New Jersey accepts gaming license. The company received the long-awaited, approval from New Jersey Division of Gaming Enforcement of its gaming license. While the approval does not distinguish between sports and esports betting, the company entered its application with one of the largest states for gambling in an effort to become the preeminent platform for esports betting. Next steps. The company's Vie gambling software platform will go through regulatory testing labs to determine if the software is compliant and meets regulatory standards. The testing could take approximately 3 to 10 weeks. Once the software is audited, the company could then be granted a transactional waiver. This will allow it to be in business and for customers to begin placing bets as soon as August, or more likely September. More rigorous and comprehensive tests will be performed in a process that could last years following the transactional waiver.Focus on marketing and adding more states. We believe that the company will focus on marketing efforts to raise awareness in New Jersey of its Vie sports and esports betting platform, with a budget to be determined. In addition, the company is in discussions to seek sports betting licenses in additional states. The experience gained from the New Jersey process will be valuable for future state gambling license reviews.Impact on revenues. We estimate that the impact from the New Jersey license on fiscal 2022 revenues will be somewhat small, at least initially. Our $70 million fiscal year 2022 revenue estimate assumes roughly $3 million in revenue from the company's Vie gambling platform, with roughly $1 million coming from New Jersey. We believe that this estimate may be conservative should the company carve out a niche in sports betting and that esports gambling develops more rapidly. Compelling risk/reward. Near current levels, the GMBL shares trade at 3.5 times Enterprise Value to our fiscal 2022 revenue estimate, or well below its igaming and esports peers, trading at average multiples of 8.5 times. In addition, the shares trade at roughly 60% below average M&A transaction multiples. The shares are rated Outperform with a $20 price target. Read More >>