Inspired Entertainment, Inc. (NASDAQ:INSE) Q3 2018 Earnings Conference Call - Final Transcript
Aug 14, 2018 • 08:00 am ET
We will now begin the question-and-answer session. (Operator Instructions) Jordan Bender, Macquarie.
It's Chad Beynon from Macquarie. Just wanted to start with the Virtual Sports launch in Pennsylvania and obviously you mentioned that this took into effect your reduction or your target on the guidance range, but can you help us think about maybe the POS opportunity by the end of the year? Obviously this is very early and you probably can't talk to any results, but are there near-term goals in terms of how many locations you want to have these products rolled out to by the end of the year? And then secondarily, have you had any further conversations with states in the US? Or do you think they're kind of waiting to see how successful the launch is in Pennsylvania? Thanks.
Well, we'll have -- I'll ask Brooks to answer that question, Chad.
Yeah. In terms of -- so the distribution of retailers in Pennsylvania is, as Lorne mentioned, 1,500, as he called them, specialty retailers, are really bars and taverns, where they have monitors. They'll have two monitors for -- one for Xpress Sports or Xpress football, and the other one for car racing, but they'll also have a third monitor for Keno. And Keno was launched on May 1st, and they've built a business up on that basis.
And so we're -- quite frankly, this is new ground in North America, so the metrics we look at is really kind of population. We take a look at what the Keno sales are in comparable markets and what they're doing in Pennsylvania and try and get a rough estimate of what we think sales are. But as I said, this is a brand-new product in the North American market, so we're obviously tracking it very closely.
(Multiple Speakers) Yeah. So in terms of the number of retailers that's really in control of the Pennsylvania lottery. Obviously we're both hopeful, the lottery and ourselves, that sales will be very good and that they will want to add more and more locations. The original target was to have 3,000 locations. So as we said, we're at 1,500, so we're halfway there. And hopefully, this will drive retail recruitment going forward.
And then, I guess, moving around the globe, to Italy. I guess politically and from a regulatory standpoint there has been a lot of noise in the past couple of months. Can you just kind of flesh out in terms of what the final decision was with respect to SBGs in that market? Not looking for any quantification of what the impact is, but just can you help us think about kind of where we are from a regulatory standpoint in the taxation and when that goes into effect in the out-years? Thanks.
Yeah. Go ahead Brooks.
Yeah. So we are -- we don't believe that the tax impact is going to be significant for us. And I assume the second part of your question is in term of