April 8, 2020
Dermot Smurfit
Chief Executive Officer
GAN Limited
Axe & Bottle Court
70 Newcomen Street
London SE1 1YT
Re: GAN Limited
Registration Statement on Form F-1
Filed March 25, 2020
File No. 333-237372
Dear Mr. Smurfit:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
References to prior
comments refer to our letter dated February 27, 2020.
Registration Statement on Form F-1
Industry and Market Data, page iii
1. We note your response to prior comment 1 regarding the sources of your industry and market data. Please revise to provide more details of the reports cited, including the titles and dates of the referenced reports. Further, for your commissioned report from Eilers & Krejcik Gaming, LLC, please provide a consent pursuant to Rule 436.
Dermot Smurfit
FirstName LastNameDermot Smurfit
GAN Limited
Comapany NameGAN Limited
April 8, 2020
Page 8,
April 2 2020 Page 2
FirstName LastName
Risk Factors
We rely on a small number of customers for a substantial portion of our
revenues..., page 16
2. In response to prior comment 5, you state that you had a second customer, Winstar Casino, that represented 19.8% of your 2019 revenue. Please disclose the material terms of your agreement with Winstar Casino. In addition, given that FanDuel Group, Inc. accounted for 46.3% of your revenue in 2019, please file the agreements with FanDuel pursuant to Item 601(b)(10) of Regulation S-K, or explain why you are not substantially dependent upon those agreements. We are a smaller reporting company based on the SECs amendments..., page 29
3. We note your risk factor that you currently qualify as a smaller reporting company. Please note that a foreign private issuer are not eligible to use the requirements for smaller reporting companies unless it uses the forms and rules for domestic issuers. Please revise. Refer to SEC Release No. 34-88365. Capitalization, page 40
4. Please explain how the pro forma amounts represent those of GAN
Limited. In this
regard, we note that the pro forma column should present the
prospective share capital
balance of GAN Limited, instead of what appears to be GAN plc's share
capital balance.
Please advise.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 53
5. We note the revised disclosures provided in response to prior comment
14. Please revise
to also provide a discussion of segment profit. Refer to Item 5 of
Form 20-F and Section
III.B.2 of SEC Release 33-8350.
Internal Control Over Financial Reporting, page 60
6. Please revise to provide an update as of December 31, 2019. Comparison to Delaware Law and Bermudan Law, page 86
7. We note that your description of your bylaws no longer requires a
director to
disclose interested transactions that involve immediate family members
and no longer
provides that the board may vote to exclude the interested director
from voting on such
transactions. Please add a risk factor to discuss the potential
conflicts of interests of your
directors and the impact of the changes to your bylaws.
Dermot Smurfit
FirstName LastNameDermot Smurfit
GAN Limited
Comapany NameGAN Limited
April 8, 2020
April 3 2020 Page 3
Page 8,
FirstName LastName
Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
(g) Revenue Recognition, page F-12
8. We note your disclosure that your arrangements do not provide the
customer with the
right to take possession or control of your IP. However, we also note
disclosure on page 5
that your real money iGaming customers must physically deploy your
platform within
their state's borders and that your software is deployed inside of
your customers' data
centers. Please explain to us what you mean by "deploy" and
specifically explain how a
customer is able to deploy your software without taking possession.
9. You disclose that revenue from real money and simulated iGaming is
recognized over
time. Please tell us how you determined that recognition of revenue
over time was
appropriate and tell us which of the criteria in paragraph 35 of IFRS
15 was met. Also,
revise to disclose the methods used to recognize revenue and an
explanation of why the
methods used provide a faithful depiction of the transfer of goods or
services. Refer to
paragraph 124 of IFRS 15.
Note 3. Critical Accounting Estimates and Judgments
Revenue Recognition, page F-20
10. We note the revised disclosures provided in response to prior comment
18; however, it
remains unclear to us whether you are the principal or agent for your
real money and
simulated iGaming and how you arrived at those conclusions. Please
clarify for us, and
revise your disclosures to clearly state, whether you are the
principal or agent for these
arrangements. In your response, please provide a detailed analysis
supporting how you
arrived at the principal vs agent conclusions and refer to the
considerations in paragraphs
B34 B38 of IFRS 15 in your response. As part of your response,
specify who controls
the good or service before it is transferred to the customer. Please
provide a separate
analysis for your real money iGaming arrangements and for your
simulated iGaming
arrangements.
11. We note your disclosure that when you are the principal you record the
revenue share,
which represents the revenue exclusive of your customer's share of the
proceeds, as
revenue. If you are the principal, please explain to us, why you are
recording revenue net
of the customer's share.
12. You disclose that for certain contracts in the real money gaming
segment revenue is
recorded net of royalty costs. Please tell us more about these
arrangements, including the
nature of the services provided and explain your basis for recognizing
revenue net of
royalty costs. Refer to the authoritative guidance that supports your
accounting.
Dermot Smurfit
FirstName LastNameDermot Smurfit
GAN Limited
Comapany NameGAN Limited
April 8, 2020
Page 8,
April 4 2020 Page 4
FirstName LastName
General
13. We note your disclosure on page 51 regarding the impact of the COVID-19 pandemic on your operations due to the suspension of sports events and the closing of land-based casinos. You indicate that you considered that approximately 10% of your total revenues in 2019 are generated from sportsbook gambling in conducting a going concern assessment. To the extent material, discuss whether the company also considered the impact to other platforms such as fantasy sports gaming platforms and whether the overall potential decrease in users may result in a material impact in real money iGaming activities and resulting revenues. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Frank Knapp, Staff Accountant, at (202) 551-3805 or
Christine Dietz,
Senior Staff Accountant, at (202) 551-3408 if you have questions regarding
comments on the
financial statements and related matters. Please contact Edwin Kim,
Attorney-Advisor, at (202)
551-3297 or Jan Woo, Legal Branch Chief, at (202) 551-3453 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: James A. Mercer, III, Esq.