First company from the gaming sector comes out on the Bulgarian stock market

If we analyze the companies in Bulgaria, which generate the most revenue, we will come across a curious fact – the companies from the gaming industry rank next to technology companies and occupy leading positions in terms of contribution to the GDP of the country.

Actually, this is not surprising because gambling traditionally generates solid revenues and achieves a good profit margin. The gaming industry in the world is among the fastest developing economic sectors, which is justified by the flexibility of the companies and the speed with which they perceive and apply all technological innovations. And Bulgaria does not make an exception.

Something more – the sector is becoming more and more transparent and more and more competitive, which in turn provokes the interest of foreign companies to the Bulgarian market. With the exception of local large companies, many foreign companies from the industry created development centers in the country.

The speed at which the branch is developing is impressive and, if a few years ago it was unthinkable for a Bulgarian gaming company to go public, this will soon be a real fact. It is completely logical for companies from this important sector in our economy to be listed on the stock exchange.

But let’s start from a few years ago. Telematic Interactive Bulgaria EAD is a Bulgarian company, owned by Milo Borissov and Rosie McKee, whose business is precisely in the sphere of the online gaming industry, and since 2018 has been developing the brand of Palms Bet. Through the last two years the company registered a huge growth. For 2020, the company achieved a growth of revenues of 517% compared to 2019, and the expectations for this year are that it will be around 200%.

This trend of sustainable development shows that it is not due mainly to the pandemic, but to other more important factors. This makes the company owners to plan the listing on the Bulgarian Stock Exchange (BSE) at the beginning of 2022, with which the company will become the first Bulgarian public company from the gaming industry.

But what drives a company from a sector traditionally considered to be too specific to take such an avant-garde step for Bulgaria?

The initial public offering (IPO) will definitely change the game, because at the moment the view of the foreign consultants and stock investors on the Bulgarian market is strongly limited, partly because there are no public companies in the sector. The listing of Telematic Interactive Bulgaria EAD on the stock exchange will pave the way for other companies, which in turn will ensure greater comfort for investors to the industry and will direct potential stock investors to the local market that needs them.

What is new for Bulgaria, has been a practice for decades in the rest world. On the London Stock Exchange, stocks of gaming companies have been traded since 2002. In the US, almost all of medium-sized and large gaming companies raise capital via Wall Street. The same also applies to stock exchanges in Stockholm, Frankfurt and the Asia-Pacific region.

The owners of Telematic Interactive Bulgaria – Milo Borissov and Rosie McKee – are planning expansion within 24 months on another three regulated markets. In the future, IPOs are also planned to take place on foreign stock exchanges. For the time being, no more details are reported, but such actions are completely logical.

Except that it works in compliance with all normative and regulatory requirements, the company has several trump-cards as compared with the others. The main thing is that there is a huge product advantage – the company has its own platform which enables it to be flexible and independent of providers and suppliers. Along with that, it also has its own content that is used by 15-20 % of platform users. The remaining 80 % use content through it from other suppliers, which allows the support of a huge variety of products.

People from the industry, however, comment that the serious rise in the online gaming sector is not only due to the pandemic. It is rather a catalyst, but the main factor remains technology – mobile devices already provide excellent opportunities and, along with everything else, this becomes a good basis for development not only for the online gaming, but also for the so-called social gaming.

According to the European worldwide betting and gaming association, the revenues from online games, generated from gaming operators in the European Union in 2020, amount to EUR 26.3 billion, with the forecasts being that the market will grow to almost EUR 30 billion until 2022.

After the passing of the State Gambling Commission to the National Revenue Agency (NRA), it is still difficult to find specific data for the Bulgarian market, but even with a naked eye it is obvious that online betting and servicing businesses have a serious growth through the past year, and the companies in the industry are among the most active recruiters.

It is exactly the team that is another key factor for success of the company. In this regard, Telematic Interactive Bulgaria has an interesting strategy. The company reports a 500% growth in the number of employees for the last 4 years, with the characteristic feature here being that 90% of management and leadership positions are occupied by in-house personnel. The team is young and well trained and, thanks to the fact that it operates with its own platform and products, it succeeds to adjust easily to market sentiment and shocks.

There’s one more thing that distinguishes this company from the others in the sector – the company is socially responsible and stands behind causes with wide public resonance, such as the sponsorship of Levski PFC and the Golden Girls team. The company also promotes its brand through the Palms Music project, which is targeted to sponsoring cultural events and helping young musical talents.