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AGS Reports Second Quarter 2020 Results

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AGS reported operating results for its second quarter ended June 30, 2020 .

“Although casinos started to reopen in the later part of the quarter, we remained disciplined in how we reintroduced cost back into the business, ramping departments that are essential to run our business, such as field service, R&D and manufacturing,” said AGS President and Chief Executive Officer David Lopez . “Initial game performance on EGM units that are in-service has been strong and better-than-expected, which allows us to lean on our strong recurring revenue footprint in this challenging environment. Prior to and even during COVID-19, we were seeing strong initial performance from our new products, such as the Starwall and Orion Rise , as well as continued momentum from our new titles on Orion Portrait and our suite of table game progressives. Given the breadth and depth of our current content portfolio, we believe that the long-term opportunities for AGS remain intact, and that we have ample liquidity and the best-in-class team to navigate through near-term uncertainties.”

Kimo Akiona , AGS’ Chief Financial Officer, added, “Our careful management of expenses and capital expenditures during the casino shutdowns in the quarter in addition to drawing $30 million under the existing revolving credit facility and entering into incremental term loans of $95 million have resulted in a strengthened liquidity position. Although it is hard to predict exactly how the pandemic will continue to impact the macro operating environment, given all of the measures we’ve taken, we believe we are positioned with sufficient liquidity and flexibility to emerge from this a more competitive and more nimble organization.”

Second Quarter 2020 Financial Results

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During March and April and continuing through mid- to late-May of the current year, nearly all of our customers closed their operations due to business disruption caused by the global spread of COVID-19 and the actions by governments and businesses to contain the virus. The markets that we serve have been severely impacted, which is the primary reason for the decreases in the metrics noted above, specifically revenues, (loss) income from operations, net loss, Adjusted EBITDA, and Adjusted EBITDA margin.

A limited number of customers reopened in mid- to late-May and through June; by June 30 , approximately 500 of our 650 customers properties in the United States and Canada were partially open. In Mexico , 25 of our 320 customers properties were partially open as of June 30 .

Total revenue decreased to $16.8 million , primarily due to decreased gaming operations revenue and unit sales in our EGM segment.

Gaming operations revenue, or recurring revenue, decreased to $10.2 million compared to $53.6 million in the prior year period, primarily related to our leased EGMs and Table Products that were impacted by closed casinos. This decrease was slightly offset by increased revenue in our Interactive segment.

Net loss of $42.6 million increased year-over-year from net loss of $7.6 million in the prior year, primarily due to the decrease in EGM and Table Products revenue, partially offset by decreases in expenses that were a result of management’s actions taken to decrease spending amid COVID-19, including employee furloughs, a reduction in force, and salary reductions. Additional savings resulted from the Company’s focus to reduce expenses, primarily in sales and marketing activities, professional fees, and delayed development expenses.

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Total Adjusted EBITDA (non-GAAP)(1) decreased to a loss of $1 .2 million compared to $35.7 million in the prior year period, driven by decreases in our EGM and Table Products segments and slightly offset by growth in our Interactive segment.

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AGCO Removes Cap on Seller Commission for Charitable Lottery Products

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The Alcohol and Gaming Commission of Ontario (AGCO) has updated several lottery policies to remove the cap on seller commission for Paper Raffles and Media Bingo, along with removing the prohibition on Catch the Ace paper lotteries, to align with other charitable lottery products.

Licensed charities may now negotiate commissions directly with sellers and determine commissions, provided they are reasonable and tied to the cost of service provided by the seller.

These updates further the AGCO’s commitment to adopt an outcomes-based regulatory approach and reduce burden for the charitable gaming sector. Local charitable organizations will have greater flexibility to make decisions that best serve their fundraising objectives.

Important Reminders

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• Charities must still receive approval for other expenses incurred under their licence and retain receipts for seller commission paid.

• Licensing authorities will not require documentation to be submitted as part of the application process, however, charities are still subject to audit to determine compliance.

• Charities are reminded of their legal requirement to meet their obligations under the Criminal Code and with respect to conducting and managing a charitable gaming scheme.

• As with all licensed charitable lottery events, charities must take the necessary steps to ensure that they are conducting and managing the lottery event within Ontario.

For charitable gaming-related inquiries, email an AGCO Eligibility Officer at [email protected] or call AGCO Customer Service at 1-800-522-2876, Monday to Friday from 8:30 a.m. to 5 p.m.

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Alon Segev

Segev LLP Celebrates 10 Years of Business-Focused Legal Innovation

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Leading business, technology, finance, and gaming law firm, Segev LLP, is proud to announce its 10th anniversary. Over the past decade, Segev has evolved from a bold idea into a multi-jurisdictional firm serving clients across Canada, the U.S., and beyond.

Built for innovation-driven industries, the firm is widely recognized for its work with companies at the forefront of gaming, crypto, technology, and emerging sectors. “Our 10-year anniversary is a defining moment,” said Founding Partner, Ron Segev. “It’s a testament to the strength of our team and our culture of teamwork, self-improvement, and growthall of which is directed at scoring wins for our great clients.”

As industries like fintech, crypto, iGaming, and AI have matured, so has the firm, often in parallel with its clients. “We’ve all grown together with our clients from one success to the next, whether it be helping clients complete financings or helping them close business,” said Managing Partner Alon Segev. “I look forward to continued growth for us and our clients in the next 10 years!”

The firm’s client-first approach has consistently earned recognition from top legal ranking guides. Segev LLP is ranked by Chambers and Partners as a “Leading Firm” and “Band-1” in Canada for Gaming Law and are also recommended by The Legal 500 and Lexology. These rankings reflect the team’s ability to deliver strategic, high-quality legal solutions that align with their clients’ business goals.

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Recognized for their unique ability to exceed expectations and deliver out-of-the-box solutions, Segev LLP’s clients have affirmed: “The firm demonstrates its capability not only to understand complex matters, but also to offer solutions that are practical, pragmatic, and value-adding.”

“Segev possesses outstanding resources and maintains global partnerships, enabling it to deliver precise and informed responses to any queries related to the iGaming industry.”

“Epic service, very good, I won the case!”

“Great service, friendly atmosphere, and support.”

Several Segev team members also reflected on the milestone: “There was a moment early in my time here when I realized I wasn’t just being brought in to help; I was expected to contribute, take initiative, and run with big ideas. That stuck with me,” said Negin Alavi.

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“Together with our clients, [Segev] has experienced remarkable growth over the past decade. I’m honored to have contributed to this journey and to celebrate these shared successes,” said David McHugh.

Segev has cultivated a thriving law practice on the principle that challenges are to be embraced as opportunities. The approach has enabled us to grow as lawyers, but more importantly, it has enabled us to ensure the success of our clients,” said Mark Balestra.

“Since joining through Segev’s Ontario expansion, I’ve had the chance to work alongside some of the sharpest and most collaborative lawyers in the gaming space,” added Manav Bhargava. “As a full-service firm and industry leader, Segev stands out for its ability to support innovative businesses with practical, forward-thinking legal advice.”

Segev LLP will commemorate the anniversary with a series of internal and external initiatives throughout the remainder of the year.

The post Segev LLP Celebrates 10 Years of Business-Focused Legal Innovation appeared first on Gaming and Gambling Industry in the Americas.

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INCENTIVE GAMES SECURES ONTARIO GAMING LICENSE

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Incentive Games, a leading B2B games provider, is proud to announce that it has been awarded an Ontario Gaming License by the Alcohol and Gaming Commission of Ontario (AGCO), effective today. This achievement enables the company to offer its portfolio of real-money games to licensed operators and players across the province.

The license underscores the Incentive Games’ commitment to meeting the highest standards of compliance, security, and operational excellence. The rigorous application process demands robust security protocols and comprehensive responsible gaming measures and affirms the company’s readiness to enter one of Canada’s most dynamic iGaming markets.

The North American market is a strategic focus for Incentive Games, and this milestone follows closely on the heels of the company receiving its Provisional Michigan gaming licence from the Michigan Gaming Control Board earlier this month.

Incentive Games will distribute its real-money gaming content in Ontario through Incentive Studios, the company’s dedicated Real-Money Gaming division, ensuring a focused and tailored approach to the market.

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“Ontario represents a huge opportunity for us, and securing this license is a proud moment for the whole team,” said John Gordon, Chief Executive Officer at Incentive Games. “It reinforces our dedication to meeting the highest standards while delivering compelling real-money content. We’re looking forward to building strong relationships in the region and continuing our momentum across regulated markets worldwide.”

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