A platform
for growth
Annual Report
& Accounts 2023
Gaming Realms plc Annual Report and Accounts 2023
Gaming Realms is an international
developer, publisher and licensor of
mobile games, building a portfolio
of highly popular gaming content
and brands.
Through its unique IP and brands, Gaming Realms
is bringing together media, entertainment and
gaming assets in new game formats. The Gaming
Realms management team includes accomplished
entrepreneurs and experienced executives from a wide
range of leading gaming and media companies.
Strategic Report
Corporate Governance
Financial Statements
Highlights
At a Glance
Executive Chairman’s Statement
Chief Executive’s Review
Financial Review
Engaging with Stakeholders
Principal Risks and Uncertainties
1
2
4
6
8
12
14
www.gamingrealms.com
Board and Executive Management
Directors’ Report
Statement of Directors’ Responsibilities
Corporate Governance
16
18
19
20
Independent Auditor’s Report
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of
Changes in Equity
Notes to the Consolidated Financial
Statements
Parent Company Statement of
Financial Position
Parent Company Statement of
Changes in Equity
Notes to the Parent Company
Financial Statements
Company Information
24
30
31
32
33
34
63
64
65
68
Strategic Report
1
2023 Financial Highlights:
2023 Financial Highlights:
Revenue
increased by 26% to £23.4m
(2022: £18.7m)
Adjusted EBITDA1
increased by 29% to £10.1m
(2022: £7.8m)
EBITDA
of £9.2m
(2022: £7.4m)
£23.4m
+26%
£10.1m +29%
£9.2m +24%
2023
2022
£23.4m
£18.7m
2023
2022
£10.1m
£7.8m
2023
2022
£9.2m
£7.4m
Licensing revenue
increased by
33% to £19.9m
(2022: £14.9m)
Social publishing
revenue fell by
5% to £3.5m
(2022: £3.7m)
2023
2022
£19.9m
£14.9m
2023
2022
£3.5m
£3.7m
1 EBITDA is profit before interest, tax, depreciation and
amortisation and is a non-GAAP measure. The Group uses
EBITDA and Adjusted EBITDA to comment on its financial
performance. Adjusted EBITDA is EBITDA excluding share
option and related charges and adjusting items, which
are significant, non-recurring items outside the scope of
the Group’s ordinary activities. Adjusting items include
management restructuring costs in the year. See Note 5
for further details.
Profit before tax for
the year
increased by 47% to £5.2m
(2022: £3.5m)
£5.2m
+47%
Year-end cash balance
increased to £7.5m
(2022: £2.9m), with the Group
remaining debt free
£7.5m
+155%
£7.5m
2023
2022
£5.2m
£3.5m
2023
2022
£2.9m
Licensing segment generated £11.3m
EBITDA (2022: £8.0m)
2023
2022
£11.3m
£8.0m
Social publishing segment generated
£0.8m EBITDA (2022: £1.5m)
2023
2022
£0.8m
£1.5m
Head office costs were £2.9m (2022: £2.0m)
and excluding share option and related
charges were £2.4m (2022: £1.8m)
2023
2022
£2.9m
£2.0m
2023 Operational Highlights:
2023 Operational Highlights:
Portfolio of proprietary games
Portfolio of proprietary games
on the Group’s remote game
on the Group’s remote game
server (“RGS”) grew to 75
server (“RGS”) grew to 75
(2022: 65)
(2022: 65)
Launched with 44 new partners
Signed licensing deals with
for Slingo Originals content
Tetris, Relax Gaming and WMG
including Bet 365, Betclic, OLG
(Provincial Lottery in Ontario)
and PENN Entertainment in New
Jersey, Michigan and Pennsylvania
Granted iGaming Supplier
Submitted iGaming Supplier
Licenses in West Virginia,
Licenses in British Columbia,
Sweden and Greece
West Virginia, Sweden and
Greece, and the Company was
granted these licenses in West
Virginia, Sweden and Greece
Signed licensing deals with
Launched Slingo Space
Tetris, Relax Gaming for Money
Invaders and Slingo Tetris,
Train and WMG for Fowl Play, a
collaborating with two iconic
leading slot game in the Italian
games brands
market
Launched with 44 new
Launched in the regulated
partners for Slingo Originals
market in Portugal
content including Bet 365,
Betclic, OLG (Provincial Lottery)
and Barstool in New Jersey,
Michigan and Pennsylvania
Increased unique players in
Gained ISO 27001 certification,
content licensing business by 24%
an internationally recognised
standard for managing
information security
Increased unique players in
Launched Slingo
content licensing business
Space Invaders
by 24%
and Tetris Slingo,
collaborating with two
iconic games brands
1 EBITDA is profit before interest, tax, depreciation and amortisation and is a non-GAAP measure. The Group uses
Gained ISO27001
certification,
EBITDA and Adjusted EBITDA to comment on its financial performance. Adjusted EBITDA is EBITDA excluding share
option and related charges and adjusting items, which are significant, non-recurring items outside the scope of the
an internationally
Group’s ordinary activities. Adjusting items include management restructuring costs in the year. See Note 5 for
recognised standard for
further details.
managing information
security
Continued investment
in our proprietary RGS
platform with the launch
of free rounds product
Grew the 4ThePlayer
library of games
distributed on our
network to 7 (2022: 3)
Corporate GovernanceFinancial Statements 2
Gaming Realms plc Annual Report and Accounts 2023
At a Glance
As the creator of a variety of Slingo™, bingo, slots and
other casual games, we use our proprietary content
to create a “Slingo” genre of games for our partners
internationally. Gaming Realms has partnered with
some of the most successful and popular global
platforms and operators.
Innovation
Gaming Realms
develops, publishes
and licenses mobile
gaming content.
Integrated Game Development, Licensing and Publishing
Game
development
Brand
licensing
Game
licensing
Brand
partnerships
2 Mobile Games Studios
• London, United Kingdom
• Victoria, Canada
IP Licensor
• North American Lottery Printed
Scratch Games – Scientific
Games
• Multi-player Bingo - Entain
• Global Lottery Mobile Instant
Games – IWG
• Social Slot Games – Zynga Inc.
• iGaming Library – US, UK
and EU
– US – BetMGM, DraftKings,
RSi, Golden Nugget, Betfair/
Fanduel, Caesars Interactive,
Resorts, Hardrock, Ocean
Resorts, Bally’s, Boyd
Interactive, Pokerstars
and PlayStar
– Europe – Bally’s, Entain,
Sky Betting & Gaming,
Paddy Power Betfair, 888,
Skill On Net, Rank, 32 Red,
William Hill, Kindred, Buzz
Bingo, Jumpman, Mr Q,
Whitehat, Leo Vegas, Betsson,
Pokerstars, Betway, Bet365,
Sisal, Goldbet, Lottomatica,
Snaitech, Betclic, Superbet
• Banijay - Deal or No Deal
• Fremantle - Britain’s Got
Talent, The X Factor,
The Price Is Right
• Sony – Who Wants to Be a
Millionaire
• Scientific Games – Rainbow
Riches
• Inspired Entertainment –
Centurion, Reel King
• NetEnt – Starburst
• King Show Games – Lucky Larry
Lobstermania, Stinkin’ Rich,
Hot Roll
• Playtech – Fluffy Favourites
• Everi – Shark Week
• IGT – Da Vinci Diamonds,
Cleopatra
• Pragmatic Play – Sweet Bonanza
• Warner Discovery – Deadliest
Catch
• Tetris – Tetris
• Relax Gaming – Money Train
• WMG – Fowl Play
• Taito – Space Invaders
Growing international partners
Strategic Report
3
International growth in regulated markets
Regulated markets
Live
2024
British Columbia, CA
Ontario, CA
Quebec, CA
Sweden
Lithuania
Denmark
Great Britain
Switzerland
Italy
Spain
Pennsylvania, USA
Connecticut, USA
New Jersey, USA
West Virginia, USA
Michigan, USA
Mexico
Colombia
Growing US iGaming Market
We are focusing on the growing North American market.
Estonia & Latvia
The Netherlands
Romania
Greece
Malta
South Africa
$600
$500
$400
$300
$200
$100
R
G
G
M
$
$M
Feb 2 2
M ar 2 2
Apr 2 2
M ay 2 2
Jun 2 2
Jul 2 2
Aug 2 2
Sep 2 2
O ct 2 2
N ov 2 2
D ec 2 2
Jan 2 3
Feb 2 3
M ar 2 3
Apr 2 3
M ay 2 2
Jun 2 3
Jul 2 3
Aug 2 3
Sep 2 3
O ct 2 2
N ov 2 3
D ec 2 3
Jan 2 4
New Jersey
Michigan
Pennsylvania
Connecticut
West Virginia
Delaware
Source: Vixio Gambling Compliance: State gaming commissions report – Jan 2024
Key focus areas
Original Game Content
& IP Development
We build original content from
our London and Vancouver Island
Strategic Partners and
Licensing
Partners include Banijay, Zynga,
IWG, Inspired Entertainment, IGT,
Responsible Gambling
Gaming Realms is committed to
providing an environment for
customers to play responsibly and
game studios incorporating social meta
games and real money mechanics with
Slingo and other well-known brands.
Advanced Mobile Gaming
Platform
We have invested significantly
in our Remote Gaming Server
(“RGS”), which hosts and distributes our
game portfolio. The scalable platform
facilitates future growth through existing
infrastructure for new games and
distribution.
King Show Games and Scientific Games.
Not only do we leverage our own IP across
multiple brands, but we also license Slingo
into markets adjacent to the Group’s core
mobile gaming business.
Highly Experienced Team
As we have transitioned our core
focus to the licensing business,
we have built up a high-quality
management team of sector specialists to
drive the implementation of our strategy.
Data and Algorithmic
Optimisation
“It’s all about the data” – we put
the customer first, developing
engaging content and using data to enhance
the development feedback loop.
securely. Since commencing operations, we
have had measures in place to encourage
responsible play – to keep it fun – and have
provided tools to help keep customers’
gaming and spending within their control.
In addition, we fund research, education
and treatment of problem gambling through
donations to GambleAware.
We always ensure that Responsible Gambling
is at the heart of our game design process
and have built a tool for both our partners
and players to set their own limits on stakes
and features within games. We only contract
with licenced partners, ensuring that the
players are given a high level of protection
through these operators. As our games are
certified in highly regulated markets such
as the US, UK and Sweden, the standards
we have to provide for our games and RGS
systems in terms of player protection are
already set to an incredibly high level.
Corporate GovernanceFinancial Statements
4
Gaming Realms plc Annual Report and Accounts 2023
Executive Chairman’s Statement
The Company continues to deliver on its proven strategy
29%
£10.1m
Adjusted EBITDA
(2022: £7.8m)
As we reflect on another record year,
it is with a sense of achievement and
optimism that I present the Chairman’s
Statement for Gaming Realms for the
year ended 31 December 2023. Despite
the challenges posed by a dynamic
market environment, our Company has
demonstrated resilience, innovation,
and strategic foresight, cementing our
position as a leading games studio in the
international regulated igaming market.
During the year, our platform handled
wagering of £5.5bn vs £4.7bn in the
prior year.
Financial Performance Highlights
In 2023, Gaming Realms achieved
significant financial milestones,
reflecting our commitment to delivering
sustainable growth and shareholder
value. Our revenue saw an impressive
increase of 26% to £23.4m (2022:
£18.7m), driven by strategic expansion,
innovative product launches, and
engagement with our partners.
Adjusted EBITDA improved markedly
to £10.1m (2022: £7.8m), up 29%
from the previous year, highlighting our
operational efficiencies and prudent cost
management.
Profit before tax reached £5.2m, a
testament to our robust business model
and the effectiveness of our strategic
initiatives. Our balance sheet remains
strong, with a healthy cash position of
£7.5m (2022: £2.9m) and no debt,
ensuring that we are well-placed to
pursue future growth opportunities and
navigate any market uncertainties.
Strategic Achievements
2023 was a year of strategic
advancement for Gaming Realms. We
expanded our footprint in key markets
and launched new gaming titles that
have been met with enthusiasm by
players globally. Our focus on new
engaging mechanics for our Slingo
category of games has allowed us
to capture new segments of the
market and drive user engagement to
unprecedented levels.
Partnerships have been central to our
strategy, and this year we have forged
significant collaborations with industry
leaders, expanding our distribution
channels and enhancing our product
offerings. This has allowed us to grow
in all our key markets. Our commitment
to responsible gaming and sustainability
has also been a priority, as we continue
to invest in technology and initiatives
that promote a safe and ethical gaming
environment.
Looking Back
2023 completed five years of remarkable
progress for Gaming Realms, with an
adjusted 2019 EBITDA loss of £0.3m
improving annually to an adjusted
EBITDA surplus of £10.1m in 2023.
This is principally as a result of the 48%
compound growth rate in our licensing
revenue, a growth from £4.1m in 2019
to £19.9m in 2023.
“We expanded our footprint in key markets and
launched new gaming titles that have been met
with enthusiasm by players globally.”
Michael Buckley
Executive Chairman
Strategic Report
5
Our Company has demonstrated
resilience, innovation, and strategic
foresight, cementing our position
as a leading games studio in the
international regulated igaming market.
Looking Ahead
As we look to the future, Gaming
Realms is positioned for continued
success. The investments we have
made in technology, talent, and market
expansion set a solid foundation for
growth. We remain committed to
innovation, with several exciting new
products in the pipeline that promise
to redefine the gaming experience for
our users.
Our strategic focus for the coming year
will be on expanding our international
presence, while growing in our existing
markets, as well as delivering an
innovative Slingo roadmap. We will
also continue to prioritise our social
responsibilities, ensuring that we
contribute positively to the communities
we serve.
Acknowledgements
On behalf of the Board, I extend our
thanks to our employees, whose
commitment, creativity, and hard
work have been instrumental in our
achievements. I would also like to thank
our shareholders for their continued trust
and support.
As we move forward, we do so with
confidence, guided by a clear strategy
and a commitment to excellence. I am
optimistic about the future of Gaming
Realms plc and look forward to sharing
our continued progress in the years
to come.
Michael Buckley
Executive Chairman
28 March 2024
Corporate GovernanceFinancial Statements 6
Gaming Realms plc Annual Report and Accounts 2023
Chief Executive’s Review
An increased international demand for Slingo Originals portfolio
Introduction
The Group continued its strong
momentum in 2023, increasing revenues
by 26% to £23.4m (2022: £18.7m), and
Adjusted EBITDA before share option
and related charges and adjusting items
by 29% to £10.1m (2022: £7.8m).
We continue to expand our Slingo
Originals game portfolio, which grew
by 10 games and now stands at 75,
as well as producing bespoke games
for our partners. We are investing in
our proprietary Remote Game Server
“RGS” platform to ensure it scales with
the business into new markets and with
new operators. Continuing to innovate
around our unique Slingo IP and RGS
will allow Gaming Realms to deliver on
its strategy and continue its impressive
growth.
This strong performance was driven by
revenue growth of 33% in our licensing
business to £19.9m (2022: £14.9m)
as a result of the increased demand for
our Slingo content. The combination of
growing the distribution of our games via
our RGS, close control of overheads and
the operational leverage of the Group
led to the licensing business achieving a
58% Adjusted EBITDA margin.
Licensing business
The focus of the Group remains to
deliver growth in its content licensing
business. The continued expansion
of our Slingo portfolio and growth in
distribution through more operators in
Europe and North America underpinned
our performance throughout the year.
Content licensing revenues grew 30% in
2023 and we increased unique player
numbers in the year by 24% to 5 million
(2022: 4 million).
Our distribution business, where we
are launching third-party slots, which
complement our Slingo offering, grew
in the year with 4ThePlayer and we
also produced the first two games in
partnership with ReelPlay. This is allowing
us to utilise the wide distribution on
our platform to take market leading
slot games into the US market. We are
encouraged by the launch of 4ThePlayer
and, together with games from ReelPlay,
expect to see this area of the business
grow.
Our growth in Europe has been a
combination of launching with new
partners and growing with existing ones.
During the year, our library of proprietary
games increased to 75 and we went
live with 44 new partners, all of whom
licensed the Company’s Slingo Originals
content. This illustrates the strong
demand for our gaming content and our
ability to offer something different to the
rest of the market with our unique Slingo
format. We have been able to launch
bespoke games with operators which
has allowed our portfolio to increase its
promotion. Slingo has also become its
own games category, which has been
a great asset for our partners in their
promotions and marketing.
Some of the most notable games
released during the period included
Slingo Cleopatra with IGT, a partnership
with one of the leading suppliers of
online and land-based casino games, and
two of the largest video game brands
with Slingo Space Invaders and Tetris
Slingo.
North America
2023 was the year when we
consolidated our position in the US and
Canada, with our content licensing
revenues from these markets growing
26% to £8.1m (2022: £6.4m). We have
been able to launch with operators
over multiple states including Pokerstars
launching in three markets, Caesars
Entertainment in four markets and PENN
Entertainment in five markets.
In March, we launched with our second
Canadian lottery when our games first
went live with the Ontario Lottery and
Gaming Corporation.
We also continued to launch more
content in New Jersey, Michigan and
Pennsylvania as we grew in these
markets. We still expect to gain a
higher market share in Michigan and
Pennsylvania, where we have 37 and 27
games live respectively, compared to
“The early indicators for 2024 are promising, with
growth already observed in the initial months and,
with a robust pipeline of opportunities, we are
poised for continued success and innovation.”
Mark Segal
Chief Executive Officer
Strategic Report
7
During the year, our library of proprietary games
increased to 75 and we went live with 44 new
partners, all of whom licensed the Company’s
Slingo Originals content.
the 65 games live in New Jersey. Ontario
is continuing to grow quarterly, and we
ended the year with our record month in
that market.
We have also seen great success with our
bespoke games in North America. This
has been led by our Slingo Red Wings
game which BetMGM is using to acquire
and retain players off the back of a
promotion with the Detroit Red Wings.
Europe
Our growth in Europe has been a
combination of launching with new
partners and growing with existing ones.
We have taken existing partners into new
markets and we have launched Slingo
content with 888 in Italy and Romania.
We have also launched with market
leading partners including Bet365 in the
UK, Fortuna Group in Romania, Mr Green
in Denmark, Sweden and Spain and with
Betclic in Portugal.
Revenues in Europe increased 33% to
£10.5m in 2023 (2022: £7.9m) with
increases in all our key markets of the UK,
Italy, Spain and the Netherlands. We are
still launching with new partners in these
markets as we expand the audience of
Slingo games.
In December 2023, we obtained our
supplier licence in Greece where we
expect to go live with our first partner
shortly. This follows launching in the
regulated Portuguese market in the third
quarter of 2023.
Social
Our social business remains a key part
of our activities as we bring the Slingo
games to a wider audience. Revenue
from social decreased by 5% to £3.5m
(2022: £3.7m) whilst EBITDA reduced to
£0.8m (2022: £1.5m). Social continued
to make a cash contribution to the
business.
Post Period End and Outlook
We continue to deliver on our clear
strategy and Gaming Realms continues
to focus on the following areas:
• International expansion – particularly in
the US and European regulated markets
• Adding new distributors, operators and
licensors
• Further penetration with existing
distributors and operators driven by
new games
I am pleased to see that Gaming Realms
has continued to grow in the year to
date, with content licensing revenues
up 20% in the two months post-year-end
compared with the same period in 2023.
We have launched three games so far
this year, including China Shores Slingo
and the launch of Slingo Constitution
Hill for the Cheltenham Festival and have
gone live with 14 new partners.
The early indicators for 2024 are
promising, with growth already observed
in the initial months and, with a robust
pipeline of opportunities, we are poised
for continued success.
Mark Segal
Chief Executive Officer
28 March 2024
24%
5 million
Unique player numbers
in the year
(2022: 4 million)
Corporate GovernanceFinancial Statements
8
Gaming Realms plc Annual Report and Accounts 2023
Financial Review
Scaled growth in new and existing regulated markets
Gaming Realms had another strong
year in 2023, continuing to deliver on
the Group’s core strategy of scaling
the licensing business through entry
into newly regulated jurisdictions and
enhancing the unique Slingo games
portfolio.
The Group delivered record revenue
and EBITDA, while also converting this
performance into cash, ending the year
with a cash balance of £7.5m (2022:
£2.9m).
We have also continued to invest in
the future success of the business, with
increased development spend on the
Group’s platform, distribution reach and
pipeline of games content.
Performance
Total Group revenue increased 26% to
£23.4m (2022: £18.7m), principally as
a result of the continued growth in the
licensing segment and in particular the
content licensing business.
The Group generated EBITDA of £9.2m
(2022: £7.4m) and Adjusted EBITDA of
£10.1m (2022: £7.8m).
2023
Revenue
Other income
Marketing expense
Operating expense
Administrative expense
Adjusted EBITDA
Share option and related charges
Adjusting items
EBITDA
Amortisation of intangible assets
Depreciation of property, plant and equipment
Finance expense
Finance income
Profit before tax
2022
Revenue
Other income
Marketing expense
Operating expense
Administrative expense
Adjusted EBITDA
Share option and related charges
EBITDA
Amortisation of intangible assets
Depreciation of property, plant and equipment
Finance expense
Finance income
Profit before tax
Adjusted EBITDA is EBITDA before
share option and related charges, and
adjusting items. A reconciliation between
EBITDA and Adjusted EBITDA is shown
below. Management considers Adjusted
EBITDA the most appropriate measure
to comment on the Group’s underlying
financial performance.
2023
£
2022
£
EBITDA
9,235,802
7,446,038
Share option and
related charges
632,304
351,726
Adjusting items
193,859
-
Adjusted EBITDA
10,061,965
7,797,764
The £0.2m adjusting item relates to a
management restructure in the year
(2022: £Nil), which is considered by
Management as significant, non-recurring
and outside the scope of the Group’s
ordinary activities, so has been presented
as an adjusting item.
The £1.8m increase in EBITDA generated
in 2023 compared with the prior year has
seen the Group record another
record profit before tax of £5.2m (2022:
£3.5m), an increase of £1.6m.
Operating expenses are largely revenue
related costs including license fees,
hosting costs and platform provider fees.
Total Group operating expenses were
£4.8m, a 24% increase over the £3.9m
in the prior year, driven by the growth in
licensing segment revenues.
Administrative expenses increased to
£8.2m (2022: £6.9m) predominantly due
to increased staff costs across the business
required to deliver on the Group’s growth
strategy, along with other incremental
business expansion costs.
Share option and related charges were
£0.6m in 2023 (2022: £0.4m).
The following table sets out the split of
revenue, Adjusted EBITDA, EBITDA and
profit before tax by segment, which is
discussed further below.
Licensing
£
19,917,366
-
(94,533)
(3,442,127)
(4,763,369)
11,617,337
(103,425)
(193,859)
Social Publishing
£
3,504,157
139,562
(338,030)
(1,359,340)
(1,141,114)
805,235
(9,927)
-
Head office
£
-
-
(96,110)
-
(2,264,497)
(2,360,607)
(518,952)
-
11,320,053
795,308
(2,879,559)
(2,488,290)
(70,537)
(17,279)
96,280
8,840,227
Licensing
£
14,937,036
-
(38,391)
(2,579,127)
(4,176,964)
8,142,554
(149,753)
7,992,801
(1,996,909)
(60,215)
(10,087)
26,658
5,952,248
(930,857)
(70,580)
(17,688)
(444,661)
(135,142)
(8,956)
2,820
16,425
(220,997)
(3,451,893)
Social Publishing
£
3,690,485
112,147
(17,164)
(1,308,520)
(1,001,569)
1,475,379
(1,666)
1,473,713
(943,384)
(59,822)
(11,239)
Head office
£
23,000
-
(78,244)
-
(1,764,925)
(1,820,169)
(200,307)
(2,020,476)
(731,086)
(138,478)
(372,716)
-
375,000
459,268
(2,887,756)
Total
£
23,421,523
139,562
(528,673)
(4,801,467)
(8,168,980)
10,061,965
(632,304)
(193,859)
9,235,802
(3,863,808)
(276,259)
(43,923)
115,525
5,167,337
Total
£
18,650,521
112,147
(133,799)
(3,887,647)
(6,943,458)
7,797,764
(351,726)
7,446,038
(3,671,379)
(258,515)
(394,042)
401,658
3,523,760
Strategic Report
9
26%
29%
155%
£23.4m
Group revenues
(2022: £18.7m)
£10.1m
Adjusted EBITDA
(2022: £7.8m)
£7.5m
Year-end cash balance
(2022: £2.9m)
Licensing
Total licensing segment revenues
increased 33% to £19.9m (2022:
£14.9m), which can be broken down
as follows:
• Content licensing revenue growth of
30% to £18.6m (2022: £14.3m); and
• Brand licensing revenue increased 110%
to £1.3m (2022: £0.6m).
The segment contributed £11.6m
Adjusted EBITDA in 2023 (2022: £8.1m).
The amortisation charge for the year
increased to £2.5m (2022: £2.0m),
reflecting the increased investment in
development spend in the segment
in recent years. Demonstrating this,
capitalisation of development spend in
the licensing segment increased 24% on
the prior year to £3.8m (2022: £3.1m)
as the business invests in its RGS platform
and content. The impact of the segments
increase in EBITDA offset by the increase
in amortisation means the segment
delivered a profit before tax of £8.8m
(2022: £6.0m).
the business such as Switzerland and
South Africa, the Group is well placed
to take advantage of further growth
opportunities in 2024.
The high margin nature of content
licensing revenues gives the business
strong operational leverage. This is
demonstrated by the 22% increase in
total segmental expenses (excluding share
option and related charges and adjusting
items) to £8.3m (2022: £6.8m), while
content licensing revenues have increased
at a notably higher rate, 30% over the
prior year.
The Group released 10 new Slingo games
to the market during 2023, including
Slingo Space Invaders and Tetris Slingo,
along with a series of bespoke Slingo
branded games for our partners. Slingo
continues to prove highly popular with
our partners and players. Slingo is a
unique genre of game in the market,
which is driving engagement with
partners.
Content licensing
Content licensing remains the core focus
of the Group, with the growth strategy
being expansion into new markets as
they regulate, growing our unique
Slingo games portfolio and developing
deeper relationships with our partners to
maximise value and engagement.
Despite there being no material new
markets entered during 2023, content
licensing revenue increased 30% to
£18.6m (2022: £14.3m). This has been
achieved through a blend of launching
with 44 new partners in our current
markets, delivering exciting and premium
quality games during the year, and greater
penetration with our existing partners.
The 44 new partners we went live with
during the year were across a number of
global markets, with 24 in North America
and 20 in Europe. A further 14 partners
have gone live in 2024 to date.
In the second half of 2023 the Group
was granted supplier licenses in both
West Virginia, USA and Greece. Along
with other planned new markets for
“We have also continued to invest in the future
success of the business, with increased development
spend on the Group’s platform, distribution reach
and pipeline of games content.”
Geoff Green
Chief Financial Officer
Corporate GovernanceFinancial Statements 10
Gaming Realms plc Annual Report and Accounts 2023
Financial Review
Scaled growth in new and existing regulated markets
We continue to partner with leading
brands that will complement the Slingo
format. During 2023 we launched
exciting Slingo game collaborations
with partners such as Tetris, King Show
Games and Taito. A number of further
agreements have been entered into to
bring new Slingo collaborations to market
in 2024, including Fowl Play and Gold
Cash.
Revenues from North America continued
to significantly grow for the content
licensing business. Revenue from these
markets in 2023 was £8.1m, a 26%
increase on the £6.4m in the prior
year. The region represents 43% of total
content licensing revenues (2022: 45%).
As new US states regulate igaming and
we make further progress in the existing
markets, we would expect the region to
grow in prominence for the business.
Brand licensing
The increase in brand licensing revenues
in 2023 compared with the prior year is
predominantly the result of two brand
deals completed in the year, including a
deal with Entain to launch Slingo Bingo
which went live in May 2023.
The Group’s Slingo brand is well-known by
consumers, which allows us to license this
brand into adjacent markets where the
right opportunities arise, such as physical
and digital lottery scratch games.
Social publishing
The Group’s social publishing business
reported a 5% reduction in revenues to
£3.5m (2022: £3.7m).
During the year £0.3m was invested in
marketing spend in the segment with
the aim of driving player activity and
engagement.
As a result, the segment delivered £0.8m
Adjusted EBITDA for the year, falling from
£1.5m in the prior year.
The amortisation charge related to the
social publishing segment for the year was
£0.9m, a 1% reduction on the prior year
(2022: £0.9m).
Cashflow and Balance Sheet
The Group’s cash balance increased
by £4.5m in 2023 to £7.5m at 31
December 2023 (2022: £2.9m).
expand the Group’s unique game
portfolio across both segments and
develop the Group’s proprietary RGS
platform with enhanced capabilities, scale
and features.
Aside from the £4.6m development
costs capitalised in the year discussed
above, the remaining movement in
cash is substantially explained by the
£9.3m (2022: £6.5m) cash inflow from
operating activities. A reconciliation
between profit for the year and cash from
operating activities is provided below.
The Group remains debt free, following
the full repayment of the convertible loan
to Gamesys Group in the prior year.
Net assets totaled £24.4m (2022:
£17.9m).
The Group capitalised £4.6m (2022:
£4.0m) into intangible assets as
development costs during the year.
This £0.6m increase over the prior year
represents an increase in investment in
both the licensing and social publishing
segments. This investment is to both
Cash flows from operating activities
Profit for the financial year
Adjustments for:
2023
£
2022
£
5,925,003
3,614,115
Depreciation of property, plant and equipment
276,259
258,515
Loss on disposal of property, plant and equipment
1,571
-
Amortisation of intangible fixed assets
Other income
Other income received during the year
Finance income
Finance expense
Tax credit
Exchange differences
Share based payment expense
3,863,808
3,671,379
(139,562)
(112,147)
185,184
121,962
(115,525)
(401,658)
43,923
394,042
(757,666)
(90,355)
(105,268)
54,013
419,961
438,868
Operational costs increased by 4% from
the previous year to £1.4m (2022:
£1.3m) as a result of increases in the cost
of hosting and third-party content fees.
The segment continues to have a stable
underlying cost base, with administrative
expenses of £1.1m (2022: £1.0m).
Decrease / (increase) in trade and other receivables
368,986 (1,973,278)
Increase in trade and other payables
Decrease in other assets
244,710
607,560
-
11,848
Net cash flows from operating activities before taxation
10,211,384
6,594,864
Net tax paid in the year
(935,660)
(45,213)
Net cash flows from operating activities
9,275,724
6,549,651
Strategic Report
11
Going concern
In adopting the going concern basis of
preparation in the financial statements,
the Directors have performed both
qualitative and quantitative assessments
of the associated risks facing the business
and its ability to meet its short and
medium-term forecasts. The forecasts
were subject to stress testing to analyse
the reduction in forecast cash flows
required to bring about insolvency of the
Company unless capital was raised. In
such cases it is anticipated that mitigation
actions, such as reduction in overheads
could be implemented to stall such an
outcome.
The Directors confirm their view that they
have carried out a robust assessment of
the emerging and principal risks facing
the business. As a result of the assessment
performed, the Directors consider that
the Group has adequate resources to
continue its normal course of operations
for the foreseeable future.
Dividend
During the year, Gaming Realms did not
pay an interim or final dividend. The
Board of Directors are not proposing a
final dividend for the current year as we
continue to execute our strategy and
invest in the growth of the business.
Corporation and deferred taxation
The current year tax credit of £0.8m
(2022: £0.1m) largely relates to the
recognition of an additional £1.6m
deferred tax asset (see Note 13) and
£0.7m corporation tax charge in overseas
jurisdictions (2022: £0.3m).
The Group
delivered record
revenue and
EBITDA, while also
converting this
performance into
cash.
Geoff Green
Chief Financial Officer
28 March 2024
The high margin nature of content
licensing gives the business strong
operational leverage.
Corporate GovernanceFinancial Statements 12
Gaming Realms plc Annual Report and Accounts 2023
Engaging with Stakeholders
The Board recognises that Gaming
Realms has a number of stakeholders,
including shareholders, customers,
employees, suppliers and regulators. The
Board is cognizant of its responsibility
to understand each of their views and
does this through a variety of methods,
which are continually reviewed to
remain effective. Updates are provided
and discussed at Board and relevant
Committee meetings. Throughout
this Annual Report, we have provided
information on some of the initiatives
and approaches undertaken in relation to
stakeholder engagement by the Group
during 2023.
Section 172 statement
The Board of Directors, in line with their
duties under section 172 (“s172”) of
the Companies Act 2016, act in a way
they consider, in good faith, would be
most likely to promote the success of the
Company for the benefit of its members
as a whole, and in doing so have regard to
a range of matters when making decisions
for the long term. Key decisions and
matters that are of strategic importance
to the Company are appropriately
informed by s172 factors.
Section 172 of the Companies Act
2006 requires Directors to take into
consideration the interests of stakeholders
and other matters in their decision
making. The Directors continue to have
regard to the interests of the Company’s
employees and other stakeholders,
the impact of its activities on the
community, the environment and the
Company’s reputation for good business
conduct, when making decisions. In this
context, acting in good faith and fairly,
the Directors consider what is most
likely to promote the success of the
Company for its members in the long
term. We explain in this Annual Report,
and below, how the Board engages with
stakeholders.
The Board regularly reviews the
Company’s principal stakeholders
and how it engages with them. This
is achieved through information
provided by management and also by
direct engagement with stakeholders
themselves.
Shareholders
The Board is committed to maintaining constructive dialogue with shareholders and ensuring that it has a deep understanding
of their views. It also recognises that shareholders consider a range of environmental, social and governance matters. The Chair,
Chief Executive Officer and Chief Financial Officer, on behalf of the Board, meet shareholders regularly and report to the Board
on these discussions. All Directors are also available to meet institutional investors on request.
Some of the activities undertaken during 2023 are summarised below:
• The Company has engaged with an Investor Relations consultant.
• The Chair engaged with key shareholders on corporate governance matters.
• The Non-Executive Directors have engaged with stakeholders during the year.
• Private individual shareholders were communicated with via the Company Secretary.
• The Chairman, Chief Executive Officer and Chief Financial Officer have conducted a number of “online” presentations and
interviews in order to have greater transparency with shareholders.
AGM
All three of our Executive Directors attended the 2023 AGM and an average of 42% of the total issued share capital was voted
across all resolutions. Shareholders were given the opportunity to send in questions in advance to be answered by the directors
at the 2023 AGM on the Group’s strategy and future outlook.
The 2024 AGM will be held on 12 June 2024. Separate resolutions are proposed on each item of business.
Website and shareholder communications
Further details on the Group, our business and key financial dates can be found on our corporate website:
www.gamingrealms.com
Players
We always ensure that Responsible Gambling is at the heart of our game design process and have recently built a tool for
operators to configure stakes within games in order to manage their players responsibly. We only contract with licensed
partners, ensuring that the players are given a high level of protection through these operators. As our games are certified in
highly regulated markets such as the UK, USA and Sweden, the standards we have to provide for our games and RGS systems in
terms of player protection is already set to an incredibly high level.
Strategic Report
13
Customers
We are providing our customers with an increasing portfolio of unique games each year. We are making significant improve-
ments to our platform in order to prepare for large scale growth.
We ensure our games and platform are fully tested before each new launch and adhere to any regulations required for them.
Trust is important to our customers and their end users, and our competitive customer offering is maintained through our
unique Slingo IP, together with constant communication and emphasis on accounts management.
We have invested in account managers who work closely with our B2B partners to ensure good relationships and that we get
maximum exposure for our content.
Employees
Employee engagement is critical to our future success. In a year of hybrid remote working, our employees have worked hard to
support the business and sustain our culture.
Empowerment, career development, health and well-being and social responsibility are all areas our employees have told us
they consider important in the workplace.
The Board gains an understanding of the views of our employees and the culture of the organisation through visits to our
offices, one-to-one meetings, Board presentations and via assessment of office wide engagement scores and views.
We continue to monitor and develop our approach to performance management, to promote a culture of continuous
improvement.
As a method of retaining its Executive Team, senior management and key employees, the Group issues share options linked to
future service periods. During the year the Group granted 3.5 million such options (see Note 23) to its Executive Directors and
certain employees.
Suppliers
We have established long-term partnerships that complement our in-house expertise and have built a network of specialised
partners within the industry and beyond.
We have an open, constructive and effective relationship with all suppliers through regular meetings which provide both parties
the ability to feedback on successes, challenges and the future roadmap.
Our procurement policy includes a commitment to sustainable procurement and mitigation against the risk of modern slavery,
anti-bribery and corruption, and data protection/privacy breaches across our supply chain. We aim to operate to the highest
professional standards, treating our suppliers in a fair and reasonable manner and settling invoices promptly.
We regularly monitor the relationship and engagement approach with our third-party suppliers.
Regulators
We have an open and transparent dialogue with the regulatory and industry bodies that we work with.
The Group has a compliance team to ensure that all regulatory guidelines are met in its gambling operations. The Group also
maintains close legal counsel to advise on any changes to the regulatory framework, as well as updates on territories currently
outside the Group’s activities.
We have spent 2023 working with the Regulators on our successful applications for supplier licenses in West Virginia, Greece
and Sweden, as well as our pending application in British Columbia.
Corporate GovernanceFinancial Statements 14
Gaming Realms plc Annual Report and Accounts 2023
Principal Risks and Uncertainties
The Board constantly monitors and assesses risks and uncertainties within the Group’s trading activities. There will always be a
level of risk that needs to be evaluated against the Group’s potential returns in any activity.
Risk
How this Risk is managed
Regulatory and Legislation
Online gambling and gaming are subject to a dynamic and complex
regulatory regime.
The Group now holds supplier licences from the following regulators;
• UK Gambling Commission;
• New Jersey Division for Gaming Enforcement;
• Michigan Gaming Control Board;
• Pennsylvania Gaming Control Board;
• Connecticut Department of Consumer Protection;
• Alcohol and Gaming Commission of Ontario;
• National Gambling Office of Romania;
• Malta Gaming Authority;
• Swedish Gambling Authority;
• Greek Hellenic Gaming Commission; and
• West Virginia Lottery Commission.
The Group is part way through the process of acquiring a supplier
license in British Columbia, and will be pursuing further licenses in
regulated markets in 2024, with a focus on U.S. markets as they open.
In late 2020, the UK Government launched a review of the Gambling
Act 2005, with the aim to ensure it is “fit for the digital age”. The
initial findings report was published in 2023, however the detailed
consultations on each section are still ongoing, with new guidance and
regulations yet to be issued.
It is key to the Group to maintain compliance with all licences and
any new ones that are required. These are critical to the continuing
operation of the Group’s gambling activities and also the production
and supply of its unique content into both its operations and other third
parties.
The Board considers this to be a greater risk than the previous year due
to the Group operating in more regulated territories and the potential
disruption in the UK market.
Taxation Risk
From the end of 2014, the gaming industry has been subject to point
of consumption tax in relation to gambling activities within the UK.
The rate increased to 21% in April 2019. There is a risk that increased
gaming duty or taxes in the UK or other significant jurisdictions for the
Group impacts revenues generated.
The Board considers this risk to remain static with the previous year.
Residency
The Group has legal entities in several jurisdictions, including US,
Canada, Malta and the UK.
The Board considers this risk to remain static with the previous year.
Competition
The online and free to play gaming markets are highly competitive in
North America and Europe. Failure to be able to hold a competitive
advantage would result in attracting less players and have lower
engagement on our apps and sites.
The Board considers this risk to remain static with the previous year.
The Group has a compliance team to ensure that all regulatory
guidelines are met in its gambling operations, including any potential
changes arising from the UK Government’s review of the Gambling
Act 2005. The Group also maintains close legal counsel to advise
on any changes to the regulatory framework, as well as updates on
territories currently outside the Group’s activities.
The licensing business operates in multiple jurisdictions reducing the
impact of individual jurisdiction specific tax changes. The tax liability
is borne by the operator.
The Group has undertaken a detailed transfer pricing exercise to
ensure that revenue and profits are attributed correctly between the
operating locations and continues to monitor taxation policies in all
jurisdictions.
In following the Group’s strategy of developing new unique IP and
content, the Group feels well placed to be able to compete in the
markets it operates in. It invests significant resource to be able to
improve its development and operations. We have protected the
Slingo mark and game mechanics through various registered marks
and patents that the Group owns.
Diverse products and geographies also help to diversify the risk.
Strategic Report
15
Risk
How this Risk is managed
Time to Market
The Group invests highly in technology and bringing new products
and games to market. A delay in time to market will result in a loss of
competitive advantage, a loss in potential revenue and also increasing
cost of development.
The Group has invested highly in having a dual product track to allow
its products and games to be ready for both licensing and publishing
exploitation in the same release.
Extensive work is undergone on the planning stage to ensure that
timeframes can be met, and products go live at the highest standard.
The Board considers this risk to remain static with the previous year.
Dependence on technology
As a provider of online gambling services, the Group’s business is reliant
on technology and advanced information systems. If the Group does not
invest in the maintenance and further development of its technology
systems, there is a risk that these systems may not cope with the needs
of the business and may fail. The Group is reliant on the Internet and
is vulnerable to activities such as distributed denial of service attacks,
other forms of cyber-crime and a wide range of malicious viruses.
The Board considers this risk to remain static with the previous year.
Dependence on third-party service providers
The Group engages with a number of providers for cloud-based
technology and remote deployment, as well as other important service
providers. In the event that there is any interruption to the products or
services provided by third parties, problems in supplying the products,
one or more ceased to be provided or are provided on onerous terms to
the Group, this may have an adverse effect on the Group’s business and
performance.
The Board considers this risk to remain static with the previous year.
The Team
The ability to carry out the Group’s strategy is dependent on the
engagement of its senior management team, its technology,
commercial and operations teams. The Group operates with a small
team across 2 main locations.
If key employees leave, there is a risk of loss of knowledge.
The Board considers this risk to remain static with the previous year.
Business disruption
Business disruptions may occur where the Group’s workforce is unable to
work or communicate, including due to pandemics such as COVID-19.
Such disruptions affect the global economy and therefore our B2B
operators and end users, if spending and confidence are significantly
affected.
The Board considers this risk to remain static with the previous year.
The Group continues to invest in its proprietary platform to ensure
the necessary features and functionality meet partner needs. In
addition, it has adopted industry standard protections to detect
intrusions or other security breaches and implements preventative
measures to protect against sabotage, hackers, viruses and other
cyber-crime.
The Group also holds relevant insurance to cover against this.
The Group uses reliable and well-known suppliers and ensures that
contractual agreements with key partners offer adequate protection.
The Group continues to invest in its employees to ensure that it can
attract, recruit and maintain a high-quality team. During the year,
The Group has made a number of hires in key positions to ensure the
team is appropriate for the next phase of the Company’s growth.
The Group actively monitors developments which may affect its
operations and the Directors have taken practical steps to mitigate
disruption this is causing to the business.
The Group’s workforce is predominantly based in the UK, Canada and
the US. We successfully migrated to a home working model during
the pandemic. Our colleagues’ mental and physical well-being is
being closely monitored and managed with training and support for
all employees.
The 2023 Strategic Report on pages 1 to 15 has been approved by the Board of Directors.
On behalf of the Board:
Mark Segal
Chief Executive Officer
28 March 2024
Corporate GovernanceFinancial Statements
1616
Gaming Realms plc Annual Report and Accounts 2023
Board and Executive Management
Michael Buckley
Executive Chairman
Mark Segal
Chief Executive Officer
Geoff Green
Chief Financial Officer
Geoff Green was appointed
as Gaming Realms’ Chief
Financial on 1 February 2023,
having joined the Group in
July 2019 and was previously
Finance Director in support
of the CFO. Prior to Gaming
Realms, Geoff spent 8 years
at BDO LLP, where he qualified
as a chartered accountant
in 2013.
Mark Segal joined Gaming
Realms in May 2013 having
left bwin.party as Finance
Director for the bingo vertical.
Previous to that Mark was
Finance Director of Cashcade
until it was acquired by
PartyGaming plc in July 2009.
Mark was responsible for
the full finance function,
including commercial
negotiations, business
intelligence and operational
support in the business,
and was involved in the sale
to PartyGaming plc and
acquisition by Cashcade of
Independent Technology
Ventures in July 2007. Prior
to joining Cashcade, in May
2005, Mark spent five years
at the accountancy firm
Martin Greene Ravden, where
he qualified as a chartered
accountant in 2003.
Michael Buckley was
Chairman of Cashcade,
founded in 2000. Cashcade
became a leading UK-based
online gaming company prior
to its sale to PartyGaming plc
in 2009 for an aggregate sale
consideration of £96m for
shareholders.
Michael has invested in
and been Chairman of a
number of public companies.
These include SelecTV plc,
a producer of comedy and
comedy drama series for
television such as Lovejoy,
Birds of a Feather and
The New Statesman.
SelecTV invested in a
consortium which in 1991
won the franchise to create
Meridian Television, part of the
ITV Network, of which Michael
was a founding Director. He
was also Chairman of Pacific
Media plc, which invested in a
number of internet backbone
companies in Asia during the
1990s as well as creating a
chain of movie theatres in
South East Asia in partnership
with United Artists Theatre
Circuit Inc. Michael has held
other public and private
company directorships,
having obtained a professional
qualification as a chartered
accountant in the UK.
Corporate Governance
1717
JR
MW
MB
AM
Jim Ryan
Non-executive Director
Mark Wilson
Non-executive Director
Mark Blandford
Non-executive Director
Anna Massion
Non-executive Director
Mark Wilson is a strategic
adviser and investor in media,
gaming and real estate. Mark
has held multiple senior
leadership positions, serving
as CEO of Television Games
Network, Executive Chairman
of Music Choice International,
President of Hubbard Enterprises,
Managing Member of
New Mexico Gaming LLC,
and General Counsel and
Corporate Secretary of
Churchill Downs. He received
a Juris Doctorate from the
University of Louisville.
Mark was the owner of a
traditional ‘bricks and mortar’
bookmaker’s chain for over
15 years, then recognised the
potential of the internet in
the mid 1990’s. In 1998 he
founded Sportingbet.com,
and in 2001 floated the
company on AIM. Mark
stepped down from the Board
of Sportingbet in 2007 before
its eventual sale in 2013 for
£485m, with the assets being
split between William Hill
and GVC. In 2002, Mark was
awarded AIM Entrepreneur of
the Year.
After stepping down from
the board of Sportingbet,
Mark has become an active,
successful and widely followed
investor in the digital pay2play
entertainment space.
On November 1, 2022 Anna
Massion was appointed as
a member of the board of
the Company. Ms. Massion
currently serves as an
Independent Non-Executive
Director on several boards
including Playtech PLC,
PlayAGS, Betmakers AU and
Artemis Strategic Investment
Corp. Previously, Ms. Massion
was a Senior Analyst for PAR
Capital Management from
February 2014 through
June 2019. Ms. Massion has
also served as a Director
of Gaming, Lodging and
Leisure Research at Hedgeye
Risk Management, LLC from
November 2008 through
February 2014, Vice
President/Senior Research
Analyst at Marathon Asset
Management from April 2008
through October 2008 and
at JP Morgan from September
2001 through March 2008
as a Vice President on the
Proprietary Trading Desk
from 2004. Ms. Massion
holds a Bachelor of Science
in Economics, Concentration
in Finance, Minor in Russian
and a Master of Business
Administration in Finance,
Major in Finance from The
Wharton School at the
University of Pennsylvania.
Jim Ryan is the CEO of Pala
Interactive, LLC a real money
gambling operator and B2B
platform provider focused
on the US regulated online
gaming market. Prior to
Pala Interactive, Jim was the
Co-CEO of bwin.party digital
entertainment plc. He has
spent the last 23 years of
his career in leadership roles
within the online gaming
sector. Jim has led a number of
the industry’s largest merger
and acquisition transactions
which include the merger of
PartyGaming plc and bwin, the
acquisitions of Cashcade (Foxy
Bingo) and the World Poker
Tour and the sale of St Minver
Limited to GTECH. Jim held
senior posts at four publicly
listed companies. In addition to
his role of CEO of PartyGaming
plc and Co-CEO of bwin.party
digital entertainment plc
he was President and Chief
Executive Officer of Excapsa
Software Inc. and as Chief
Financial Officer of CryptoLogic
Inc. and Chief Financial Officer
of SXC Health Solutions
Corp and was CEO of St. Minver
Limited. Jim also held senior
management posts at Procuron
Inc., Metcan Information
Technologies Inc. and Epson
Canada Limited. Educated at
Brock University (Goodman
School of Business) in Ontario,
Canada, where he obtained
a business degree with first
class honours, Jim obtained
professional qualifications as
a chartered accountant and
certified public accountant
from the Canadian Institute of
Chartered Accountants.
Financial StatementsStrategic Report
1818
Gaming Realms plc Annual Report and Accounts 2023
Research and development
The Group maintains its level of
investment in software development
activities. In the opinion of the Directors,
continued investment in this area is
essential to strengthen the Group’s
market position for future growth. During
the year, the Group capitalised £4.6m
(2022: £4.0m) of development costs
(see Note 15).
During the year, the Group claimed
Research and Development relief as
per Notes 4 and 13 to the financial
statements.
Future developments
Future developments are discussed in
the Executive Chairman’s Statement on
page 4.
The Directors report was approved on
behalf of the Board on 28 March 2024
and signed on its behalf by
Mark Segal
Chief Executive Officer
28 March 2024
Directors’ Report
The Directors present their Annual
Report together with the audited
financial statements for the year ended
31 December 2023.
The Group meets its day-to-day working
capital requirements from the cash flows
generated by its trading activities and its
available cash resources.
Principal activities
The Group’s principal activities
during the year were that of content
development and licensing to real
money and social gaming customers in
Europe and North America.
These financial statements present the
results of the Group for the year ended
31 December 2023.
Names of Directors and dates of any
changes
The Directors who served during the year
and to the date of this report were:
• Michael Buckley
• Mark Segal
• Geoff Green
• Anna Massion
Jim Ryan
•
• Mark Wilson
• Mark Blandford
Directors’ and Officers’ liability
insurance
The Group has purchased and maintains
appropriate insurance cover in respect
of Directors’ and Officers liabilities. The
Group has also entered into qualifying
third-party indemnity arrangements
for the benefit of all its Directors, in a
form and scope which comply with the
requirements of the Companies Act
2006.
Results and dividends
The results for the year are set out on
page 30. The Company will not be
paying a dividend this year (2022: none).
Post balance sheet events
There were no significant events
impacting the Company that occurred
after 31 December 2023.
Going concern
Under Company law, the Company’s
Directors are required to consider
whether it is appropriate to prepare the
financial statements on the basis that
the Group and Company are a going
concern.
As disclosed further in Note 1 of the
financial statements, whilst there are a
number of risks to the Group’s trading
performance as summarised on page
14, the Group is confident of its ability
to continue to meet its liabilities as they
fall due. The Group’s strategic forecasts,
based on reasonable assumptions,
indicate that the Group should be able to
operate within the level of its currently
available resources. After making
enquiries and after consideration of the
Group’s existing operations, cash flow
forecasts and assessment of business,
regulatory and financing risks, the
Directors have a reasonable expectation
that the Group and Company have
adequate resources to continue in
operational existence for the
foreseeable future.
Accordingly, they continue to adopt the
going concern basis in preparing the
Annual report and Accounts.
Disclosure to auditors
The Directors who held office at the
date of approval of this Directors’ report
confirm that, as far as they are aware,
there is no relevant audit information of
which the Company’s auditor is unaware;
and each Director has taken all the
steps that ought to have been taken as
a Director to make themselves aware of
any relevant audit information and to
establish that the Company’s auditor is
aware of that information.
BDO LLP have expressed their willingness
to continue in office and a resolution to
reappoint them will be proposed at the
Annual General Meeting in accordance
with Section 489 of the Companies Act
2006.
Financial instruments
Details of the Group’s financial risk
management objectives and policies
are included in Note 21 to the financial
statements.
Corporate Governance
1919
Statement of Directors’ Responsibilities
The Directors are responsible for keeping
adequate accounting records that
are sufficient to show and explain the
Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Company
and enable them to ensure that the
financial statements comply with the
requirements of the Companies Act
2006. They are also responsible for
safeguarding the assets of the Company
and hence for taking reasonable steps for
the prevention and detection of fraud
and other irregularities.
Website publication
The Directors are responsible for
ensuring the Annual Report and the
financial statements are made available
on a website. Financial statements are
published on the Company’s website
in accordance with legislation in the
UK governing the preparation and
dissemination of financial statements,
which may vary from legislation in other
jurisdictions. The maintenance and
integrity of the Company’s website is
the responsibility of the Directors. The
Directors’ responsibility also extends to
the ongoing integrity of the financial
statements contained therein.
The Directors are responsible for
preparing the Annual Report and
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
the Directors have elected to prepare
the Group financial statements
in accordance with UK adopted
International Accounting Standards
and the company financial statements
in accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards
and applicable law). Under company
law the Directors must not approve
the financial statements unless they
are satisfied that they give a true and
fair view of the state of affairs of the
Group and Company and of the profit
or loss of the Group for that period. The
Directors are also required to prepare
financial statements in accordance with
the rules of the London Stock Exchange
for companies trading securities on the
Alternative Investment Market (‘AIM’).
In preparing these financial statements,
the Directors are required to:
• Select suitable accounting policies and
then apply them consistently;
• Make judgements and accounting
estimates that are reasonable and
prudent;
• State whether they have been
prepared in accordance with UK
adopted International Accounting
Standards in conformity with the
requirements of the Companies
Act 2006, subject to any material
departures disclosed and explained in
the financial statements; and
• Prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
Financial StatementsStrategic Report 2020
Gaming Realms plc Annual Report and Accounts 2023
Corporate Governance
Chairman’s Introduction
The Directors recognise the importance of good corporate governance and have chosen to apply the Quoted Companies Alliance
Corporate Governance Code (the ‘QCA Code’). The QCA Code was developed by the QCA in consultation with a number of
significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies.
The underlying principle of the QCA Code is that “the purpose of good corporate governance is to ensure that the company
is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term”. The
Group is not in compliance with all aspects of the Code due to the size and relative stage of development of the business, but
remains committed to developing its compliance position over time as the business grows and matures. To see how the Company
addresses the key governance principles defined in the QCA Code please refer to the Company’s website and the below table.
(The Company has not prepared an official Chairman’s corporate governance statement).
The principles of the Quoted Company Alliance (QCA) Code
QCA Code Principle
What we do and why
1. Establish a strategy
and business model
which promote
long-term value for
shareholders
2. Seek to understand
and meet shareholder
needs and
expectations
3. Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success
4. Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
The Company develops, publishes and licenses mobile real money and social games. Through its
market leading mobile platform and unique IP and brands, Gaming Realms is bringing together
media, entertainment and gaming assets in new game formats. Our goal is to try to beat the
market by investing in unique content and relationships with partners.
We do that through:
- Investing in unique mobile content and features on our gaming platform
- Investing with discipline, because we are able to test new opportunities before we roll them out
- Using data and technology to continuously improve. We are able to AB test all developments in
games and platform and able to deploy only the best.
- We generate revenue by licensing our unique gaming content and Slingo brand to online real
money gaming operators, social publishing operators, lotteries and land-based gambling games
manufacturers.
Key Challenges in implementing the strategy:
• Regulatory framework is continually changing for Gambling which requires constant updates
and development work per territory
• Continuing to create best in class Games to licence to operators
• Having technical resource to integrate the games onto Client sites
Please refer to our website for further details on how we comply with this requirement of the QCA
code: https://www.gamingrealms.com/wp-content/uploads/Statement-of-Compliance-with-the-
QCA-Corporate-Governance-Code-2020-02.pdf
Please refer to our website for further details on how we comply with this requirement of the QCA
code: https://www.gamingrealms.com/wp-content/uploads/Statement-of-Compliance-with-the-
QCA-Corporate-Governance-Code-2020-02.pdf
The Board recognises that maintaining sound controls and discipline is critical to managing the
downside risks to our plan.
To continue the improvement in this area we are adding to our existing controls department,
expanding the remit of the compliance teams, and engaging with external advisors to ensure
we remain compliant with regulations in all territories we will be working in and continued tight
control on investment as we continue to develop the platform and the games content.
Both the Board and senior managers are responsible for reviewing and evaluating risk and the
Executive Directors meet at least monthly to review ongoing trading performance, discuss
budgets and forecasts and new risks associated with ongoing trading.
Corporate Governance
2121
5. Maintain the board as
a well- functioning,
balanced team led by
the chair
The Board comprises the Executive Chairman, two Executive Directors and four Non-Executive
Directors. Michael Buckley, the Executive Chairman, is responsible for the running of the Board
and is supported by Mark Segal and Geoff Green, the Chief Executive Officer and Chief Financial
Officer respectively. Michael has executive responsibility for running the Group’s business and
implementing Group strategy. The Board has 4 Non-Executive Directors and is able to govern on
an effective basis.
The Directors considered to be independent are Jim Ryan, Mark Wilson, Mark Blandford and
Anna Massion.
Key Board activities this year included:
• Input into the accelerating growth plan
• Considered our financial and non-financial policies
• Discussed strategic priorities, including expansion into new territories
• Discussed the Group’s capital structure and financial strategy
• Reviewed the Group risk register, including Compliance
• Reviewed feedback from shareholders post full and half year results
The Board is supported by the Audit and Remuneration Committees. The Committees’ roles and
members are available on the Company’s website.
During the year there were 16 board meetings. Attendance records were:
Board Member
Meetings Attended
Michael Buckley
Mark Segal
Geoff Green*
Jim Ryan
Mark Wilson
Mark Blandford
Anna Massion
16
16
15
16
16
16
16
6. Ensure that between
them the Directors
have the necessary
up-to-date experience,
skills and capabilities
* Geoff Green, appointed on 1 February 2023 was eligible to attend 15 meetings
The Board is satisfied that, between the Directors, it has an effective and appropriate balance
of skills and experience, including in the areas of international online gambling, international
licensing, finance, innovation, and marketing. All Directors receive regular and timely information
on the Group’s operational and financial performance. Relevant information is circulated to the
Directors in advance of meetings. The business reports monthly on its headline performance
against its agreed budget, and the Board reviews the monthly update on performance and any
significant variances are reviewed at each meeting.
The Board makes decisions regarding the appointment and removal of Directors, and there is a
formal, rigorous and transparent procedure for appointments.
Full details of the Board members and their experience and skills can be found on page 16 of the
2023 Annual Report or via the Investor link on Gaming Realms plc’s website.
The Board has not sought external advice on any significant matter, apart from advice sought
in the normal course of business from our lawyers and tax compliance and other advisors. No
external advisors have been engaged by the Board of Directors, except as noted above.
Financial StatementsStrategic Report 2222
Gaming Realms plc Annual Report and Accounts 2023
Corporate Governance continued
7. Evaluate Board
performance
based on clear and
relevant objectives,
seeking continuous
improvement
A Board evaluation process will be carried out annually going forward as part of a wider strategy
review and future planning discussion. The process will be led by the Chairman and every
three years with the help of an external facilitator, the Board will be challenged to review its
performance and effectiveness objectively. During this process the Board will consider:
• Performance of the Board against the current strategy;
• Effectiveness of the Board in areas such as supervision, leadership and management of personnel
and risk areas;
• Areas of weakness either at Board level or executive management level for which recruitment
8. Promote a culture that
is based on ethical
values and behaviours
9. Maintain governance
structures and
processes that
are fit for purpose
and support good
decision-making by
the Board
10. Communicate
how the Company
is governed and
is performing
by maintaining
a dialogue with
shareholders and
other relevant
stakeholders
may be required; and
• Succession planning.
Our long-term growth is underpinned by our corporate culture and core beliefs. As part of a new
starter pack all new employees are provided with the core values in which the Group operates.
At Gaming Realm’s we take pride in our work ethic, creativity and cooperative team dynamic. It
is important to us to keep moving forward as a company, producing innovative work, reflecting
on mistakes, and striving to improve with each new project. None of this is achievable without
strong relationships and a collaborative working environment, which is at the core of our company
ethos and success. The culture of the Company is to ensure we operate in an environmentally
friendly way, with an energy efficient approach. The Group has policies in the following areas to
help promote ethical values and behaviour: whistleblowing, antibribery, anti-slavery, fraud, equal
opportunities, disciplinary and grievance procedures, health and safety. These policies form part of
a globally applicable Group Policy Handbook and Code of Conduct.
Please refer to our website for further details on how we comply with this requirement
of the QCA code:
https://www.gamingrealms.com/wp-content/uploads/Statement-of-Compliance-with-the-QCA-
Corporate-Governance-Code-2020-02.pdf
The Company communicates with shareholders through the Annual Report and Accounts, full-year
and half-year announcements, the Annual General Meeting (AGM) and one-to-one meetings with
large existing or potential new shareholders.
The Board receives regular updates on the views of shareholders through briefings and reports
from the Executive Chairman, Chief Executive Officer, Chief Financial Officer and the Company’s
brokers. The Company communicates with institutional investors through briefings with
management.
In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of
investors’ views. The Company completes regular employee surveys to maintain an open dialogue
with employees.
There is a requirement to prepare both an Audit Committee report and a Remuneration report.
These have not been done in this report but we will look to publish such reports in the future.
Corporate Governance
2323
twice in each financial year and will
have unrestricted access to the Group’s
external auditors. The Audit Committee
is chaired by Jim Ryan and also comprises
Mark Blandford and Anna Massion.
The Remuneration Committee reviews
the performance of the executive
directors and make recommendations
to the Board on matters relating to their
remuneration and terms of service.
The Remuneration Committee also
makes recommendations to the Board
on proposals for the granting of share
options and other equity incentives
pursuant to any employee share option
scheme or equity incentive plans in
operation from time to time. The
Remuneration Committee meets as
and when necessary. In exercising this
role, the directors shall have regard to
the recommendations put forward in
the QCA Guidelines. The Remuneration
Committee is chaired by Anna Massion
and comprises Jim Ryan and Mark Wilson.
The Company will continue to review the
corporate governance framework as the
business grows.
Roles of the Board, Executive
Chairman, Chief Executive Officer and
Chief Financial Officer
The Board is responsible for the long-
term success of the Company. There is
a formal schedule of matters reserved
to the Board. It is responsible for overall
Group strategy; approval of major
investments (whether Capex or Opex);
approval of the annual and interim
results; annual budgets; dividend
policy; and Board structure. It monitors
the exposure to key business risks
and reviews the strategic direction of
all trading subsidiaries, their annual
budgets and their performance in
relation to those budgets. There is a
clear division of responsibility at the
head of the Company. The Chairman is
responsible for running the business of
the Board and for ensuring appropriate
strategic focus and direction. The
Chairman, Chief Executive Officer and
Chief Financial Officer are responsible
for proposing the strategic focus to
the Board, implementing it once it has
been approved and overseeing the
management of the Company through
the Executive Team.
All Directors receive regular and
timely information on the Group’s
operational and financial performance.
Relevant information is circulated to
the Directors in advance of meetings.
The business reports monthly on its
headline performance against its agreed
budget, and the Board reviews the
monthly update on performance and
any significant variances are reviewed at
each meeting. Senior executives below
Board level maybe invited to attend
Board meetings where appropriate
to present business updates. Board
meetings throughout the year are held at
the Company’s Head Office in London.
Executive Team
The Executive Team consists of Michael
Buckley, Mark Segal and Geoff Green
with input from the vertical directors
and teams. They are responsible for
formulation of the proposed strategic
focus for submission to the Board, the
day-to-day management of the Group’s
businesses and its overall trading,
operational and financial performance
in fulfilment of that strategy, as well
as plans and budgets approved by the
Board of Directors. It also manages
and oversees key risks, management
development and corporate
responsibility programmes. The Executive
team reports to the plc Board on issues,
progress and recommendations for
change. The controls applied by the
Executive Team to financial and non-
financial matters are set out earlier in this
document, and the effectiveness of these
controls is regularly reported to the Audit
Committee and the Board.
Board committees
The Board is supported by the Audit
and Remuneration committees. Each
committee has access to such resources,
information and advice as it deems
necessary, at the cost of the Company,
to enable the committee to discharge its
duties.
The Audit Committee has the primary
responsibility of monitoring the quality
of internal controls and ensuring that
the financial performance of the Group
is properly measured and reported on.
It will receive and review reports from
the Group’s management and external
auditors relating to the interim and
annual accounts and the accounting
and internal control systems in use
throughout the Group. The Audit
Committee will meet not less than
Financial StatementsStrategic Report 24
Gaming Realms plc Annual Report and Accounts 2023
• Enquiry with Directors, review of
board minutes and review of external
resources to identify any key future
events that may have been omitted
from cash flow forecasts which would
impact future cash flows and cash
reserves.
• Assessing the appropriateness of
assumptions made in the Directors’
stress testing, scenario modelling
and sensitivity analysis, and the
appropriateness of the mitigating
actions including challenging whether
other reasonably possible scenarios
could occur.
• Considering the adequacy of the
disclosures relating to Going Concern
included within the annual report
against the requirements of the
accounting standards and consistency
of the disclosure against the going
concern assessment.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events
or conditions that, individually or
collectively, may cast significant doubt
on the Group and the Parent Company’s
ability to continue as a going concern
for a period of at least twelve months
from when the financial statements are
authorised for issue.
Our responsibilities and the
responsibilities of the Directors with
respect to going concern are described
in the relevant sections of this report.
Independent auditor’s report to the
members of Gaming Realms plc
Opinion on the financial statements
In our opinion:
• the financial statements give a true
and fair view of the state of the
Group’s and of the Parent Company’s
affairs as at 31 December 2023 and
of the Group’s profit for the year then
ended;
• the Group financial statements have
been properly prepared in accordance
with UK adopted international
accounting standards;
• the Parent Company financial
statements have been properly
prepared in accordance with United
Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been
prepared in accordance with the
requirements of the Companies Act
2006.
We have audited the financial
statements of Gaming Realms plc
(the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year
ended 31 December 2023 which
comprise the Consolidated Statement
of Comprehensive Income, the
Consolidated and Parent Company
Statements of Financial Position, the
Consolidated and Parent Company
Statements of Changes in Equity, the
Consolidated Statement of Cash Flows
and notes to the financial statements,
including a summary of material
accounting information.
The financial reporting framework that
has been applied in the preparation
of the Group financial statements
is applicable law and UK adopted
international accounting standards. The
financial reporting framework that has
been applied in the preparation of the
Parent Company financial statements
is applicable law and United Kingdom
Accounting Standards, including
Financial Reporting Standard 101
Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting
Practice).
Basis for opinion
We conducted our audit in accordance
with International Standards on
Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit
of the financial statements section of
our report. We believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis for
our opinion.
Independence
We remain independent of the Group
and the Parent Company in accordance
with the ethical requirements that are
relevant to our audit of the financial
statements in the UK, including the FRC’s
Ethical Standard as applied to listed
entities, and we have fulfilled our other
ethical responsibilities in accordance
with these requirements.
Conclusions relating to going
concern
In auditing the financial statements, we
have concluded that the Directors’ use
of the going concern basis of accounting
in the preparation of the financial
statements is appropriate. Our evaluation
of the Directors’ assessment of the Group
and the Parent Company’s ability to
continue to adopt the going concern
basis of accounting included:
A critical evaluation of Directors’
assessment of the entity’s ability to
continue as a going concern by:
• Evaluating the process the Directors
followed in making their assessment,
including confirming that the
assessment and underlying projections
were prepared by appropriate
individuals with sufficient knowledge
of the detailed figures as well as an
understanding of the entities markets,
strategies and risks.
• Understanding, challenging and
corroborating the key assumptions
included by the Directors in their
cash flow forecasts against prior year,
our knowledge of the business and
industry, and other areas of the audit.
Financial Statements
25
Overview
Coverage
Key audit
matters
98% (2022: 100%) of Group profit before tax
100% (2022: 100%) of Group revenue
100% (2022: 99%) of Group total assets
Revenue Recognition
(licensing revenue)
Capitalisation of development cost
related to platform
2023
2022
Materiality Group financial statements as a whole
£416k (2022: £225k) based on 8.1% of Group profit before tax
(2022: 1.2% of Group revenue)
An overview of the scope of our audit
Our Group audit was scoped by obtaining
an understanding of the Group and its
environment, including the Group’s
system of internal control, and assessing
the risks of material misstatement in the
financial statements. We also addressed
the risk of management override of
internal controls, including assessing
whether there was evidence of bias by
the Directors that may have represented
a risk of material misstatement.
In determining the scope of our audit
we considered the level of work to be
performed at each component in order
to ensure sufficient assurance was gained
to allow us to express an opinion on
the financial statements of the Group
as a whole. We tailored the extent of
the work to be performed on each
component based on our assessment of
the risk of material misstatement at each
component.
The Group consists of the Parent
Company and eight subsidiaries. Two of
the subsidiaries and the Parent Company
were considered to be significant
components and were subject to a full
scope audit by the Group audit team.
The financial information of other
components not considered significant
were subject to specified audit
procedures on certain account balances
and analytical review procedures by the
Group audit team.
Strategic ReportCorporate Governance 26
Gaming Realms plc Annual Report and Accounts 2023
Independent auditor’s report to the
members of Gaming Realms plc continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Revenue recognition
– Licencing Revenue
(with reference to notes
1 and 3)
Capitalisation of
development costs
(with reference to notes
1 and 15)
Licencing revenues include a number of
significant transactions where contracts
entered during the current and previous
year span multiple accounting periods
and include minimum guarantees and/or
uncertain future events.
There are significant judgements
required by Directors in determining
the performance obligations in these
contracts, whether revenue should be
recorded at a point in time or over a
period of time and the amount of revenue
to be recognised. For these reasons,
Licensing revenues was considered to be
a Key Audit Matter.
License revenue for the year was £19.9m
(2022: £14.9m).
How the scope of our audit addressed the key audit
matter
We assessed whether the revenue recognition policies
adopted by the Group was in accordance with applicable
accounting standards.
For existing and new contracts:
• We reviewed the terms of a sample of agreements to
assess whether the revenue had been recognised in
accordance with the Group’s accounting policy and
whether any other terms within the contract had any
material accounting or disclosure implications;
• We challenged the significant judgements by
reviewing the underlying terms of the contracts,
identifying the performance obligations, and assessing
whether performance obligations had been met in
order to recognise revenue;
• We inspected supporting documentation of the
satisfaction of the performance obligation.
Key observations
Based on the work performed, we consider that revenue
has been recognised appropriately and in accordance
with the Group’s revenue recognition accounting policy
and IFRS 15 requirements.
The Group incurs material expenditure on
the internal development of intangible
assets for RGS platform. Capital costs
comprise of payroll and external
development costs. Such expenditure
should only be capitalised when it meets
the criteria of applicable accounting
standards.
Due to judgement being required by
Directors in determining the projects
and costs that meet the criteria for
capitalisation, this was considered to be
an area of focus for our audit, and hence
a Key Audit Matter.
Our procedures included the following:
• We assessed whether the capitalisation policies
adopted by the Group comply with applicable
accounting standards.
• We challenged Director’s project analysis to check that
the projects capitalised met the criteria of applicable
accounting standards. This included:
- For a sample of projects ensuring that projects met
capitalisation criteria of IAS 38;
- Agreeing a sample of costs capitalised in the year to
source documentation;
- Agreeing the accuracy of time capitalised to related
timecards and payroll records; and
- Inspecting evidence of the projects subsequent launch
or intention to launch.
Capitalised development costs in the year
for RGS platform were £1.5m (2022:
£1.5m).
Key observations
Based on the work performed, we consider Director’s
judgements to be appropriate and adequate.
Financial Statements
27
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements
Parent company financial statements
2022
£000
225
Based on
1.2% of Group
revenue.
Revenue was
a fundamental
KPI and a key
focus area for
investors.
2023
£000
139
2022
£000
63
Based on 1% of total
assets of Parent
Company.
Based on 1% of total
assets of Parent
Company.
Total assets are considered to be the most
appropriate benchmark as the principal activity of
the Parent Company is a holding company.
Materiality
2023
£000
416
Basis for determining
materiality
Based on 8.1% of Group profit
before tax.
Profit before tax is considered as
the most appropriate benchmark
in current year instead of revenue.
As the Group has been profitable
since past few years and profit
before tax is the key focus area
for the stakeholders therefore,
materiality is based on profit
before tax. Further, Materiality has
also been benchmarked against
prior year basis and underlying
performance.
Rationale for the
benchmark applied
Performance
materiality
Basis for determining
performance
materiality
Rationale for the
percentage applied
for performance
materiality
312
169
104
47
Based on 75% of the Group Materiality.
Based on 75% of the Parent Company Materiality.
Based on history of minimal adjustments,
with few accounts subject to estimation and
management’s attitude to adjustments.
Based on history of minimal adjustments,
few accounts subject to estimation and
management’s attitude to adjustments.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group and other
components subject to specified audit procedures, apart from the Parent Company whose materiality is set above, based on a
percentage of between 50% and 80% (2022: 50% and 98%) of Group materiality dependent on the size and our assessment of
the risk of material misstatement of that component. Component materiality ranged from £139k to £333k (2022: £112k to
£220k). In the audit of each component, we further applied performance materiality levels of 75% (2022: 75%) of the component
materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £21k (2022:
£11k). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Strategic ReportCorporate Governance 28
Gaming Realms plc Annual Report and Accounts 2023
Independent auditor’s report to the
members of Gaming Realms plc continued
Other information
The directors are responsible for the other information. The other information comprises the information included in the
Annual Report and Accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course
of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
Matters on which we are
required to report by
exception
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in
the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and
returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
Financial Statements
29
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management, those charged with governance, legal and Compliance Director and Audit Committee; and
• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations;
We considered the significant laws and regulations to be Companies Act 2006, applicable accounting frameworks and AIM rules.
The Group is also subject to laws and regulations in jurisdictions where it holds gaming licenses. Non-compliance of these laws
and regulations could have a material effect on the amount or disclosures in the financial statements, for example through the
imposition of fines or litigations.
Our procedures in respect of the above included:
• Enquiries of Directors and those responsible for legal and compliance procedures to understand how the Group is complying
with those legal and regulatory frameworks;
• We assessed compliance with laws and regulations through enquiry with Directors, the Audit Committee and the Legal and
Compliance Director and through review of minutes of meeting of those charged with governance for any instances of non-
compliance with laws and regulations;
• Confirmation that the Group and Parent Company held gaming licenses for various territories of operation through inspection of
licenses;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures against the requirements of the applicable accounting framework and agreeing to
supporting documentation;
• Involvement of tax specialists in the audit;
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with Directors and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
- Detecting and responding to the risks of fraud; and
- Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud.
Based on our risk assessment, we identified fraud risks in relation to management override of controls and overstatement of
revenue during the year specifically through manual journal entries where incentive might exist to accelerate earnings:
• Testing journal entries throughout the year, particularly on revenue and consolidation journals, which met a defined risk
criteria, by agreeing to supporting documentation where we considered there to be a higher risk of potential fraud and other
adjustment;
• Assessing whether the judgements made by Directors, are indicative of a potential bias, and evaluating the business rationale
of any significant transactions that are unusual or outside the normal course of business. This included those set out in the key
audit matters section of our report;
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-
compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Charles Morelli (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
28 March 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Strategic ReportCorporate Governance 30
Gaming Realms plc Annual Report and Accounts 2023
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Revenue
Other income
Marketing expenses
Operating expenses
Administrative expenses
Share option and related charges
EBITDA before adjusting items
Adjusting items
EBITDA
Amortisation of intangible assets
Depreciation of property, plant and equipment
Finance expense
Finance income
Profit before tax
Tax credit
Profit for the financial year
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Exchange (loss) / gain arising on translation of foreign operations
Total other comprehensive income
Total comprehensive income
Profit attributable to:
Owners of the parent
Total comprehensive income attributable to:
Owners of the parent
Note
3
4
23
11
5
11
15
16
12
12
13
2023
£
2022
£
23,421,523
18,650,521
139,562
112,147
(528,673)
(133,799)
(4,801,467)
(3,887,647)
(8,168,980)
(6,943,458)
(632,304)
(351,726)
9,429,661
7,446,038
(193,859)
-
9,235,802
7,446,038
(3,863,808)
(3,671,379)
(276,259)
(43,923)
115,525
(258,515)
(394,042)
401,658
5,167,337
3,523,760
757,666
90,355
5,925,003
3,614,115
(105,004)
(105,004)
131,432
131,432
5,819,999
3,745,547
5,925,003
3,614,115
5,925,003
3,614,115
5,819,999
3,745,547
5,819,999
3,745,547
Earnings per share
Basic
Diluted
14
14
Pence
2.02
1.96
Pence
1.24
1.21
*EBITDA is a non-GAAP measure used to represent the trading performance and results of the Group. EBITDA is defined as profit before tax adjusted
for finance income and expense, depreciation and amortisation.
The notes on pages 34 to 62 form part of these financial statements.
Consolidated Statement of Financial Position
As at 31 December 2023
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax asset
Other assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Non-current liabilities
Deferred tax liability
Lease liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Foreign exchange reserve
Retained earnings
Total equity
Financial Statements
31
31 December
2023
£
31 December
2022
£
Note
15
16
13
17
13,272,711
12,422,852
367,092
1,891,000
139,531
535,409
287,407
138,798
15,670,334
13,384,466
18
5,060,528
5,336,330
7,455,316
2,922,775
12,515,844
8,259,105
28,186,178
21,643,571
19
20
13
20
22
22
3,383,248
3,270,319
52,135
217,731
3,435,383
3,488,050
219,921
133,445
353,366
75,592
167,680
243,272
3,788,749
3,731,322
24,397,429
17,912,249
29,366,782
29,200,676
87,732,888
87,653,774
(67,673,657)
(67,673,657)
1,444,697
1,549,701
(26,473,281)
(32,818,245)
24,397,429
17,912,249
The notes on pages 34 to 62 form part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 28 March 2024 and were signed on its behalf by:
Mark Segal
Chief Executive Officer
Strategic ReportCorporate Governance
32
Gaming Realms plc Annual Report and Accounts 2023
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Cash flows from operating activities
Profit for the financial year
Adjustments for:
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Amortisation of intangible fixed assets
Other income
Other income received during the year
Finance income
Finance expense
Tax credit
Exchange differences
Share based payment expense
Decrease / (increase) in trade and other receivables
Increase in trade and other payables
Decrease in other assets
Net cash flows from operating activities before taxation
Net tax paid in the year
Net cash flows from operating activities
Investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Capitalised development costs
Interest received
Net cash used in investing activities
Financing activities
Repayment of convertible loan and additional charges
Principal paid on lease liability
Issue of share capital on exercise of options
Interest paid
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain / (loss) on cash and cash equivalents
Cash and cash equivalents at end of year
The notes on pages 34 to 62 form part of these financial statements.
Note
2023
£
2022
£
16
16
15
4
12
12
13
23
16
15
15
12
20
22
5,925,003
3,614,115
276,259
1,571
258,515
-
3,863,808
3,671,379
(139,562)
(112,147)
185,184
121,962
(115,525)
(401,658)
43,923
(757,666)
(105,268)
419,961
394,042
(90,355)
54,013
438,868
368,986
(1,973,278)
244,710
-
607,560
11,848
10,211,384
6,594,864
(935,660)
(45,213)
9,275,724
6,549,651
(89,715)
(157,751)
(124,104)
(125,684)
(4,633,403)
(4,009,171)
85,679
-
(4,795,190)
(4,258,959)
-
(3,375,000)
(236,659)
(163,638)
245,220
(28,538)
13,332
(186,880)
(19,977)
(3,712,186)
4,460,557
(1,421,494)
2,922,775
4,412,375
71,984
(68,106)
7,455,316
2,922,775
Financial Statements
33
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
1 January 2022
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Contributions by and distributions to owners
Share-based payment on share options (Note 23)
Share
capital
£
Share
premium
£
Merger
reserve
£
Foreign
Exchange
Reserve
£
Retained
earnings
£
Total to
equity
£
28,970,262 87,370,856 (67,673,657) 1,418,269 (36,977,228) 13,108,502
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,614,115
3,614,115
131,432
-
131,432
131,432
3,614,115
3,745,547
-
-
-
438,868
438,868
-
13,332
106,000
606,000
Exercise of options (Note 22)
13,332
Conversion of loan
31 December 2022
217,082
282,918
29,200,676 87,653,774 (67,673,657) 1,549,701 (32,818,245) 17,912,249
1 January 2023
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Contributions by and distributions to owners
Share-based payment on share options (Note 23)
Exercise of options (Note 22)
31 December 2023
29,200,676 87,653,774 (67,673,657) 1,549,701 (32,818,245) 17,912,249
-
-
-
-
-
-
-
-
166,106
79,114
-
-
-
-
-
-
5,925,003
5,925,003
(105,004)
-
(105,004)
(105,004)
5,925,003
5,819,999
-
-
419,961
419,961
-
245,220
29,366,782 87,732,888 (67,673,657) 1,444,697 (26,473,281) 24,397,429
The notes on pages 34 to 62 form part of these financial statements.
Strategic ReportCorporate Governance
34
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
1. Accounting policies
General information
Gaming Realms Plc (the “Company”) and its subsidiaries (together the “Group”).
The Company is admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange. It is incorporated
and domiciled in the UK. The address of its registered office is Two Valentine Place, London, SE1 8QH.
The consolidated financial statements are presented in British Pounds Sterling.
Basis of preparation
The Group financial statements have been prepared in accordance with UK adopted international accounting standards in
conformity with the requirements of the Companies Act 2006.
The Group financial statements have been prepared on the historical cost basis, except where certain assets or liabilities are held
at amortised cost or at fair value as described in the accounting policies below.
Basis of consolidation
The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company
(subsidiaries). Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of Comprehensive
Income from the effective date of acquisition up to the effective date of disposal. Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Going concern
The Group meets its day-to-day working capital requirements from the cash flows generated by its trading activities and its
available cash resources.
The Group prepares cash flow forecasts and re-forecasts at least bi-annually as part of the business planning process. The Directors
have reviewed forecast cash flows for the period to December 2026 and consider that the Group will have sufficient cash
resources available to meet its liabilities as they fall due for at least the forthcoming 12 months from the date of the approval of
the financial statements.
Given the various macro-economic uncertainties such as inflation, recession fears and the war in Ukraine, these cash flow
forecasts have been subject to short- and medium-term stress testing, scenario modelling and sensitivity analysis through to June
2025, which the Directors consider sufficiently robust. Scenarios considered include but are not limited to; failure to expand
into planned new regulated jurisdictions during the forecast period and a significant reduction in trading cash flows compared
to Group forecasts. The Directors note that in an extreme scenario, the Group also has the option to rationalise its cost base
including cuts to discretionary capital, marketing and overhead expenditure. The Directors consider that the required level of
change to the Group’s forecast cash flows to give a rise to a material risk over going concern are sufficiently remote.
Accordingly, these financial statements have been prepared on the basis of accounting principles applicable to a going concern,
which assumes that the Group and the Company will realise its assets and discharge its liabilities in the normal course of business.
Management has carried out an assessment of the going concern assumption and has concluded that the Group and the
Company will generate sufficient cash and cash equivalents to continue operating for the next 12 months.
Adoption of new and revised standards
The following amendments are effective for the year beginning 1 January 2023:
» Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
» Definition of Accounting Estimates (Amendments to IAS 8); and
» Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
These amendments did not have a material impact on the Group, however the accounting policies included within this note have
changed as a result.
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided not to adopt early.
Financial Statements
35
The following amendments are effective for the period beginning 1 January 2024:
» IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback);
» IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-current); and
» IAS 1 Presentation of Financial Statements (Amendment – Non-current Liabilities with Covenants).
The following amendments are effective for the period beginning 1 January 2025:
» IAS 21 The Effects of Changes in Foreign Exchange rates (Amendment- Lack of exchangeability)
The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not expect any
of the standards or amendments issued by the IASB, but not yet effective, to have a material impact on the Group.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the
identifiable assets and liabilities, including separately identifiable intangible assets, of a subsidiary, associate or jointly controlled
entity at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated impairment. On disposal
of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-
controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquiree.
Contingent consideration is initially recognised at fair value on the date of acquisition and subsequently remeasured subsequently
through profit or loss.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement
of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of
consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.
Adjusted EBITDA
The Board of Directors believes that in order to best represent the trading performance and results of the Group, the reported
numbers should exclude certain one-off items. The Group therefore presents adjusted results, as described in Note 5, which differ
from statutory results due to the exclusion of these items.
Management regularly uses the adjusted financial measures internally to understand, manage and evaluate the business and make
operating decisions. These adjusted measures are among the primary factors management uses in planning for and forecasting
future periods.
EBITDA is a non-GAAP Company specific measure defined as profit or loss before tax adjusted for finance income and expense,
depreciation and amortisation.
Adjusted EBITDA excludes non-recurring significant items which are outside the normal scope of the Group’s ordinary activities
which the directors consider to be one-off in nature that should be brought to the reader’s attention in understanding the Group’s
financial performance.
The adjusting items are separately disclosed in order to enhance the reader’s understanding of the Group’s profitability and cash
flow generation.
Adjusting items in the current year relate to management restructuring costs.
Strategic ReportCorporate Governance
36
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Revenue
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on
behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.
Performance obligations and timing of revenue recognition
Revenue comprises licensing of content and IP, and social publishing.
The following is a description of the principal activities – separated by reportable segments – from which the Group generates its
revenue. For more detailed information about reportable segments see Note 11.
The Group accounts for revenue as principal where it is the licenced entity in the provision of gaming services to end users
and controls the service provision. Where the Group is considered to be acting as agent in the service provision, revenues are
recognised net.
Licensing revenue
Licensing revenue derives from contractual relationships for the right to use of intellectual property and the amount of
consideration receivable is dependent upon the value of sales the customer makes using the IP.
For content licensing, revenue is sales-based dependent on the activity of the Group’s customers. Revenue is recognised as the
usage occurs by the customer (under the IFRS 15 royalty exception).
Any minimum guarantees are recognised at a point in time when the control of the licence is passed to the customer.
For brand licensing, revenue is recognised at a point in time when there are no further monetary or financial obligations to be
fulfilled by the licensor. However, where the Group has ongoing obligations, licensing fees are further analysed for the contractual
service provision and recognised either at point in time or over time, applying the royalty exception as applicable.
Determining the transaction price
Most of the Group’s revenue is derived from fixed price contracts and therefore the amount of revenue to be earned from each
contract is determined by reference to those fixed prices and rates.
Contracts where the transaction price is not fixed are royalties which are accounted for in accordance with the usage-based
royalty exception in IFRS 15.
Allocating amounts to performance obligations
For most contracts, there is a fixed amount for each wager or credit purchased and only one performance obligation, being the
honouring of the outcome of the wager/purchase. Therefore, there is no judgement involved in allocating the contract price.
Licensing contracts work on a sales-based royalty. Therefore, there is no judgement involved in allocating the contract price.
Social publishing revenue
Social publishing revenue derives from the purchase of credits and awards on social gaming sites. In addition, revenue is
generated from in app advertisements.
Revenue is recognised at a point in time when the user credit has been purchased as there is no further service to be delivered
and credits are non-refundable. In app advertising revenue is recognised at a point in time when the advertisement is displayed,
or offer has been completed by the customer and confirmed by third-party reports.
Other income
The Group receives government grants in respect of its research and development activities performed. This is presented as other
income in the consolidated statement of comprehensive income and is recognised in the same period as the expenses incurred in
performing the applicable activities.
Leases
Group as a lessee
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
» Leases of low value assets; and
» Leases with a duration of 12 months or less.
Financial Statements
37
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily
determinable, in which case the Group’s incremental borrowing rate on commencement of the lease is used. Variable lease
payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable
lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
» amounts expected to be payable under any residual value guarantee;
» the exercise price of any purchase option granted in favour of the group if it is reasonable certain to assess that option; and
» any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option
being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and
increased for:
» lease payments made at or before commencement of the lease;
» initial direct costs incurred; and
» the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased
asset (typically leasehold dilapidations).
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the
remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease
term.
Foreign currency
The financial information of the Group is prepared in British Pounds Sterling, which is the currency that best reflects the economic
substance of the underlying events and circumstances relevant to the Group. The Group has subsidiaries with functional currencies
of British Pounds Sterling, U.S. Dollars, Euros and Canadian Dollars.
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in
which they operate (their “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency
monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are recognised immediately in the statement of comprehensive income.
Foreign exchange differences arising from financing transactions are recognised in finance income/loss, differences arising from
trading balances are recognised in administration costs.
On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the
transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those
operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net
assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and
accumulated in the foreign exchange reserve.
Exchange differences recognised as profit or loss in Group entities’ separate financial statements on the translation of long-term
monetary items forming part of the Parent company’s net investment in the overseas operation concerned are reclassified to
other comprehensive income and accumulated in the foreign exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to
that operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the
profit or loss on disposal.
Strategic ReportCorporate Governance 38
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Impairment of non-financial assets
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually. Other
non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying
amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in
use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the
smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units
(“CGUs”). Goodwill is allocated on initial recognition to each of the Group’s CGUs that are expected to benefit from a business
combination that gives rise to the goodwill.
Impairment charges are included in the income statement, except to the extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is not reversed.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with
original maturities of three months or less.
Share-based payments
Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the
consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account
by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market
vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a
charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for
failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is
charged with the fair value of goods and services received.
The fair value of share options issued without market-based vesting conditions is measured by the application of the Black-Scholes
option pricing model by reference to the grant date of the options.
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their
useful economic lives.
Intangible assets are recognised on business combinations if they are separable from the acquired entity or arise from other
contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques (see
section related to critical estimates and judgements below).
Internally generated intangible assets (development costs)
The Group has material development spend on internally developed products which fall into two categories; (i) build of new
games content to be released in the licensing and social publishing segments, and (ii) platform enhancements and development.
Expenditure on internally developed products is capitalised if it can be demonstrated that:
» it is technically feasible to develop the product for it to be used or sold;
» adequate resources are available to complete the development;
» there is an intention to complete and use or sell the product;
» the Group is able to use or sell the product;
» use or sale of the product will generate future economic benefits; and
» expenditure on the project can be measured reliably.
Once a product is either used or distributed, capitalised development costs in relation to that product are amortised over the
period the Group expects to benefit from using or selling the product developed.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are
recognised in the consolidated statement of comprehensive income as incurred.
Financial Statements
39
The significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the cost of
intangibles acquired in a business combination are as follows:
Intangible asset
Customer databases
Development costs
Intellectual property
Domain names
Software
Useful economic life
1–2 years
3-5 years
8 years
2-3 years
3-5 years
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly
attributable costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The
corresponding liability is recognised within provisions.
Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost less estimated residual
value, of each asset evenly over its expected useful life as follows:
Office, furniture and equipment
20% per annum straight-line
Computer equipment
Leasehold improvements
33% per annum straight-line
Over the life of the lease
Reserves
The following describes the nature and purpose of each reserve within equity:
Reserve
Share capital
Share premium
Merger reserve
Description and purpose
Nominal value of shares subscribed for.
Amount subscribed for share capital in excess of nominal value.
Adjustments arising on the reverse transaction and the excess of the fair value over nominal value for shares
issued in business combinations qualifying for merger relief under the Companies Act 2006.
Retained earnings
All other net gains and losses and transactions with owners not recognised elsewhere.
Foreign exchange reserve
Gains/losses arising on retranslating the net assets of overseas operations into sterling.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement
of financial position differs from its tax base, except for differences arising on:
» The initial recognition of goodwill
» The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction affects neither accounting nor taxable profit
» Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the
difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against
which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting
date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Strategic ReportCorporate Governance 40
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
2. Critical ccounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
Estimates
(a) Impairment of goodwill and other intangible assets
Goodwill and other intangible assets are reviewed for impairment and their values are written down on the basis of the Group’s
expectations of future economic benefits expected to be received. Any process which attempts to estimate future outcomes to
determine the recoverable amount is subject to uncertainty. The recoverable amount is determined based on the lower of value
in use calculations, which require the estimate of future cash flows and the choice of discount rate to calculate the present value
of the cash flows. Calculations are based on management’s forecasts for the period, and past experience of the same or similar
assets. Where it is believed that the estimation uncertainty can give rise to material differences in asset carrying values, this will
be stated in the relevant notes to the financial statements. For both CGU’s impairment reviews were performed over, a reasonably
possible change to an input to the impairment review calculation (such as WACC, long term growth rate, reduction in medium
term cash flows) would not result in an impairment. See Note 15.
(b) Amortisation of development costs
Capitalised development costs are subject to amortisation over the estimated useful life and reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. The estimated useful life of
these assets is based on management’s estimates of the period over which the assets are expected to generate revenue and are
periodically reviewed to confirm they are still appropriate.
(c) Recognition of deferred tax assets
The Group has material unused tax losses carried forward at the balance sheet date. A deferred tax asset of £1.9m (2022: £0.3m)
has been recognised in respect of the Group’s historic UK trading losses which are being carried forward (see Note 13). The
increase in the asset recognised compared with the prior year is a result of the improvement in current trading along with the
Directors future anticipated performance of the Group. The utilisation of these losses is dependent on the existence of future
taxable profits, to which the tax losses can be applied against.
In assessing the quantum and probability of recovery of tax losses carried forward, the Directors have reviewed the Group’s three-
year forecasts used for both the going concern assessment and annual impairment testing, which have been approved by the
Board. The process of forecasting future performance is inherently subject to estimation uncertainty. To the extent assumptions
regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax
assets as well as the amounts recognised in income in the period in which the change occurs.
Taxation information, including deferred tax assets, is presented in Note 13.
Financial Statements
41
Judgements
(a) Revenue recognition
Certain brand licensing agreements involve judgement over the nature, timing and extent of the Group’s activities in fulfilling
contractual performance obligations. This judgement therefore impacts the timing of revenues recognised for such agreements.
On a contract-by-contract basis, the Group assesses its expected ongoing commitments to fulfil its contractual obligations. Where
an agreement provides the right for a customer to use the Group’s intellectual property and there are no significant ongoing
commitments for the Group to satisfy, the performance obligation is considered to be satisfied at a point in time, when the
associated revenues are recognised. However, where there is expected to be significant ongoing commitment for the Group,
revenues are recognised over time with the satisfaction of the performance obligations.
(b) Capitalisation of development costs
The identification of development costs that meet the criteria for capitalisation is dependent on management’s judgement and
knowledge of the work done. Development costs of gaming software platforms are separately identified. Key judgements relate
to the separately identified projects, the expected future benefits and the useful economic life and are based on the information
available at each period end. Economic success of any development is assessed on a reasonable basis but remains uncertain at the
time of recognition. Development costs capitalised total £4.6m (2022: £4.0m). See Note 15.
(c) Taxes
Judgement is required to interpret international tax laws relating to e-commerce in order to identify and value provisions in
relation to indirect taxes. The principal risks relating to the Group’s tax liabilities arise from domestic and international tax laws
and practices in the e-commerce environment which continues to evolve. The Group is basing its tax provisions on current (and
enacted but not yet implemented) tax rules and practices, together with advice received, where necessary, from professional
advisers, and believes that its accruals for tax liabilities are adequate for all open enquiry years based on its assessment of many
factors including past experience and interpretations of tax law. The Group monitors changes in legislation and updates its tax
liabilities accordingly, However, due to different interpretations and evolving practice there is a risk that additional liabilities
could arise. To the extent that the final outcome of such matters differs to management’s assessment at any reporting dates, such
differences may impact the financial results or contingent liabilities disclosed in the period in which such determination is made.
Further details can be found in Note 25 to the financial statements.
Strategic ReportCorporate Governance 42
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
3. Revenue from contracts with customers
Disaggregation of revenue
The Group has disaggregated revenue into various categories in the following table which is intended to:
» depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic date; and
» enable users to understand the relationship with revenue segment information provided in Note 11.
B2B licensing revenue by primary geographical market is split according to the location of the operator.
In 2023 there was one customer (2022: one customer) who individually accounted for more than 10% of total revenue of the
Group. Total revenue from this customer in 2023 was £2,344,286 (2022: £2,672,153).
2023 revenue
Primary geographical markets
UK (including Channel Islands)
USA
Isle of Man
Malta
Gibraltar
Rest of the World
Contract counterparties
Direct to consumers (B2C)
B2B
2022 revenue
Primary geographical markets
UK (including Channel Islands)
USA
Isle of Man
Malta
Gibraltar
Rest of the World
Contract counterparties
Direct to consumers (B2C)
B2B
Licensing
£
Social
publishing
£
Other
£
Total
£
1,101,487
-
8,099,555
3,504,157
1,093,050
3,766,252
4,203,155
1,653,867
-
-
-
-
19,917,366
3,504,157
-
3,504,157
19,917,366
-
19,917,366
3,504,157
-
-
-
-
-
-
-
-
-
-
1,101,487
11,603,712
1,093,050
3,766,252
4,203,155
1,653,867
23,421,523
3,504,157
19,917,366
23,421,523
Licensing
£
Social
publishing
£
Other
£
Total
£
831,518
-
23,000
854,518
6,480,346
3,690,485
672,098
2,838,486
3,079,594
1,034,994
-
-
-
-
-
-
-
-
-
10,170,831
672,098
2,838,486
3,079,594
1,034,994
14,937,036
3,690,485
23,000
18,650,521
-
3,690,485
-
3,690,485
14,937,036
-
14,937,036
3,690,485
23,000
23,000
14,960,036
18,650,521
Financial Statements
43
Remaining performance Obligations
The vast majority of the Group’s contracts are for services that will be provided within the next 12 months. Certain licence
contracts have been entered into for which both:
» the original contractual period was greater than 12 months; and
» the Group’s right to consideration does not correspond directly with the performance.
The amount of revenue that will be recognised in future periods on these contracts when those remaining performance
obligations will be satisfied is:
Next 12 months
2023
£
-
-
2022
£
600,000
600,000
4. Other income
The Group receives government grants in respect of its research and development activities performed in certain jurisdictions in
which the Group operates. Amounts recognised in the income statement are summarised below.
Other income
2023
£
2022
£
139,562
112,147
139,562
112,147
5. Adjusted EBITDA
EBITDA is profit before interest, tax, depreciation and amortisation and is a non-GAAP measure. Adjusted EBITDA is EBITDA before
adjusting items, which are items that Management considers to be significant, non-recurring and outside the scope of the Group’s
ordinary activities that may distort an understanding of financial performance or impair comparability.
Adjusted EBITDA is stated before adjusting items as follows:
Restructuring costs
Adjusting items
Restructuring costs of £0.2m in 2023 (2022: £Nil) relate to a management restructure during the year.
2023
£
193,859
193,859
2022
£
-
-
Strategic ReportCorporate Governance
44
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
6. Expenses by nature
Profit before interest and tax has been arrived at after charging/(crediting):
Employee benefit expenses (excluding share option and related charges)
License and platform fees
IT software and hosting costs
Legal, professional and consulting
Share option and related charges
Marketing expenses
Depreciation of property, plant and equipment
Amortisation of intangible assets
Low value and short term leases
Foreign exchange loss/ (gain)
7. Auditor’s remuneration
During the year the Group obtained the following services from the Company’s auditor:
Fees payable to the Company's auditor for the audit of the Group's annual accounts
Fees payable to the Company's auditor for the audit of the subsidiary financial statements
Fees payable to the Company's auditor for the review of the interim statement
Fees payable to the Company's auditor for other services:
- Tax compliance services
- Research and development tax credit services
- Other
Note
10
23
16
15
2023
£
2022
£
5,154,730
4,596,796
2,905,326
2,582,636
1,968,783
1,528,098
911,676
738,919
632,304
351,726
528,673
133,799
276,259
258,515
3,863,808
3,671,379
4,325
-
144,165
(111,557)
2023
£
35,000
98,000
-
38,612
20,000
-
2022
£
30,000
90,750
3,000
50,785
54,850
4,713
191,612
234,098
8. Key management personnel remuneration
During the year the Group paid the following remuneration to the key management personnel (which include directors) of the
consolidated entity:
Short-term benefits of key management personnel
Post-employment benefits of key management personnel
Share-based benefits of key management personnel
Compensation for loss of office
2023
£
2022
£
2,301,993
1,914,893
43,805
40,162
368,746
394,149
74,350
-
2,788,894
2,349,204
Financial Statements
45
9. Directors’ remuneration
The following table presents the Directors’ remuneration of the Company for the year ended 31 December 2023.
Michael Buckley
Mark Segal
Geoff Green
Jim Ryan
Mark Wilson
Mark Blandford
Anna Massion
Salary and fees
£
Bonus
£
Benefits
£
2023 Total
£
2022 Total
£
290,000
147,253
-
437,253
357,500
315,000
222,615
150,000
61,941
16,441
10,447
50,000
50,000
50,000
53,750
-
-
-
-
-
-
-
-
554,056
372,896
222,388
50,000
50,000
50,000
53,750
-
50,000
50,000
50,000
8,333
958,750
431,809
26,888
1,417,447
888,729
The Directors’ ordinary shares in the Company, were as follows:
Michael Buckley
Mark Segal
Jim Ryan
Mark Wilson
Mark Blandford
Anna Massion
2023
No. of shares
2022
No. of shares
25,700,000
25,700,000
740,761
740,761
1,153,845
1,153,845
1,153,845
1,153,845
12,598,738
11,730,000
33,250
-
41,380,439
40,478,451
Directors’ interests in long-term incentive plans
The Directors’ interests in share options, over ordinary shares in the Company, were as follows:
Michael Buckley
Mark Segal
Options at 1
Jan 2023
Options
granted
Options
exercised
Options
lapsed
Options at 31
Dec 2023
Exercise
price
Date of
grant
1
2
3
4
5
1
2
3
4
5
2,000,000
5,769,229
1,000,000
500,000
-
-
-
-
-
1,000,000
3,000,000
3,076,923
1,000,000
500,000
-
-
-
-
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
5,769,229
£0.10
02-Jun-20
£0.20
28-Jul-20
1,000,000
£0.325
06-Jan-22
500,000
£0.325
06-Jan-22
1,000,000
£0.00
02-Aug-23
3,000,000
£0.10
02-Jun-20
3,076,923
£0.20
28-Jul-20
1,000,000
£0.325
06-Jan-22
500,000
£0.325
06-Jan-22
1,000,000
£0.00
02-Aug-23
Strategic ReportCorporate Governance
46
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
9. Directors’ remuneration (continued)
Geoff Green
Options at 1
Jan 2023
Options
granted
Options
exercised
Options
lapsed
Options at
31 Dec 2023
Exercise
price
Date of
grant
350,000
50,000
150,000
-
-
-
-
500,000
3
5
-
-
-
-
-
-
-
-
350,000
£0.10
01-May-20
50,000
£0.20
26-Nov-20
150,000
£0.325
06-Jan-22
500,000
£0.00
02-Aug-23
1 On 2 June 2020, the Company granted these equity settled awards to certain Directors, which vest in three equal tranches on 3 February 2021,
2022 and 2023 subject to certain performance criteria.
2 On 28 July 2020, the Company granted these equity settled awards to certain Directors, which vest in two equal tranches 12 and 24 months
from the date of grant.
3 On 6 January 2022, the Company granted these equity settled awards to certain Directors. The options vest immediately on certain non-market-
based conditions occurring and lapse on the third anniversary of grant if the conditions do not occur.
4 On 6 January 2022, the Company granted these equity settled awards to certain Directors, which vest in three equal tranches on 15 October
2022, 2023 and 2024.
5 On 2 August 2023, the Company granted these equity settled awards to certain Directors, which vest on 30 June 2026.
10. Employee benefit expenses
The Group makes contributions to defined contribution plans and has no further payment obligations once the contributions
have been paid. The contributions are recognised as employee benefit expense when they are due. The assets of the individual
schemes are held separately from those of the Group in independently administered funds. Unpaid contributions at 31 December
2023 were £68,326 (2022: £20,600).
The average number of employees was 78 (2022: 67).
Employee benefit expenses (including directors) comprise:
Wages and salaries
Share option and related charges (Note 23)
Social security contributions and similar taxes
Pension contributions
Staff costs capitalised in respect of internally generated intangible assets
2023
£
2022
£
6,572,848
5,615,054
632,304
351,726
668,009
585,604
224,994
179,845
8,098,155
6,732,229
(2,311,121)
(1,783,707)
5,787,034
4,948,522
Financial Statements
47
11. Segment information
The Board is the Group’s chief operating decision-maker. Management has determined the operating segments based on the
information reviewed by the Board for the purposes of allocating resources and assessing performance.
The Group has 2 reportable operating segments:
» Licensing - brand and content licensing to partners in Europe and the US
» Social Publishing - providing freemium games to the US
2023
Revenue
Other income
Marketing expense
Operating expense
Administrative expense
Share option and related charges
EBITDA before adjusting items
Adjusting items
EBITDA
Amortisation of intangible assets
Depreciation of property, plant and equipment
Finance expense
Finance income
Profit before tax
2022
Revenue
Other income
Marketing expense
Operating expense
Administrative expense
Share option and related charges
EBITDA
Amortisation of intangible assets
Depreciation of property, plant and equipment
Finance expense
Finance income
Profit before tax
Licencing
£
Social
Publishing
£
19,917,366
3,504,157
-
139,562
Head
Office
£
Total
£
-
-
23,421,523
139,562
(94,533)
(338,030)
(96,110)
(528,673)
(3,442,127)
(1,359,340)
-
(4,801,467)
(4,763,369)
(1,141,114)
(2,264,497)
(8,168,980)
(103,425)
(9,927)
(518,952)
(632,304)
11,513,912
795,308
(2,879,559)
9,429,661
(193,859)
-
-
(193,859)
11,320,053
795,308
(2,879,559)
9,235,802
(2,488,290)
(930,857)
(444,661)
(3,863,808)
(70,537)
(17,279)
96,280
(70,580)
(17,688)
2,820
(135,142)
(276,259)
(8,956)
16,425
(43,923)
115,525
8,840,227
(220,997)
(3,451,893)
5,167,337
Licencing
£
Social
Publishing
£
Head
Office
£
Total
£
14,937,036
3,690,485
23,000
18,650,521
-
(38,391)
112,147
(17,164)
-
112,147
(78,244)
(133,799)
(2,579,127)
(1,308,520)
-
(3,887,647)
(4,176,964)
(1,001,569)
(1,764,925)
(6,943,458)
(149,753)
(1,666)
(200,307)
(351,726)
7,992,801
1,473,713
(2,020,476)
7,446,038
(1,996,909)
(943,384)
(731,086)
(3,671,379)
(60,215)
(10,087)
26,658
(59,822)
(11,239)
(138,478)
(372,716)
(258,515)
(394,042)
-
375,000
401,658
5,952,248
459,268
(2,887,756)
3,523,760
The Group’s non-current assets (excluding deferred tax assets) by geographical area are detailed below.
UK
USA
Canada
Malta
2023
£
2022
£
12,723,635
12,038,678
1,642
1,040
1,054,057
1,043,871
-
13,470
13,779,334
13,097,059
Strategic ReportCorporate Governance
48
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
12. Finance income and expense
Finance income
Interest received
2023
£
2022
£
85,679
-
Net release of derivative liability on non-conversion of loan
21
-
375,000
Interest income on unwind of deferred income
Total finance income
29,846
26,658
115,525
401,658
Finance expense
Bank interest paid and bank fees
Fair value movement on derivative liability
Effective interest on other creditor
Interest expense on lease liability
Total finance expense
13. Taxation
Current tax
Current tax charge
Adjustment for current tax of prior periods
Total current tax
Deferred tax
Recognition of deferred tax asset
Overseas temporary differences
Total deferred tax credit
Total tax credit
21
21
20
28,538
20,445
-
-
15,385
43,923
112,000
237,157
24,440
394,042
2023
£
2022
£
(745,653)
(312,922)
43,160
(8,414)
(702,493)
(321,336)
1,603,593
287,407
(143,434)
124,284
1,460,159
411,691
757,666
90,355
Financial Statements
49
The reasons for the difference between the actual tax credit for the period and the standard rate of corporation tax in the UK
applied to profits for the year are as follows:
Profit before tax for the year
Expected tax at effective rate of corporation tax in the UK of 23.52% (2022: 19.0%)
Expenses not deductible for tax purposes
Income not chargeable for tax purposes
Share scheme deductions under Part 12 CTA 09
Effects of overseas taxation
Adjustment for tax in respect of prior periods
Research and development tax credit
Movement in deferred tax not previously recognised
Difference between current and deferred tax rates
Recognition of deferred tax asset on losses previously unrecognised
2023
£
2022
£
5,167,337
3,523,760
1,215,358
47,717
(32,825)
(62,044)
292,759
(43,160)
669,514
141,812
(71,278)
-
(93,850)
8,414
(159,701)
(131,100)
(590,553)
(326,460)
(30,116)
-
(1,395,101)
(287,407)
(757,666)
(90,355)
The Group has a net corporation tax payable at the balance sheet date of £34,670 (2022: £276,123) being the £702,493
current tax charge for the year, less £935,660 payments made during the year (including settlement of the brought forward
payable) and £8,286 of foreign exchange differences relating to US corporation tax payments.
Deferred Tax
The analysis of deferred tax included in the financial statements at the end of the year is as follows:
Deferred tax assets
Tax losses carried forward
Deferred tax assets
Deferred tax liabilities
Overseas temporary differences
Business combinations - acquired intangibles
Deferred tax liabilities
Net deferred tax asset
The deferred tax included in the Group income statement is as follows:
Deferred tax asset recognised for losses
Overseas temporary differences
Unwind of deferred tax liability on business combinations
Exchange differences
Total deferred tax credit
2023
£
2022
£
1,891,000
287,407
1,891,000
287,407
(219,921)
-
-
(75,592)
(219,921)
(75,592)
1,671,079
211,815
2023
£
2022
£
1,603,593
287,407
(219,921)
-
75,592
124,284
895
-
1,460,159
411,691
Strategic ReportCorporate Governance
50
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
13. Taxation (continued)
The deferred tax movement on the balance sheet is as follows:
As at the start of the year
Deferred tax asset recognised for losses
Unwind of deferred tax liability on business combinations
Overseas temporary differences
Exchange differences
As at the end of the year
2023
£
2022
£
211,815
(199,876)
1,603,593
75,592
(219,026)
(895)
287,407
124,284
-
-
1,671,079
211,815
The Group has unused UK tax losses carried forward as at the balance sheet date of £28.4m (2022: £30.6m) and US tax losses
carried forward of $3.9m (2022: $3.9m). Given the Group now has a three-year track record of delivering pre-tax profits, along
with expected future profitability levels forecast by management, the Directors have recognised a deferred tax asset of £1.9m
(2022: £0.3m) relating to unused tax losses that are expected to be offset against the Group’s taxable profits generated over the
following two accounting periods (2022: one accounting period). The Directors consider two years to be prudent and appropriate
for a number of factors, including the changing and uncertain regulatory environment, notably but not limited to the UK, and
uncertainty around the timing of entry into planned new markets. Management have based their assessment on the latest Group
forecasts approved by the Board. No deferred tax has been recognised on £20.8m (2022: £29.4m) of UK losses carried forward
that are not expected to be utilised over the next two accounting periods. No deferred tax has been recognised on $3.9m (2022:
$3.9m) of US tax losses carried forward, as the Directors do not anticipate future profits in the Company where these losses
reside.
No deferred tax asset is recognised in respect of potential share scheme deductions under part 12 of the Corporation Tax Act
2009, since management have restricted the deferred tax asset recorded on unused UK losses to two years. The unrecognised
deferred tax asset on unexercised share options is £1,057,112.
The amount of the asset is determined using tax rates that have been enacted or substantively enacted at the balance sheet date
and are expected to apply when the deferred tax assets are recovered. From April 2023, there is no longer a single Corporation
Tax rate for non-ring fence profits. At the Spring Budget 2021, the UK government announced that the Corporation Tax main rate
for non-ring fence profits would increase to 25% for profits above £250,000.
14. Earnings per share
Basic earnings per share is calculated by dividing the result attributable to ordinary shareholders by the weighted average number
of shares in issue during the year. The calculation of diluted EPS is based on the result attributable to ordinary shareholders and
weighted average number of ordinary shares outstanding after adjusting for the effects of all dilutive potential ordinary shares.
The Group’s potentially dilutive securities consist of share options (see Note 23) and a convertible loan that was repaid in full
during the prior year. The convertible loan was anti-dilutive in the prior year so was not included in the diluted EPS calculation.
Profit after tax attributable to the owners of the parent Company
Financial Statements
51
2023
£
2022
£
5,925,003
3,614,115
Number
Number
Denominator - basic
Weighted average number of ordinary shares
292,715,123
291,655,659
292,715,123
291,655,659
9,961,871
7,057,892
302,676,994
298,713,551
Pence
Pence
2.02
1.96
1.24
1.21
Denominator - diluted
Weighted average number of ordinary shares
Weighted average number of option shares
Weighted average number of shares
Basic earnings per share
Diluted earnings per share
15. Intangible assets
Cost
Goodwill
£
Customer
database
£
Software
£
Development
costs
£
Licenses
£
Domain
names
£
Intellectual
Property
£
Total
£
At 1 January 2022
6,673,924 1,490,537 1,354,602
17,843,431
247,322
8,874
5,859,424
33,478,114
Additions
-
Exchange differences
125,326
-
-
54,229
4,009,171
71,455
-
14,080
694
-
-
-
-
4,134,855
140,100
At 31 December 2022
6,799,250 1,490,537 1,408,831
21,866,682
319,471
8,874
5,859,424
37,753,069
Additions
Disposals
-
-
Exchange differences
(53,694)
-
16,627
4,633,403
141,124
(5,124)
-
-
-
-
(80,398)
(36,573)
(292)
-
-
-
-
-
-
4,791,154
(85,522)
(90,559)
At 31 December 2023
6,745,556 1,485,413 1,425,458
26,463,512
379,905
8,874
5,859,424
42,368,142
Accumulated amortisation and impairment
At 1 January 2022
1,650,000 1,490,537 1,310,294
12,475,353
43,469
8,874
4,683,679
21,662,206
Amortisation charge
Exchange differences
-
-
-
-
73,177
2,781,155
85,961
-
(3,368)
-
-
-
731,086
3,671,379
-
(3,368)
At 31 December 2022
1,650,000 1,490,537 1,383,471
15,253,140
129,430
8,874
5,414,765
25,330,217
Amortisation charge
Disposals
Exchange differences
-
-
-
-
33,347
(5,124)
-
-
-
3,239,928
-
(13,137)
145,874
(80,398)
65
-
-
-
444,659
3,863,808
-
-
(85,522)
(13,072)
At 31 December 2023
1,650,000 1,485,413 1,416,818
18,479,931
194,971
8,874
5,859,424
29,095,431
Net book value
At 31 December 2022
5,149,250
At 31 December 2023
5,095,556
-
-
25,360
6,613,542
190,041
8,640
7,983,581
184,934
-
-
444,659
12,422,852
-
13,272,711
* Brought forward cost and accumulated amortisation has been updated. No changes to net book value at 31 December 2022 or
31 December 2023 in total or by category.
The Group has no contractual commitments for development costs (2022: none).
Strategic ReportCorporate Governance
52
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
15. Intangible assets (continued)
Goodwill
The Group has 2 Cash Generating Units (“CGUs”) (2022: 2) for which the carrying amount of goodwill is allocated as follows:
Licensing
Social Publishing
2023
£
2022
£
4,929,352
4,975,634
166,204
173,616
5,095,556
5,149,250
Impairment of goodwill
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. A detailed impairment test was
undertaken at 31 December 2023 to assess whether the carrying value of assets was supported by its recoverable amount.
The recoverable amount is the higher of fair value less costs of disposal, and value in use. The use of this method requires the
estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.
No indicators of impairment arose as a result of this review.
The recoverable amounts of both CGUs have been determined from value in use calculations based on cash flow projections from
formally approved budgets. Cash flow projections have been prepared by management for a three-year period to 31 December
2026, which have been presented and approved by the Board. These projections have been extended by a further 2 years using
estimated growth rates to give 5-year projections. Other major assumptions are as follows:
2023
Licensing
Social Publishing
2022
Licensing
Social Publishing
Discount
rate
Long−term
growth rate *
22.8%
22.8%
19.0%
19.0%
2%
2%
2%
2%
* The growth rate assumptions apply only to the period beyond the formal budgeted period with the value in use calculation based on an
extrapolation of the budgeted cash flows for year 5.
The discount rates used in discounting the projected cash flows are based on the Group’s Weighted Average Cost of Capital, after
considering the specific risks of the different CGU’s.
The discount rates used have been considered based on the risks involved in each of the underlying business units and terminal
growth rates and reflect the expected growth in underlying EBITDA expected from these units. These CGUs have been considered
for impairment and sensitivities have been calculated around the terminal growth rates and discount factors used together with
specific scenarios including the loss of revenue where those revenues might be considered to be at risk.
No indicators of impairment have arisen as a result as the impact of all sensitivities were judged to be within tolerable levels.
Financial Statements
53
16. Property, plant and equipment
Cost
At 1 January 2022
Additions
Disposals
Exchange differences
At 31 December 2022
Additions
Disposals
Exchange differences
At 31 December 2023
Accumulated deprecation
At 1 January 2022
Depreciation charge
Disposals
Exchange differences
At 31 December 2022
Depreciation charge
Disposals
Exchange differences
At 31 December 2023
Net book value
At 31 December 2022
At 31 December 2023
ROU lease
assets*
£
Leasehold
improvements
£
Computers and
related equipment
£
Office furniture
and equipment
£
Total
£
720,042
181,228
(121,966)
5,021
784,325
67,481
-
-
329,375
121,306
-
65,262
1,182,160
2,798
305,332
-
(121,966)
279
4,038
1,825
11,163
67,760
454,719
69,885
1,376,689
25,893
-
(4,686)
805,532
-
-
(190)
67,570
73,876
(3,362)
(4,223)
521,010
15,839
-
(1,292)
84,432
115,608
(3,362)
(10,391)
1,478,544
405,927
37,202
198,057
56,395
154,349
13,579
84,605
5,982
697,581
258,515
(121,966)
-
-
-
(121,966)
3,215
191
2,196
1,548
441,525
50,972
284,858
63,925
159,083
12,311
-
(258)
600,350
342,800
205,182
-
(190)
63,093
16,788
4,477
101,360
(1,791)
(2,686)
381,741
3,505
-
(1,162)
66,268
7,150
841,280
276,259
(1,791)
(4,296)
1,111,452
169,861
139,269
5,960
18,164
535,409
367,092
* See Note 20 for further analysis by lease category.
Strategic ReportCorporate Governance
54
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
17. Other assets
Other assets
2023
£
2022
£
139,531
138,798
Other assets represent the rental deposit on operating leases and deposits held with third-party suppliers.
18. Trade and other receivables
Trade receivables
Other receivables
Tax and social security
Prepayments and accrued income
2023
£
2022
£
3,024,745
3,497,710
134,558
223,113
145,506
280,912
1,678,112
1,412,202
5,060,528
5,336,330
The carrying value of trade and other receivables classified at amortised cost approximates fair value.
All amounts shown fall due for payment within one year.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on
similar credit risk and aging.
Management have assessed the expected loss rate based on the Group’s historical credit losses experienced over the five-year
period ended 31 December 2023. The historical loss rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group’s customers. On the basis of this review, no impairment has been recorded (2022:
None).
19. Trade and other payables
Trade payables
Other payables
Tax and social security
Accruals and deferred income
2023
£
727,706
157,785
368,894
2022
£
669,024
118,777
464,557
2,128,863
2,017,961
3,383,248
3,270,319
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
Financial Statements
55
20. Leases
Group as a lessee
Set out below, are the carrying amount of the Group’s right-of-use asset and lease liability, along with the movements during the
year.
Right-of-use assets
At 1 January 2022
Additions
Amortisation
Exchange differences
At 31 December 2022
Additions
Amortisation
Exchange differences
At 31 December 2023
Lease liabilities
At 1 January 2022
Additions
Lease payments
Interest expense
Exchange differences
At 31 December 2022
Additions
Lease payments
Interest expense
Exchange differences
At 31 December 2023
Ageing of lease liabilities
Current
Non-current
Land and buildings
£
Motor vehicles
£
308,017
181,228
(150,861)
1,805
340,189
25,893
(156,472)
(4,428)
205,182
6,099
-
(3,488)
-
2,611
-
(2,611)
-
-
Land and buildings
£
Motor vehicles
£
335,176
181,228
(160,071)
24,219
2,267
382,819
25,893
(234,010)
15,328
(4,450)
185,580
Total
£
314,116
181,228
(154,349)
1,805
342,800
25,893
(159,083)
(4,428)
205,182
Total
£
341,114
181,228
(163,638)
24,440
2,267
385,411
25,893
5,938
-
(3,567)
221
-
2,592
-
(2,649)
(236,659)
57
-
-
2023
£
52,135
133,445
185,580
15,385
(4,450)
185,580
2022
£
217,731
167,680
385,411
Strategic ReportCorporate Governance
56
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
21. Financial instruments and risk management – Group
The Group is exposed through its operations to risks that arise from use of its financial instruments. The Group’s financial assets
and liabilities are shown on the face of the consolidated statement of financial position and are presented in the table below by
category, as defined by IFRS 9 ‘Financial Instruments’.
Financial assets
Cash and cash equivalents
Trade and other receivables
Accrued income
Other assets
Financial liabilities
Trade and other payables
Accruals
Lease liability
Amortised cost
Fair Value
2023
£
2022
£
2023
£
2022
£
7,455,316
2,922,775
3,159,303
3,643,216
1,260,642
1,101,410
139,531
138,798
885,491
787,801
2,128,863
1,417,961
185,580
385,411
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial assets and financial liabilities are recognised on the balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
The Group classifies its financial instruments in the following categories:
» Financial assets held at amortised cost;
» Financial assets held at fair value;
» Financial liabilities held at amortised cost; and
» Financial liabilities held at fair value.
The classification depends on the purpose for which the financial assets and liabilities were acquired. Management determines the
classification of its financial instruments at initial recognition or in certain circumstances on modification.
In the Directors’ opinion, there is no material difference between the book value and the fair value of any of the financial
instruments.
The Group has some exposure to credit risk and liquidity risk. There has been no material change to the financial instruments used
within the business during the year and therefore no material changes to the risk management policies put in place by the Board
which are now discussed below.
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. Whilst
acknowledging this responsibility, it has delegated the authority and day to day responsibility for designing and operating systems
and controls which meet these risk management objectives to the finance and administration function. The Board regularly
reviews the effectiveness of these processes in meeting its objectives and considers any necessary changes in response to changes
within the business or the environment in which it operates.
Currency risk
The Group is exposed to currency risk on translation and on sales and purchases that are denominated in a currency other than
Pounds Sterling (GBP). The currency in which these transactions are primarily denominated is US Dollars (USD) and Euros (EUR).
The Group’s policy is, where possible to allow Group entities to settle liabilities denominated in their functional currency with the
cash generated from their own operations in that currency. Where Group entities have liabilities denominated in a currency other
than their functional currency cash already denominated in that currency will, where possible, be transferred from elsewhere in
the Group.
Financial Statements
57
As of 31 December 2023 the Group’s net exposure to foreign exchange risk was as follows:
Net foreign currency financial assets
US Dollar
Euro
Other
2023
£
2022
£
2,358,406
1,973,465
857,828
-
996,279
153,892
3,216,234
3,123,636
The effect of a 20% strengthening in Sterling against other currencies, all other variables held constant, have resulted in a increase
in profit and an increase in net assets of £643,247 (2022:£624,727). A 20% weakening in the exchange rates would, on same
basis reduce profit after tax and decrease net assets by £643,247. (2022: £624,727).
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The
ongoing lease liabilities are included in the Group’s cash flow modelling.
The following table sets out the undiscounted contractual cash flows:
At 31 December 2023
Trade and other payables
Accruals
Lease liability
Total
At 31 December 2022
Trade and other payables
Accruals
Lease liability
Total
Within 1 year
£
1−2 years
£
Over 2 years
£
885,491
2,128,863
67,327
3,081,681
-
-
46,060
46,060
-
-
94,273
94,273
Within 1 year
£
1−2 years
£
Over 2 years
£
885,492
2,089,463
232,035
3,206,990
-
-
61,566
61,566
-
-
120,317
120,317
Credit risk
The Group’s trading is mainly exposed to credit risk through credit sales in both the Licencing and Social Publishing segments.
Generally, receivables are due and collected within 30 days of invoice or contract. See Note 18 for further detail on receivables
exposure and expected credit loss analysis.
Management considered the credit risk and the counterparty debt risk and recognised an impairment provision of £Nil (2022:
£Nil). In the opinion of management, the credit risk to cash and lease deposits is immaterial.
See further disclosure on results of expected credit losses in Note 18.
Capital management
The Group is funded through shareholders’ funds. The Group monitors its capital structure, which comprises all components of
equity (i.e. share capital, share premium, non-controlling interest and retained earnings) and monitors external debt. The Group is
not subject to any externally imposed capital requirements.
Strategic ReportCorporate Governance
58
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
21. Financial instruments and risk management – Group (continued)
Changes in liabilities
IAS 7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising
from financing activities, including both cash and non-cash changes. The Group’s liabilities arising from financing activities consist
of lease liabilities (see Note 20). A reconciliation between the opening and closing balances of these items is provided below.
2023
Opening balance
New leases entered into during the year
Cash paid
Unwind of discount
Exchange differences
Carried forward
2022
Fair value
of debt host
£
Obligation to
provide free services
£
Fair value of
derivative liability
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Opening balance
3,429,278
60,000
744,000
Fair value
of debt host
£
Obligation to
provide free services
£
Fair value of
derivative liability
£
New leases entered into during the year
Cash paid
Utilisation of free services
Partial conversion of loan
Unwind of discount
Exchange differences
Change in fair value
Release of liability on non-conversion
Carried forward
-
(3,166,435)
-
-
-
(60,000)
(500,000)
237,157
-
-
-
-
-
-
-
-
-
-
-
(375,000)
-
(106,000)
-
-
112,000
(375,000)
Lease
liability
£
385,411
25,893
(236,659)
15,385
(4,450)
185,580
Lease
liability
£
341,114
181,228
(163,638)
-
-
24,440
2,267
-
-
-
385,411
Financial Statements
59
22. Share capital
Ordinary shares
Ordinary shares of 10 pence each
293,667,839
29,366,782
292,006,775
29,200,676
The increase of 1,661,064 ordinary shares relates to the exercise of share options during the year (see Note 23). The changes in
share capital and share premium as a result of these events is shown below.
2023
Number
2023
£
2022
Number
2022
£
At 1 January 2022
Exercise of share options
Conversion of loan
At 31 December 2022
Exercise of share options
At 31 December 2023
Share capital
£
Share premium
£
28,970,262
13,332
217,082
29,200,676
166,106
29,366,782
87,370,856
-
282,918
87,653,774
79,114
87,732,888
23. Share-based payments
Gaming Realms 2013 EMI Plan
On 1 August 2013 the Company adopted the Gaming Realms 2013 EMI Plan to allow, at the discretion of the Board, eligible
employees to be granted EMI or non-EMI options at an exercise price to be determined by the Board not less than the nominal
value of a share. Options will vest subject to such time based and share price performance-based conditions as the Board may
determine.
Options to acquire ordinary shares under the EMI plan may be granted up to a maximum of £3m (based on the market value of
the shares placed under option at the date of the grant).
No consideration is payable for the grant of the option and the options are not transferable or assignable. Cash consideration is
paid to the Company by the employee at the point that the share options are exercised.
The following table illustrates the number and weighted average exercise price of share options:
Outstanding at 1 January 2022
Granted during the year
Exercised during the year
Number of options outstanding at 31 December 2022
Granted during the year
Forfeited during the year
Exercised during the year
Number of options outstanding at 31 December 2023
Exercisable at 31 December 2023
Weighted
average
exercise price
(pence)
16.39
32.50
10.00
18.76
-
28.08
14.76
16.61
17.34
Number
23,133,169
3,900,000
(133,332)
26,899,837
3,455,000
(266,668)
(1,661,064)
28,427,105
22,388,771
Strategic ReportCorporate Governance
60
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Options to subscribe under various schemes, including those noted in Directors’ interests in Note 9, are shown in the table below:
Date granted
Exercise price
(pence)
Exercisable between
2023
Number of
shares
2022
Number of
shares
Approved
2 April 2014
Approved
19 February 2015
Approved
15 October 2015
Approved
10 November 2015
Approved
28 July 2016
Unapproved
28 July 2016
Approved
1 May 2020
Unapproved
1 May 2020
Unapproved
1 May 2020
Approved
2 June 2020
Approved
28 July 2020
Approved
26 November 2020
Unapproved
26 November 2020
Approved
5 January 2021
Unapproved
6 January 2022
Unapproved
6 January 2022
Approved
6 January 2022
Unapproved
2 August 2023
23.00
33.00
25.13
25.00
20.00
20.00
10.00
10.00
10.00
20.00
20.00
20.00
20.00
22.40
32.50
32.50
32.50
0.00
1 April 2017 to 1 April 2024
771,003
1,015,199
19 February 2018 to 19 February 2025
15 October 2018 to 15 October 2025
10 November 2018 to 10 November 2025
28 July 2018 to 28 July 2026
28 July 2018 to 28 July 2026
172,475
450,000
184,975
167,500
30,000
172,475
475,000
560,175
167,500
30,000
3 February 2021 to 1 May 2030
700,000
1,333,336
3 February 2021 to 1 May 2030
1,300,000
1,300,000
1 May 2020 to 1 May 2030
750,000
750,000
3 February 2021 to 2 June 2030
5,000,000
5,000,000
1 August 2021 to 28 July 2030
8,846,152
8,846,152
26 November 2021 to 26 November 2030
2,350,000
2,500,000
26 November 2021 to 26 November 2030
500,000
1 January 2022 to 5 January 2031
-
500,000
350,000
6 January 2022 to 6 January 2025
2,000,000
2,000,000
15 October 2022 to 6 January 2032
1,000,000
1,150,000
15 October 2022 to 6 January 2032
750,000
750,000
1 July 2023- 30 June 2033
3,455,000
-
28,427,105
26,899,837
During the year 3,455,000 share options were granted to certain directors and employees. The shares options vest on 30 June
2026 providing an associated service condition is satisfied. The share options were valued as follows:
Grant date
No. of options
Vesting date
Model used
Share price at date of grant (pence)
Expected option life
Dividend yield
Fair value per option at grant date (pence)
Exercise price (pence)
Exercisable to
2 August 2023
3,455,000
30 June 2026
Black Scholes
35.00
3 years
n/a
0.35
-
30 June 2033
Financial Statements
61
The share option and related charges income statement expense comprises:
IFRS 2 share-based payment charge
Direct taxes related to share options
2023
£
419,961
212,343
632,304
2022
£
438,868
(87,142)
351,726
IFRS 2 (Share-based payments) requires that the fair value of such equity-settled transactions are calculated and systematically
charged to the statement of comprehensive income over the vesting period. The total fair value that was charged to the income
statement in relation to the equity-settled share-based payments was £419,961 (2022: £438,868).
Where individual EMI thresholds are exceeded or when unapproved share options are exercised by overseas employees, the Group
is subject to employer taxes payable on the taxable gain on exercise. Since these taxes are directly related to outstanding share
options, the income statement charge has been included within share option and related charges. The Group uses its closing
share price at the reporting date to calculate such taxes to accrue. The tax related income statement charge for the year was
£212,343 (2022: credit of £87,142).
24. Related party transactions
Jim Ryan is a Non-Executive Director of the Company and the CEO of Pala Interactive, which has a real-money online casino in
New Jersey, Pennsylvania and Ontario. During the year, total license fees earned by the Group were $84,630 (2022: $15,697)
with $13,613 due at 31 December 2023 (2022: $366). During the prior year the Group began distributing its content to certain
North American partners via Pala’s B2B platform distribution network, with platform fees of $18,626 being incurred (2022:
$1,477) with $3,566 unpaid at 31 December 2023 (2022: $984).
During the year £165,000 (2022: £150,000) of consulting fees were paid to Dawnglen Finance Limited, a company controlled
by Michael Buckley, which is included in the remuneration figure of £437,253 (2022: £357,500) shown in Note 9. No amounts
were owed at 31 December 2023 (2022: £Nil).
The details of key management compensation are set out in Note 8.
Strategic ReportCorporate Governance
62
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
25. Contingent liabilities
Judgement is required to interpret international tax laws relating to e-commerce in order to identify and value provisions in
relation to indirect taxes. The principal risks relating to the Group’s tax liabilities arise from domestic and international tax laws
and practices in the e-commerce environment which continues to evolve. The Group is basing its tax provisions on current (and
enacted but not yet implemented) tax rules and practices, together with advice received, where necessary, from professional
advisers, and believes that its accruals for tax liabilities are adequate for all open enquiry years based on its assessment of many
factors including past experience and interpretations of tax law. The Group monitors changes in legislation and updates its tax
liabilities accordingly. However, due to different interpretations and evolving practice there is a risk that additional liabilities
could arise.
26. Subsidiaries
The subsidiaries of the Company, all of which have been included in these consolidated financial statements, are as follows:
Name
Registered Office
Country of
Incorporation
Principal activity
Proportion held by
Parent Company
Proportion
held by Group
Blastworks Limited
2 Valentine Place, London, SE1 8QH
Alchemybet Limited
2 Valentine Place, London, SE1 8QH
Blastworks Inc.
300 Deschutes Way SW, Tumwater,
WA 98501
UK
UK
USA
IP owner
100%
Software Developer
100%
Social publishing
operator
100%
Backstage
Technologies, Inc.
808 Douglas Street, Victoria, BC,
V8W 2B6
Canada
Software Developer
100%
Alchemybet Malta
Holdings Limited
MK Business Centre, 115A Floor 2,
Valley Road, Birkirkara, BKR 9022
Alchemybet Malta
Limited
MK Business Centre, 115A Floor 2,
Valley Road, Birkirkara, BKR 9022
Malta
Malta
Holding company
100%
License holder
0%
Blueburra Holdings
Limited
49 Victoria Street, Douglas, Isle of
Man, IM1 2LD
Digital Blue Limited
49 Victoria Street, Douglas, Isle of
Man, IM1 2LD
Isle of Man
Marketing services
100%
Isle of Man
Marketing services
0%
100%
100%
100%
100%
100%
100%
100%
100%
Parent Company Statement of Financial Position
As at 31 December 2023
Company number: 04175777
Non-current assets
Investment in subsidiary undertakings
Property, plant and equipment
Other assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Non-current liabilities
Lease liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Retained earnings
Total equity
Financial Statements
63
Note
2
3
31 December
2023
£
31 December
2022
£
5,662,961
5,662,961
56,440
139,531
183,773
138,798
5,858,932
5,985,532
4
6,785,937
9,534,411
925,003
96,230
7,710,940
9,630,641
13,569,872
15,616,173
5
8,915,499
8,335,358
18,801
147,305
8,934,300
8,482,663
-
-
20,908
20,908
8,934,300
8,503,571
4,635,572
7,112,602
6
29,366,782
29,200,676
88,452,888
88,373,774
2,683,702
2,683,702
(115,867,800)
(113,145,550)
4,635,572
7,112,602
As permitted by section 408 of the Companies Act 2006, a separate profit and loss account of the Company is not presented. The
Company’s loss for the financial year was £3,142,211 (2022: £1,790,759).
The notes on pages 65 to 67 form part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 28 March 2024 and were signed on
its behalf by:
Mark Segal
Chief Executive Officer
Strategic ReportCorporate Governance
64
Gaming Realms plc Annual Report and Accounts 2023
Parent Company Statement of Changes in Equity
For the year ended 31 December 2023
1 January 2022
Loss for the year
Share-based payment on share options
Exercise of options
Conversion of loan
31 December 2022
Loss for the year
Share-based payment on share options
Exercise of options
31 December 2023
Share
capital
£
Share
premium
£
Merger
reserve
£
Retained
earnings
£
Total
equity
£
28,970,262
88,090,856
2,683,702
(111,899,659)
7,845,161
-
-
13,332
217,082
-
-
-
282,918
-
-
-
-
(1,790,759)
(1,790,759)
438,868
-
106,000
438,868
13,332
606,000
29,200,676
88,373,774
2,683,702
(113,145,550)
7,112,602
-
-
-
-
166,106
79,114
-
-
-
(3,142,211)
(3,142,211)
419,961
-
419,961
245,220
29,366,782
88,452,888
2,683,702
(115,867,800)
4,635,572
The notes on pages 65 to 67 form part of these financial statements.
Financial Statements
65
Notes to the Parent Company Financial Statements
For the year ended 31 December 2023
1. Principal accounting policies
These financial statements present the results of Gaming Realms plc for the year ended 31 December 2023.
The Company is the ultimate parent company of the Gaming Realms Group and is admitted to trading on the Alternative
Investment Market (AIM) of the London Stock Exchange. It is incorporated and domiciled in the UK. The address of its registered
office is Two Valentine Place, London, SE1 8QH.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
The financial statements are prepared under the historical cost convention. No profit and loss account is presented by the
Company as permitted by Section 408 of the Companies Act 2006.
The financial statements are prepared in British Pounds Sterling.
Basis of preparation
The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended
31 December 2023.
The Company has taken advantage of the following disclosure exemptions under FRS 101:
a) IFRS 2 Share-based Payment disclosure, the share-based payment arrangement concerns its own equity instruments and its
separate financial statements are presented alongside the consolidated financial statements of the Group;
b) IFRS 7 Financial Instruments disclosures, given that equivalent disclosures are included in the consolidated financial statements
of the Group in which the entity is consolidated;
c) IFRS 13 Fair Value Measurement disclosures;
d) Certain disclosures required by IAS 1 Presentation of Financial Statements, including certain comparative information in respect
of share capital movements;
e) IAS 7 Statement of Cash Flows and related notes;
a) IAS 24 Related Party Disclosures relating to key management personnel compensation; and
g) IAS 24 Disclosure of related party transactions entered into between two or more members of a group, given that any
subsidiary which is party to the transaction is wholly owned by such a member.
Investments
Investments in subsidiaries and associates are stated at cost less provision for impairment in value, except for investments acquired
before 1 October 2013 (date of adoption of IFRS) where shares issued to effect business combinations and the conditions of the
Companies Act 2006 are met, merger relief was applied and the resulting investment is recorded at the nominal value of the
shares issued.
Taxation
Current tax, including UK corporation tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws
that have been enacted or substantively enacted by the balance sheet.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date,
where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have
occurred at the balance sheet date.
Deferred tax is measured at the average tax rates that are expected to apply in the period in which the timing differences are
expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Foreign currencies
Transactions denominated in foreign currencies are recorded at exchange rates as of the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that
date.
Financial liabilities
Financial liabilities held by the company consist of trade payables, long-term borrowings and other short-term monetary liabilities,
which are held at amortised cost, and derivative liabilities which are held at fair value through profit and loss.
Strategic ReportCorporate Governance
66
Gaming Realms plc Annual Report and Accounts 2023
Notes to the Parent Company Financial Statements
For the year ended 31 December 2023
2. Investments
At 31 December 2022 and 31 December 2023
Details of the Company’s investments can be found in Note 26 of the consolidated financial statements.
Investment in
subsidiary
undertakings
£
5,662,961
3. Property, plant and equipment
Cost
At 1 January 2023
Additions
At 31 December 2023
Accumulated deprecation and impairment
At 1 January 2023
Depreciation charge
At 31 December 2023
Net book value
At 31 December 2022
At 31 December 2023
4. Trade and other receivables
Amounts due from Group companies
Tax and social security
Other debtors
Prepayments and accrued income
ROU lease
assets
£
Leasehold
improvements
£
Computers
and related
equipment
£
Office
furniture and
equipment
£
Total
£
603,097
60,968
-
-
603,097
60,968
438,445
121,138
559,583
44,298
12,194
56,492
14,133
1,737
15,870
11,725
1,567
13,292
20,000
698,198
6,072
7,809
26,072
706,007
19,957
514,425
243
135,142
20,200
649,567
164,652
43,514
16,670
4,476
2,408
2,578
43
183,773
5,872
56,440
2023
£
2022
£
6,616,495
9,304,706
24,388
86,992
1,262
-
143,792
142,713
6,785,937
9,534,411
The balances due from fellow Group companies are repayable on demand and interest free. Management has assessed its
receivables from Group companies using a forward-looking expected credit loss model. The methodology used in determining the
amount of provision as at the reporting date is that of lifetime expected credit losses which is defined as a credit loss estimate of
the present value of cash shortfalls over the expected life of the financial assets (receivables from Group companies).
The expected credit loss charge in the year was calculated to be £Nil (2022: £Nil).
Financial Statements
67
2023
£
2022
£
7,762,248
7,546,692
46,531
140,687
1,026,726
618,627
79,994
29,352
8,915,499
8,335,358
5. Trade and other payables
Creditors: amounts falling due within one year
Amounts due to Group companies
Trade creditors
Accruals and deferred income
Tax and social security
6. Called up share capital
Allotted, called up and fully paid
Ordinary shares of 10 pence each
293,667,839
29,366,782
292,006,775
29,200,676
2023
Number
2023
£
2022
Number
2022
£
Allotted and fully paid up
At 1 January 2022
Exercise of options
Conversion of loan
At 31 December 2022
Exercise of options
At 31 December 2023
£
28,970,262
13,332
217,082
29,200,676
166,106
29,366,782
7. Employee information
The Company had an average of 7 (2022: 6) employees during the year.
The employee costs for the Company were £1,643,601 (2022: £1,201,297).
Details of Directors’ remuneration can be found in Note 9 of the consolidated financial statements.
8. Related party transactions
During the year £165,000 (2022: £150,000) of consulting fees were paid to Dawnglen Finance Limited, a company controlled
by Michael Buckley. No amounts were owed at 31 December 2023 (2022: £Nil).
The details of key management compensation are set out in Note 8 of the consolidated financial statements.
Strategic ReportCorporate Governance
68
Gaming Realms plc Annual Report and Accounts 2023
Company Information
Directors
Michael Buckley, Executive Chairman
Mark Segal, Chief Executive Officer
Geoff Green, Chief Financial Officer
Jim Ryan, Non-executive Director
Mark Wilson, Non-executive Director
Mark Blandford, Non-executive Director
Anna Massion, Non-executive Director
Company Secretary
Mark Segal
Auditors
BDO LLP, 55 Baker Street, London, W1U 7EU
Bankers
Barclays Bank plc, 1 Churchill Place, London, E14 5HP
Nominated advisors and Joint Brokers
Peel Hunt, 120 London Wall, London, EC2Y 5ET
Joint Brokers
Investec, 30 Gresham Street, London, EC2V 7QN
Solicitors
Memery Crystal LLP, 44 Southampton Buildings, London WC2A 1AP
Registrars
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS13 8AE
Registered office
Two Valentine Place, London, SE1 8QH
Registered Number
04175777
Gaming Realms plc
Two Valentine Place
London
SE1 8QH
UK
www.gamingrealms.com