors to bring in the right tools and talent to take the RotoWire subscription business to the next level. Slide 11 highlights RotoWire's B2B media services and partnerships, where the company nationally syndicates their original content, news, and data to more than 70 premier industry partners such as ESPN, CBS Sports, Yahoo Sports, and DraftKings. In many cases, these are long-standing partnerships that the company has had for more than 20 years.
We plan to leverage RotoWire's B2B relationships and their ability to supply content at scale to close strategically important media partnerships. Increasingly, we see media partnerships as a logical extension of our existing business, where we help media owners with significant audiences and authority capture high-intent traffic. We can optimize those efforts to an extent that would be impossible for the media partner on their own through our better deals, scale, experience, and most importantly, data science. On to slide 12. We're very excited that Peter, Irv, Jeff, and Tim will be joining our team and are collectively bringing with them more than 80 years of experience in the online sports data and information industry. Peter, Irv, and Jeff started RotoWire together in 1997, along with Tim, have proven themselves as entrepreneurs and solid operators, having built out the company into what it is today.
They have consistently innovated with the changing technological mediums that players have used to engage with sports content, and each of them have been authoritative voices in the U.S. sports betting industry, including testifying on Capitol Hill before Congress and leading the effort for the legalization of online fantasy sports. We welcome each of them, along with the broader RotoWire team, to the Gambling.com Group family and look forward to working together in the years to come. At the end of the call, I will provide some additional updates for the group around our U.S. expansion efforts, but first, I'd like to hand the call over to Elias to review the financial aspects of the RotoWire deal in greater detail.
Thank you, Charles. Slide 13 outlines the deal structure and terms. We will pay a total consideration of $27 and a half million, funded with a combination of existing cash balances and newly issued unregistered shares. At close, we will pay $20 million, of which $15 million will be in cash and $5 million in unregistered shares. In addition, we will pay deferred consideration on the first anniversary of $2 and a half million and on the second anniversary of $5 million. We will have the option to pay each tranche of the deferred consideration with up to 50% in shares. The deal has already been approved by the Gambling.com Group board as well as four of the RotoWire shareholders. It is subject to customary closing conditions, and we expect the transaction to close in early January.
The total consideration of $27.5 million represents approximately 4x RotoWire's expected 2021 revenue. We expect the deal to be accretive to 2022 earnings and earnings per share and to be highly accretive by 2023. At closing, we expect RotoWire's operating margins to be around 20%. When we start realizing the very substantial revenue synergies from incremental higher-margin performance marketing revenue, we expect margins to gradually improve throughout 2022. By the end of 2022, we expect margins to be in line with our corporate 3-year adjusted EBITDA margin target of 40%. It is worth noting that post-transaction close, we expect the cash balances to remain net cash positive with significant cash balances. This leaves us in a position to continue to aggressively pursue our M&A strategy. With that, I'll turn the call back over to Charles for some additional updates before we move to Q&A.
Thank you, Elias. We'd also like to take the opportunity on today's call to highlight some of the other important work we've been doing in the background, including asset acquisitions and portfolio expansion of our domains. Now on slide 15, we've recently closed the acquisition of usbettingreport.com. This was a small deal, but one which is a perfect example of what we look for in acquisitions of affiliate targets, a recognizable branded destination, which is both under-optimized from a search perspective and under-monetized from the perspective of deals with our clients. The seller had done many of the hard yards to build this site, creating a substantial amount of content and making significant progress on search marketing. But by acquiring this site, we are adding another high-quality U.S.-facing affiliate site to our portfolio in a very capital-efficient way.
As we communicated on our earnings call last month, we acquired domain names and small websites such as usbettingreport.com in the normal course of business and consider such acquisitions separate from our main M&A strategy. The assets of US Betting Report will roll up into our existing portfolio and be operated by our existing team. Lastly, on slide 16, we provide some disclosure for the first time on the high quality domain name portfolio we have assembled for the U.S. market. Gambling.com Group has always put a high priority on acquiring the top domain names. These domain names are ultra prime real estate, and we are seasoned real estate developers. At this stage, most of the domain names have not yet been developed into websites.
The point today is to highlight our intent to be present in every U.S. state where we expect a viable online market with one of these ultra prime domain names to drive growth in the U.S., just as we did in Arizona with BetArizona.com. We now have prime or ultra prime domain names for future websites in all 50 states. I'd like to highlight some of the most sensational domain names we have in the stable, which include BetCalifornia.com, BetTexas.com, BetOhio.com, BetCarolina.com, as well as the recently acquired scores.com. We originally paid $2.5 million for the Gambling.com domain name. The result of that purchase is now obvious to all of our stakeholders. A leading position in the online gambling industry, including being the first and only Nasdaq listed online gambling affiliate marketing company in the United States.
In time, we plan to demonstrate comparable returns for many of these new additions to our domain portfolio. With that, we'd be very happy to take a few questions.
Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, we ask that you each keep to one question and one follow-up. Our first question comes from the line of Barry Jonas with Truist Securities. Please proceed with your question.
Great. Thanks so much, and congratulations, guys. Appreciate all the helpful color in the deck. Maybe, you know, going through the revenue mix of the three segments, just be helpful to maybe talk about how you see that mix developing, over time.
Yeah. What we've said here is that we intend to build incremental affiliate marketing revenue with on the back of sports betting content. That will be the key growth driver. We also see growth opportunities by optimizing the subscription channel, and we see growth opportunities by expanding the media partnership side.
Got it. I mean, like, should we expect advertising to, you know, and affiliate to be the bulk of the business over the next few years? Or, you know, just from a growth profile, is that I guess that's where you see the largest opportunity?
Yeah. If we look forward to 2023 and beyond, that would be our expectation.
Great. Just as a follow-up, maybe talk a little bit about the M&A pipeline from here as well as your appetite. You know, this noticeably being your first deal, what should we expect going forward?
Well, the party line hasn't really changed since the last conference call. We are extremely busy. There's an incredible amount of opportunity. We've had the great pleasure to look at a huge number of deals. This is obviously not the only conversation that we're having and everything in our pipeline is very good and those targets, you know, continually move deeper into the pipeline. You know it did take a few months to announce the first deal post IPO, but we wouldn't expect the same amount of delay for the next deal.
Great. Thanks, Charles. Thanks, Elias.
Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. We'll pause a moment to allow for other questions. Thank you. Ladies and gentlemen, this does conclude our question and answer session. I'll turn the floor back to Mr. Gillespie for any final comments.
Thank you again to everybody for joining us today. There's a lot of new information in today's call, but everything we've talked about today is in support of growing in the U.S., our number one target market. These announcements represent a significant step up in our U.S. presence and are critically important to accelerating our already high growth in the U.S. To summarize, we are acquiring a one of a kind asset, RotoWire, with significant untapped value. We plan to leverage their formidable digital presence into a leading position in the U.S. online sports betting affiliate market, while also substantially growing their subscription revenue. Outside of RotoWire, we've been extremely busy evaluating other opportunities and assembling the raw materials necessary to lead in the U.S.
usbettingreport.com and the blockbuster domain name portfolio we have assembled will play a critical role in that development and differentiate us from our peers. We appreciate your support and interest in Gambling.com Group, and we look forward to updating everyone next quarter.