Delivers strong quarterly performance with improvement in operating results over Q4-2021

Profitable B2C operations ahead of schedule in Italy

Continues its expansion efforts into the U.S. market

Announces exciting opportunities with Italy’s largest gaming operator with ambitious global expansion plans

Elys Game Technology, Corp. (“Elys” or the Company”)(Nasdaq: ELYS), an interactive gaming and sports betting technology company, today announced the financial results for the quarter ended March 31, 2022.

Release Highlights

• Quarter-on-quarter GAAP revenue (Q1-2022 vs Q4-2021) grew by $0.57 million or 5% to $12.2 million on the back of a strong Q4-2021 performance.
• Selling expenses in Q1-2022 decreased to $9.3 million (4.3% of turnover) from $9.9 million in Q4-2021 (4.6% of turnover).
• Q1-2022 non-GAAP betting handle (Turnover) was $217.6 million compared to Q4-2021 at $214.9 million, with an improved blended Gross Gaming Revenue hold of 7.0% compared to 6.8%.
• Disaggregated sportsbook hold continues to perform in double digits at an exemplary 18.3% for Q1-2022.

Michele Ciavarella, Executive Chairman of Elys Game Technology stated: “Elys continues to improve on its performance with another strong quarter achieving a turnover growth of $2.7 million over an already strong Q4-2021 performance. This growth was predominantly in our online betting channel in Italy while our Q1-2022 GAAP revenue also included an improvement in service revenues to $0.7 million from $0.6 million in Q4-2021.

We continue to invest in our sportsbook technology to enhance our remarkable product performance. Our betting platform is highly scalable and adaptable, making our cost of entry into new regulated markets highly attractive for our customers and for Elys. Our tactical movements in the Italian market have resulted in profitable achievements ahead of schedule as our divisional management at Multigioco took advantage of COVID lockdowns to port closed land-based operations and grow our online channel, and we expect that the recently obtained ADM (Italian regulator) rights in Italy will return Multigioco B2C land-based operations to pre-covid levels through the remainder of 2022. These improvements are in line with our strategy to deliver on our 2023 performance objectives. We are also on track to accomplish our pathway to profitability and remain fully committed to drive long-term shareholder value and are completely focused and better organized to deliver substantial sustainable growth in all our active markets.”

The decrease in revenue from Q1-2021 to Q2-2022 of $2.0 million is due to the pandemic related closure of our land-based locations in Italy from June 2021, impacting directly on the loss from operations. We anticipate that we will regain this market share and improve our performance as we deploy land-based operations in new locations throughout Italy in the coming 12 to 18 months.

North America Operational Highlights

We continue to leverage of our expansion into conventional casino resorts and non-conventional small business betting shops into the U.S. market. We are accelerating the signing of additional restaurants, bars and similar small business venues that Elys plans to expand across U.S. and Canada as regulations permit, including initiating land-based betting operations at Ocean Casino Resort in New Jersey ahead of a larger grand opening of the all-new sportsbook at Ocean expected to open in time for the next NFL season kick-off.

We are experiencing continued success, beyond our initial expectations, in our pilot launch at Grand Central Restaurant and Sportsbook which is increasing the interest of small business operators in our product offering in Washington D.C. as well as several other states.

Our strategy to develop and grow in the U.S. market resulted in an increase in: personnel costs of $0.4 million, primarily due to the acquisition of USB; professional and legal fees related to our expansion in the U.S. market of $0.25 million; and non-cash incentive compensation of $0.3 million.

Italian Operational Highlights

“As mentioned in our previous earnings release, at the height of the COVID pandemic we implemented a defensive strategy that included a stepped approach in Italy by first targeting growth towards our Multigioco online operations which had resulted in significant reduction of land-based handle and revenue that was offset by growth in our online betting turnover and that grew in Q1-2022 by $2.7 million over Q4-2021,” stated Interim CFO of Elys, Carlo Reali. “Commissions paid to agents decreased by $1.4 million to $9.3 million representing 4.3% of turnover compared to 4.4%, underlying our continuous efforts to improve our margins. As part of our B2C operational strategy in Italy, the second stage of growth began in Q1-2022 where we acquired approximately 50 ADM land-based license rights, and which we expect to increase by an additional 50 rights over the coming 12 to 18 months that are instrumental in re-deploying our retail distribution in Italy. We expect this investment in our land-based channel could generate additional revenue of approximately $20 million per year and return to pre-pandemic levels without significant costs. The additional ADM rights also afford us the ability to certify both our Italian land-based sportsbook and our Virtual Generation virtual sports platform that could also lead to additional B2B revenue opportunities as well as ancillary virtual sports content revenue in Italy and further across other European and South American markets.”

About Elys Game Technology, Corp.

Elys Game Technology, Corp., is a B2B global gaming technology company operating in multiple countries worldwide, with B2C online and land-based gaming operations in Italy. Elys offers its clients a full suite of leisure gaming products and services, such as sports betting, e-sports, virtual sports, online casino, poker, bingo, interactive games and slots in Italy and has operations in five states as well as the District of Columbia in the U.S. market. Elys’ vision is to become a global leader in the gaming industry through the development of pioneering and innovative technology.

The Company provides wagering solutions, services online operators, casinos, retail betting establishments and franchise distribution networks. Additional information is available on our corporate website at www.elysgame.com.

Investors may also find us on Twitter @ELYS_gaming.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions that are intended to identify forward-looking statements and include statements regarding enhancing product performance, returning Multigioco B2C land-based operations to pre-covid levels through the remainder of 2022, our strategy to deliver on our 2023 performance objectives, our pathway to profitability, our driving long-term shareholder value, being focused and better organized to deliver substantial sustainable growth in all our active markets, deploying land-based operations in new locations throughout Italy in the coming 12 to 18 months, accelerating the signing of additional restaurants, bars and similar small business venues that Elys plans to expand across U.S. and Canada as regulations permit, the interest of small business operators in our product offering in Washington D.C. as well as several other states, increasing by an additional 50 rights over the coming 12 to 18 months that are instrumental in re-deploying our retail distribution in Italy, investment in our land-based channel, generating additional revenue of approximately $20 million per year and return to pre-pandemic levels without significant costs, the ability to certify both our Italian land-based sportsbook and our Virtual Generation virtual sports platform, and additional B2B revenue opportunities as well as ancillary virtual sports content revenue in Italy and further across other European and South American markets. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to enhance product performance, the Company’s ability to return Multigioco B2C land-based operations to pre-covid levels through the remainder of 2022, the Company’s ability to deliver on our 2023 performance objectives, the Company’s ability to achieve it’s pathway to profitability, the Company’s ability to drive long-term shareholder value, the Company’s ability to be focused and better organized to deliver substantial sustainable growth in all our active markets, the Company’s ability to deploy land-based operations in new locations throughout Italy in the coming 12 to 18 months, the Company’s ability to accelerate the signing of additional restaurants, bars and similar small business venues that Elys plans to expand across U.S. and Canada as regulations permit, the Company’s ability to foster the interest of small business operators in our product offering in Washington D.C. as well as several other states, the Company’s ability to increase by an additional 50 rights over the coming 12 to 18 months, the Company’s ability to investment in our land-based channel, the Company’s ability to generate additional revenue of approximately $20 million per year and return to pre-pandemic levels without significant costs, the Company’s ability to certify both our Italian land-based sportsbook and our Virtual Generation virtual sports platform, the Company’s ability to generate additional B2B revenue opportunities as well as ancillary virtual sports content revenue in Italy and further across other European and South American markets, the duration and scope of the COVID-19 outbreak worldwide, including the impact to state and local economies, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and its subsequent filings with the U.S. Securities and Exchange Commission, including subsequent periodic reports on Form 10-Q and current reports on Form 8-K. The information in this release is provided only as of the date of this release, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220517005899/en/

We are on track to accomplish our pathway to profitability and remain fully committed to drive long-term shareholder value and are completely focused and better organized to deliver substantial sustainable growth in all our active markets