GAN Limited (GAN): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at GAN Limited right after the May 2025 SEGA SAMMY acquisition, wondering if that $96.0 million buy-in truly changes the game, especially after seeing B2B revenue dip to just $5.1 million in Q1 2025. Honestly, while the new capital is a huge tailwind, the core iGaming market dynamics haven't magically disappeared; the rivalry is still fierce, and suppliers still hold cards, particularly those with must-have content. We need to cut through the noise and see exactly where the pressure points are-from customer switching costs to the threat of in-house platforms-so let's break down the five forces shaping GAN Limited's path forward right now.

GAN Limited (GAN) - Porter's Five Forces: Bargaining power of suppliers

When you look at the input side of GAN Limited's business, you see a mix of highly specialized partners and more standard service providers. Determining the power these suppliers hold is key to understanding GAN's margin potential and operational risk, especially heading into late 2025.

The power held by game content providers is definitely high. The industry is seeing an 'arms race for branded IP,' meaning studios with unique, in-demand titles-like licensed board games or major media tie-ins-can command better terms because the core game catalog is becoming commoditized. Studios know that differentiation is everything, so they hold the cards when negotiating distribution agreements with platform providers like GAN Limited.

Platform infrastructure, on the other hand, shows signs of supplier power limitation. While hyperscale cloud providers were the staple, iGaming platforms are now actively diversifying toward hybrid infrastructure setups. This shift is driven by concerns over unexpected costs and service complexities, suggesting that GAN Limited and peers have more options for compute resources, which limits any single cloud provider's leverage. Agility in infrastructure is becoming a priority for compliance across shifting regulatory landscapes.

Key B2B suppliers, which in this context often means the game studios or the operators using GAN's GameSTACK platform, can switch distribution channels. The recent performance swing at GAN Limited highlights this risk clearly. For instance, the expiration of a multistate B2B commercial contract caused GAN's B2B segment revenue to plummet from $12.3 million in the first quarter of 2024 to just $5.1 million in the first quarter of 2025. This massive drop underscores that a key B2B relationship, whether a content partner or a major client, wields substantial power to disrupt GAN's revenue base.

Specialized payment processors command significant leverage, primarily because the iGaming sector is classified as high-risk, demanding rigorous Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance. Processors that can automate these checks using AI-reducing friction and fraud risk-become indispensable. For example, in 2024, Trustly processed $100 billion in instant Pay by Bank transactions, a 50% increase from 2023, and operators using their Pay by Bank solution reported savings up to 50% compared to debit card transactions. This technological edge in compliance and speed translates directly into supplier power.

GAN Limited's ability to manage input costs is suggested by its historical gross margin performance. The gross profit margin for the fiscal year ending December 2024 was 70.1%. This figure, which aligns closely with the approximate 70% benchmark, suggests that GAN has, historically, maintained reasonable control over the direct costs associated with delivering its B2B SaaS solutions and B2C operations, despite the pressures from content and payment specialists.

Here is a quick look at the financial context surrounding these supplier dynamics:

The bargaining power of suppliers for GAN Limited can be summarized by the following key dependencies:

• Proprietary content creators hold high leverage.
• Specialized payment processors gain power via regulatory compliance.
• Cloud infrastructure shows movement toward commoditization.
• B2B contract stability is a critical, high-stakes negotiation point.

Finance: draft sensitivity analysis on content licensing cost vs. margin by next Tuesday.

GAN Limited (GAN) - Porter's Five Forces: Bargaining power of customers

You're analyzing GAN Limited's B2B customer power, and the recent financial results from Q1 2025 definitely paint a clear picture of the risk involved. For B2B customers, specifically U.S. casino operators using the GameSTACK platform, their bargaining power is generally considered high because platform switching costs are definitely decreasing over time. This is a constant pressure point for GAN Limited.

The impact of this power was starkly evident following the expiration of a major multi-state B2B commercial contract. This single event caused B2B segment revenue to plummet to just $5.1 million in Q1 2025, down significantly from $12.3 million in the first quarter of 2024. To put the scale of that customer relationship into perspective, B2B Gross Operator Revenue fell from $632.0 million in Q1 2024 to $144.6 million in Q1 2025. That's a massive swing driven by one customer relationship ending.

Here's a quick look at how the two segments fared in Q1 2025 compared to the prior year, showing the dual nature of GAN Limited's customer base:

On the other side of the coin are the B2C customers, the Coolbet players. For this group, the bargaining power is effectively zero in terms of contract leverage, but they are highly price sensitive. They have essentially zero switching costs between different B2C apps, so price and product experience are everything. Still, the B2C segment showed robust growth, with revenue climbing to $24.3 million in Q1 2025 from $18.3 million the year before.

However, the B2B side has structural mitigants that help GAN Limited manage this buyer power in the longer term. Long-term B2B contracts for the GameSTACK platform are designed to lock in revenue streams and mitigate the immediate threat of short-term customer power shifts. Also, regulatory requirements in certain jurisdictions tie B2B customers to platforms that are compliant with state or national gaming laws, which slightly reduces their leverage to jump ship to a non-compliant or uncertified provider like GameSTACK.

The financial reality of this dynamic is clear when you look at the bottom line. The lower B2B revenues directly contributed to a wider net loss of $6.8 million in Q1 2025, compared to the $4.2 million loss reported in Q1 2024. The company's cash position as of March 31, 2025, stood at $39.9 million, which provides a buffer while management works to secure new, long-term B2B deals.

You should watch these factors closely:

• B2B contract renewal success rates.
• The pace of new GameSTACK platform integrations.
• B2C segment contribution margin improvement.
• The impact of the expected merger closing in Q2 2025.

Finance: draft 13-week cash view by Friday.

GAN Limited (GAN) - Porter's Five Forces: Competitive rivalry

You're looking at a sector where scale dictates survival, and for GAN Limited, the competitive rivalry is definitely intense. The fragmented, rapidly growing global iGaming market means every percentage point of market share is fought for aggressively.

Rivalry is extremely high in the fragmented, rapidly growing global iGaming market. The global iGaming market is projected to reach $117.5 billion by late 2025, fueling aggressive competition. To give you a sense of the disparity in resources, consider the market capitalization as of November 2025:

Major competitors like Kambi, Scientific Games, and DraftKings/FanDuel (in-house tech) are larger and better capitalized. DraftKings, for instance, maintained a full-year 2025 revenue guidance midpoint of $6.45 billion and an Adjusted EBITDA guidance between $800 million and $900 million for the full year.

GAN's B2C Coolbet operation competes directly on customer acquisition costs and promotional spend in Europe and Latin America. This is a cash-intensive battleground. For context on the scale of marketing spend in a key region, UK gambling companies spent an estimated £2 billion on advertising and marketing last year. Meanwhile, the Latin American iGaming sector, where Coolbet is active in Colombia, Ecuador, and Mexico, is projected to reach US$6 billion by the end of 2025.

GAN's B2B segment is challenged by the market's concentration among a few dominant platform providers. The B2B segment of the iGaming Platform and Sportsbook Software Market accounts for 55% of the market. You see clear dominance from major content suppliers in key regions, which highlights the difficulty for a platform provider like GAN to gain traction without deep integration or superior technology.

• Pragmatic Play leads South America with a 19.3% market share.
• Evolution leads North America with a 12.5% market share.
• The demand for customizable B2B platforms with API integration has increased by 40%.
• GAN Limited relied on FanDuel for 15.3% of its total revenue in 2024.

The expiration of GAN's U.S. commercial contract with FanDuel in January 2025 underscores the customer concentration risk inherent in this rivalry.

GAN Limited (GAN) - Porter's Five Forces: Threat of substitutes

You're assessing the competitive landscape for GAN Limited (GAN) as of late 2025, and the threat of substitutes is a major factor, especially as the digital gaming space matures. Honestly, the substitutes aren't just other websites; they are entire established industries and the internal capabilities of your own potential clients.

In-house platform development by large B2B operators is a direct, viable substitute for GameSTACK

Large B2B operators, the very clients GAN Limited (GAN) targets, are increasingly investing in proprietary technology stacks. The industry trend in 2025 shows a focus on adopting technologies like Artificial Intelligence (AI) and blockchain, which large operators may choose to build internally rather than license. For instance, top operators are leveraging AI/ML for personalization and fraud detection, capabilities that were once the exclusive domain of platform providers like GAN Limited (GAN). The push toward scalable, modular systems and SaaS solutions means a major operator could decide that building a custom, API-driven solution offers better long-term control and cost structure than relying on a third-party platform like GameSTACK. This decision represents a direct, make-or-buy substitution risk for GAN Limited (GAN)'s core offering.

Land-based casino gaming remains a primary substitute for online iGaming

While online gaming continues its rapid expansion, the physical casino floor still commands a massive share of the total gaming wallet. In 2025, total global gambling revenue, encompassing both online and land-based operations, is estimated to reach USD 449.67 billion. To put this in perspective for the US market, the commercial casino sector alone generated gaming revenue of $72 billion in 2024, accelerating by 7.5 percent. When tribal gaming performance is included, the US gaming industry reached close to $115 billion in revenue in 2024. The fact that New Jersey's online gaming revenue surpassed land-based casino revenue under non-pandemic conditions for the first time in October 2024 shows the digital shift, but the sheer scale of the land-based segment still represents a significant, established substitute for online play.

Non-iGaming digital entertainment (video games, streaming) competes for discretionary consumer time and spending

This is a softer, but persistent, competitive force. Consumers have finite time and money for entertainment. The global online gambling market is valued at approximately USD 91.63 billion in 2025. This figure competes directly against the massive spending on video games and streaming services. For example, the mobile gambling market is a significant slice of the pie, but it is fighting for attention against the billions spent on console games, PC gaming, and subscription streaming services. The competition is for the consumer's wallet share outside of regulated gambling, which is a constant drain on potential new or retained iGaming users.

Lottery and sports pools offer lower-tech, regulated gambling substitutes

Lotteries and sports pools provide a lower-tech, highly accessible, and government-sanctioned alternative to the full-service iGaming platforms that GAN Limited (GAN) supports. The global lottery market is substantial, projected to be valued at USD 235.82 billion in 2025 by one estimate, or USD 376.68 billion by another. In the US alone, the 45 state lotteries collectively generated roughly $100 billion in revenue in fiscal year 2022. Furthermore, online lottery participation now accounts for over 60% of total lottery activity, showing that this substitute is successfully digitizing its reach. Sports pools, often integrated into state-run systems, also siphon off wagers that might otherwise be placed through a full sportsbook platform. The global lottery market is expected to grow by USD 235.6 billion from 2025-2029.

Here's a quick look at the scale of the primary gambling substitutes relative to the online market:

The key takeaway for you is the sheer volume of dollars flowing through these alternative channels. The threat is multifaceted:

• Large operators building their own tech stacks.
• The persistent, massive revenue of physical casinos.
• The digital migration of the lottery segment.
• Competition for consumer attention from non-gambling digital entertainment.

If onboarding takes 14+ days, churn risk rises, especially when these substitutes offer instant gratification.

GAN Limited (GAN) - Porter's Five Forces: Threat of new entrants

You're looking at a market where the cost of entry isn't just about building a website; it's about navigating a labyrinth of state-by-state and country-by-country legal frameworks. For a pure-play startup, this regulatory burden is defintely a massive hurdle.

Regulatory licensing and compliance costs in the U.S. and Europe create a significant barrier to entry. The sheer scale of existing regulatory complexity suggests that capital outlay for compliance alone is prohibitive for a newcomer. For instance, studies show that European Union digital regulations alone impose up to $97.6 billion annually in total costs and revenue losses on U.S. companies, with direct annual compliance costs estimated at $2.2 billion for U.S. firms operating under those rules. This environment demands deep, pre-existing expertise that a startup simply won't have on day one.

High capital requirements for platform development and B2C customer acquisition are prohibitive. The global online gambling market is projected to reach $117.5 billion in 2025, but capturing even a fraction requires substantial upfront investment in technology that is already proven and compliant. Consider the capital intensity: GAN Limited, before its acquisition, raised net proceeds of $98.5 million in a December 2020 secondary offering to fund growth, which gives you a sense of the scale of funding needed just to compete on the technology and customer acquisition front.

GAN's backing by SEGA SAMMY (acquired for $96.0 million) provides a massive capital and brand moat. The final purchase price of $96.0 million in May 2025, paid in cash at $1.97 per share, signals that a deep-pocketed incumbent recognized the value of GAN's existing regulatory footprint and technology stack. This acquisition instantly shields GAN from the need to raise similar capital in the open market, a luxury new entrants will not have.

New entrants must overcome established network effects and long-term B2B operator contracts. The stickiness of these B2B relationships is starkly illustrated by GAN's own Q1 2025 results. When a single major multi-state B2B commercial contract expired in January 2025, GAN's B2B segment revenue plummeted to $5.1 million in Q1 2025 from $12.3 million in Q1 2024. That's a $7.2 million hole from one relationship ending. New competitors face the challenge of displacing these entrenched providers.

Here's the quick math on how quickly a B2B reliance can shift revenue streams:

The need for an immediate, large-scale game content library is a major hurdle for a pure-play startup. To attract and retain players in a market where Europe alone accounts for nearly 50% of the global online gambling share, a new platform must offer breadth. For context, established crypto-focused competitors are advertising libraries of over 6,500+ games, with some offering as many as 13,000+ games. A startup launching with a small, self-developed library simply cannot compete on content volume or variety against incumbents who have spent years integrating with major game studios.

The barriers to entry are compounded by the need to simultaneously secure:

• Jurisdiction-specific gaming licenses.
• A robust, scalable GameSTACK-like technology platform.
• A content portfolio exceeding 6,000 titles.
• B2C customer acquisition costs in a market where smartphones drive nearly 80% of access.

Finance: draft 13-week cash view by Friday.