What changed in this filing

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Item 1. Business

2023-03-16 compared with 2022-03-31 · 294 added, 330 removed, 456 unchanged (58% of the section changed)

On March 11, 2020, the World Health Organization

declared COVID-19 to be a global pandemic which affected our retail businesses throughout 2020.

From mid-December 2020 to mid-April 2021, all

retail venues were once again closed due to government-mandated shutdowns.

Full restrictions did not fall away in the United Kingdom

until July 2021 and there remains an element of social distancing in venues in Greece and in Italy.

It remains uncertain

as to whether and when further restrictions or closures could happen in each jurisdiction and how long they may last.

We continue to

protect our existing available liquidity by pro-actively managing capital expenditures and working capital as well as identifying both

immediate and longer-term opportunities for cost savings.

Entertainment, Inc.

(the “Company”, “Inspired”, “we” or “us”)

are a global gaming technology company, supplying content, platform and other products and services to online and land-based regulated

lottery, betting and gaming operators worldwide through a broad range of distribution channels, predominantly on a business-to-business

We provide end-to-end digital gaming solutions (i) on our own proprietary and secure network, which accommodates a wide range

of devices, including land-based gaming machine terminals, mobile devices and online computer applications and (ii) through third party

Our content and other products can be found through the consumer-facing portals of our interactive customers and, through our

land-based customers, in licensed betting offices, adult gaming centers, pubs, bingo halls, airports, motorway service areas and leisure

customer base includes regulated operators of lotteries, licensed sports bookmakers, gaming and bingo halls, casinos and regulated online

operators, adult gaming centers, pubs, holiday parks, and motorway service areas.

Some of our key customers include William Hill, SNAI,

Sisal, Lottomatica, Betfred, Paddy Power, Betfair, Genting, bet365, Sky Bet, Fortuna, the Greek Organisation of Football Prognostics

(OPAP S.A.), Entain Plc, the Pennsylvania Lottery, Bourne Leisure, Greentube, Stonegate, Mitchells & Butler, Marstons PLC, Greene

King, JD Wetherspoon PLC, Parkdean Resort, Centre Parcs Resorts and Novomatic.

Geographically, 71% of our revenues (excluding

VAT-related revenue) for the year ended December 31, 2021 were generated from our UK operations, with the remainder generated from Italy,

Greece and the rest of the world.

Our products are designed to operate within applicable gaming and lottery regulations and our customers

are regulated gaming or lottery operators or are otherwise licensed to operate our products.

(the “Company”, “Inspired”, “we” or “us”) is a global gaming technology

company, supplying content, platform and other products and services to online and land-based regulated lottery, betting and gaming operators

worldwide through a broad range of distribution channels, predominantly on a business-to-business basis.

We provide end-to-end digital

gaming solutions (i) on our own proprietary and secure network, which accommodates a wide range of devices, including land-based gaming

machine terminals, mobile devices and online computer applications and (ii) through third party networks.

Our content and other products

can be found through the consumer-facing portals of our interactive customers and, through our land-based customers, in licensed betting

offices, adult gaming centers, pubs, bingo halls, airports, motorway service areas and leisure parks.

Our customer base includes regulated operators of lotteries, licensed sports

bookmakers, gaming and bingo halls, casinos and regulated online operators, adult gaming centers, pubs, holiday parks, and motorway service

Some of our key customers include William Hill, SNAI, Sisal, Lottomatica, Betfred, Paddy Power, Betfair, Genting, bet365, Sky Bet,

Fortuna, the Greek Organisation of Football Prognostics S.A.

(OPAP.), Entain, the Pennsylvania Lottery, Bourne Leisure, Greentube, Stonegate,

Mitchells & Butler, Marstons, Greene King, JD Wetherspoon, Parkdean Resort, Centre Parcs Resorts and Novomatic.

Geographically, 73%

of our revenues (excluding VAT-related revenue) for the year ended December 31, 2022 were generated from our UK operations, with the remainder

generated from Greece and the rest of the world.

Our products are designed to operate within applicable gaming and lottery regulations

and our customers are regulated gaming or lottery operators or are otherwise licensed to operate our products.

conduct business across different jurisdictions of which Great Britain, Italy and Greece have historically contributed the most significant

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Des Marchés Financiers (Quebec), the Romanian National Gambling Office, Oficiul National pentru Jocuri de Noroc and we hold licenses

with the US States of California, Connecticut, Illinois, Michigan, Nevada, New Jersey, Oregon, West Virginia and the Canadian provinces

of Alberta, Nova Scotia and Saskatchewan.

We are currently in the process of applying, or planning to apply, for licensure in additional

North American jurisdictions, where we expect to benefit from any future market growth.

with the US States of Connecticut, Illinois, Michigan,, New Jersey, Oregon, Pennsylvania, West Virginia and the Canadian provinces of

Alberta, Nova Scotia, Ontario and Saskatchewan.

are headquartered in the United States, with principal operating facilities located in the United Kingdom, India and Italy.

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31, 2022, we had approximately 1,600 employees, approximately 1,500 of which were full-time.

We generated total revenue of $208.9 million and Adjusted EBITDA of $64.0

million for the year ended December 31, 2021, despite our business being materially impacted by the COVID-19 global pandemic.

year ended December 31, 2019 (our last full year prior to COVID-19 impacting our business), we generated total revenue of $153.4 million

and Adjusted EBITDA of $49.0 million.

We generated total revenue of

$285.4 million and Adjusted EBITDA of $99.6 million for the year ended December 31, 2022.

Company is publicly listed on the NASDAQ and had an equity market capitalization of approximately $328.27 million as of December 31,

31, 2021 (based upon a closing stock price of $12.96 on that date).

2022 (based upon a closing stock price of $12.67 on December 30, 2022).

product and company names referred to herein are trademarks™ or registered® trademarks of their respective holders.

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SBG game portfolio includes a broad selection of popular omni-channel slots titles including the Centurion TM game family and

Super Hot Fruits TM (featuring the Sizzling Hot Spins TM game family).

Super Hot Fruits ® (featuring the Sizzling Hot Spins TM game family).

These games offer customers a wide range of

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We offer SBG terminals such as

the Flex4k curved screen, Eclipse TM , Valor TM , Optimus TM , Blaze TM and Sabre Hydra TM

the Flex4k curved screen, Vantage ®, Eclipse TM , Valor TM , Prismatic TM and Sabre Hydra TM ,

each offering a different size terminal, graphics, technology and price proposition.

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During 2022, we sold

3,372 machines despite many of our customers having operations which were closed for approximately one quarter of 2021.

With our participation-driven business model, approximately 94% of service revenue for our Gaming segment was recurring in nature

in 2021 (excluding $3.1 million of VAT-related revenue) and derived under long-term contracts.

We have successfully renewed all of our

key Gaming contracts expiring over the last three years.

2,927 units, 53% of these in the UK and 47% internationally.

With our participation-driven business model, approximately 96% of service

revenue for our Gaming segment was recurring in nature in 2022 (excluding $2.0 million of performance bonus revenue and $1.0 million

of VAT-related revenue) and derived under long-term contracts.

We have successfully renewed contracts with our three largest customers

in the UK LBO market.

the year ended December 31, 2022, our Gaming segment generated revenue and Adjusted EBITDA of $111.7 million and $41.6 million, respectively

(excluding VAT related income), as compared to the year ended December 31, 2020, during which we generated $110.5 million and

$57.9 million in revenue and Adjusted EBITDA, respectively (excluding VAT related income).

We believe the COVID-19 global pandemic

impacted this segment during the year ended December 31, 2021 (as well as the prior year) due primarily to government-imposed lockdowns

that forced our land-based customers to close during certain periods.

(excluding VAT related income), as compared to the year ended December 31, 2021, during which we generated $81.4 million and $26.1 million

in revenue and Adjusted EBITDA, respectively (excluding VAT related income).

Sports Segment

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or basketball.

Players can bet on the simulated sporting event, in both a streaming and on-demand environment, overcoming the relative

infrequency of live sporting events.

We have developed this product using an award-winning TV and film graphics team with advanced motion

capture techniques.

Players can bet on the simulated sporting event, overcoming the relative infrequency of live sporting events.

developed this product using an award-winning TV and film graphics team with advanced motion capture techniques.

believe we are one of the most innovative suppliers of Virtual Sports gaming products in the world.

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gaming jurisdictions worldwide, including the UK, Italy, Greece, Turkey, Morocco, and the U.S.

Virtual Sports game portfolio includes titles such as V-Play Soccer, V-Play Football, V-Play Basketball, V-Play Baseball, Virtual Grand

National and V-Play NFLA, as well as greyhounds, other horse racing products, tennis, motor racing, cycling, cricket, speedway, golf

We have also licensed the use of images of certain sports brands in our games, including with the NFL Alumni.

We also entered

into a partnership with the UK Jockey Club to create the Virtual Grand National, which has aired on live UK television since 2017.

2021 we entered into an exclusive licensing agreement with the Major League Baseball Players Alumni Association to create and license

a new V-Play HomeRun Shoot-out Legends virtual baseball product.

Virtual Sports game portfolio includes titles such as V-Play Soccer TM , V-Play Women’s Soccer TM , V-Play

Football TM , V-Play Basketball TM , V-Play Baseball TM , and V-Play NFLA TM , as well as

greyhounds, other horse racing products, tennis, motor racing, cycling, cricket, speedway, golf and darts.

We have also licensed the

use of images of certain sports brands in our games, including with the NFL Alumni.

In 2021, we entered into an exclusive licensing

agreement with the Major League Baseball Players Alumni Association to create and license a new V-Play Home Run Shoot-out Legends TM

virtual baseball product.

customers are many of the largest operators in lottery, gaming and betting worldwide.

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and online operators in the United Kingdom;

states of Nevada, Pennsylvania and New Jersey;

states of Nevada, Pennsylvania, D.C.

and New Jersey;

Gibraltar and other regulated

EU sectors, including Italy, Greece and Poland;

and other jurisdictions such as Turkey and Morocco.

Virtual Sports can be adapted to

function in sports betting, lottery, or gaming environments and is therefore available to a wide range of customers in both public and

private implementations.

Virtual Sports events are capable of being offered to millions of our customers’ customers, through retail, online and mobile

platforms, many of them available 24 hours per day, 7 days per week, and often concurrently within the same location or interactive platform.

We have multiple hosting solutions capable of fulfilling the product delivery needs of our customers including our proprietary Virtual

Plug and Play end to end online and mobile turnkey solutions.

In addition, a cloud-based solution is available to customers who require

an XML sportsbook integration that is fully hosted and operated by Inspired.

and other jurisdictions such as Ontario, Turkey and Morocco.

Virtual Sports can be adapted

to function in sports betting, lottery, or gaming environments and is therefore available to a wide range of customers in both public

and private implementations.

Virtual Sports events are capable of being offered to millions of customers, through retail, online and mobile platforms, many of them

available 24 hours per day, 7 days per week, and often concurrently within the same location or interactive platform.

We have multiple

hosting solutions capable of fulfilling the product delivery needs of our customers including our proprietary Virtual Plug and Play end

to end online and mobile turnkey solutions.

In addition, a cloud-based solution is available to customers who require an XML sportsbook

integration that is fully hosted and operated by Inspired.

Virtual Sports products are typically offered to operators on a participation basis, whereby we receive a portion of the gaming revenues

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99% of total revenue on a recurring basis under long-term contracts for which our standard term is three years in duration.

We have successfully

renewed all of our key Virtual Sports contracts expiring over the last three years.

the year ended December 31, 2021, our Virtual Sports segment generated revenue and Adjusted EBITDA of $36.0 million and $28.4

million, respectively, as compared to the year ended December 31 2020, during which we generated $32.4 million and $25.1 million

in revenue and Adjusted EBITDA, respectively.

We believe the COVID-19 global pandemic impacted retail revenue for this segment during

the year ended December 31, 2021 (as well as the prior year) due primarily to government-imposed lockdowns which forced our retail customers

to close during certain periods.

We believe that the COVID-19 global pandemic accelerated the market adoption of Virtual Sports through

online channels, which enabled us to benefit from market trends in this business during a period in which our retail customers

were not operating due to government-imposed lockdowns.

Virtual Sports revenue generated through online and mobile channels has increased

from $20.2 million in 2020 to $26.1 million in 2021.

the year ended December 31, 2022, our Virtual Sports segment generated revenue and Adjusted EBITDA of $55.1 million and $46.3 million,

respectively, as compared to the year ended December 31 2021, during which we generated $36.0 million and $28.4 million in revenue and

Adjusted EBITDA, respectively.

Virtual Sports revenue generated through online and mobile channels has increased from $26.1 million in

2021 to $43.4 million in 2022.

Interactive business uses unique interactive-only content as well as offerings from our Gaming and Virtual Sports segments to create

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Our interactive content includes a wide range of premium random number generated casino content from feature-rich bonus games

to European-style casino free spins and table games incorporating well-known first and third-party brands including Space Invaders TM ,

20p Roulette TM , Jagr’s Super Slot TM , Super Hot Fruits TM and Reel King Megaways TM .

to European-style casino free spins and table games incorporating well-known first and third-party brands including Space Invaders ® ,

20p Roulette TM , Jagr’s Super Slot TM , Super Hot Fruits ® and Reel King Megaways TM .

releases several new titles per month and new games can be seamlessly deployed to the full estate of operators and aggregators through

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Games are available on over 300 websites across much of regulated Europe including the UK, Gibraltar,

Malta, Spain, Sweden, Italy, Germany, the Netherlands, Romania, Greece and Belgium as well as in New Jersey, Michigan and Quebec.

expect to next go live in West Virginia, Pennsylvania, Ontario, Alberta and Connecticut during 2022.

Malta, Spain, Sweden, Italy, Germany, the Netherlands, Romania, Greece and Belgium as well as in New Jersey, Michigan, Pennsylvania,

Connecticut, Ontario and Quebec.

We expect to next go live in West Virginia and Alberta during 2023.

Virgo RGS™ is integrated with a number of best known casino brands, including William Hill, Entain, bet365, Flutter, 888, Kindred,

Gamesys, BetFred, Rank, Leo Vegas, OPAP and Stoiximan.

We are also now live with ten North American operators:

We are also now live with thirteen North American operators:

Bet MGM, Draft Kings,

Caesars, Resorts/Mohegan, Rush Street Interactive, Wynn, Unibet, 888 and Golden Nugget and with Loto Quebec in Canada.

Our Interactive products are

typically offered to operators on a participation basis, whereby we receive a percentage of total amount of stakes wagered or a percentage

of net gaming revenue.

For the year ended December 31, 2021, our Interactive segment generated revenue and Adjusted EBITDA of $22.8

million and $13.0 million, respectively.

With our participation-driven business model, approximately 100% of revenue

for our Interactive segment is recurring in nature and derived under long-term contracts for which our standard term is three years in

Caesars, Resorts/Mohegan, Rush Street Interactive, Wynn, Unibet, Ballys, Tipico, Ocean, 888 and Golden Nugget and with Loto Quebec in

Interactive products are typically offered to operators on a participation basis, whereby we receive a percentage of total amount of

stakes wagered or a percentage of net gaming revenue.

For the year ended December 31, 2022, our Interactive segment generated revenue

and Adjusted EBITDA of $23.1 million and $12.3 million, respectively.

With our participation-driven business model, approximately 100%

of revenue for our Interactive segment is recurring in nature and derived under long-term contracts for which our standard term is three

years in duration.

We have successfully renewed all of our key Interactive contracts expiring over the last three years.

We believe the COVID-19

global pandemic accelerated the market adoption of interactive gaming by end-users, and that our EBITDA margins in this segment will

expand as our revenue grows due to the low variable costs we expect to incur on incremental revenue, versus our existing base of revenue.

We believe the

COVID-19 global pandemic accelerated the market adoption of interactive gaming by end-users, and that our EBITDA margins in this segment

will expand as our revenue grows due to the low variable costs we expect to incur on incremental revenue, versus our existing base of

are a supplier of gaming terminals and amusement machines to the Leisure and Hospitality sectors and one of the largest operators of

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titles from our strategic partners.

We also manufacture and sell analog machines.

addition, we also supply and operate approximately 9,500 amusement machines and 2,200 gaming terminals in family entertainment centers

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customers in this segment include the vast majority of recognizable brands that participate in the geographies and sectors in which we

These customers include large pub operators JD Wetherspoons, Stonegate Pub Company, Marstons PLC, Greene King, Mitchells and

Butler, Punch Taverns, Whitbread and Star Pubs and Bars (Heineken).

In the Bingo sector, we supply gaming terminals and services to Buzz

Bingo and Mecca.

We supply gaming terminals and services to transport hub operators, Moto and Welcome Break and major airports,

including Heathrow.

We also operate our own adult gaming centers under the Quicksilver brand in Extra Motorway Services.

We have joint

venture agreements with holiday park operators Parkdean Resorts and Bourne Leisure across their Haven, Butlins and Warner Hotels brands,

where we supply machines and trained staff to manage and operate family entertainment centers.

our Leisure segment had, as of December 31, 2021, an installed base of over 16,000 gaming terminals, which were operated primarily under

participation-based contracts.

We generate revenue by participating, typically as a function of gross revenue from each machine, in a

percentage of volumes generated by these machines.

Because we participate in our customers’ revenues under such contracts, we are

aligned with our customers in benefitting from the introduction of our new content, which can drive growth in the win per unit per day

of our installed base.

Additionally, we earn revenue through the sale of units, as well as a fixed daily fee for certain of our installed

With our participation-driven business model, approximately 96% of revenue for our Leisure segment is recurring in nature

and derived under long-term contracts.

Since the NTG Acquisition, we have successfully renewed all of our key Leisure contracts expiring

over the last three years.

the year ended December 31, 2021, our Leisure segment generated revenue and Adjusted EBITDA of $68.7 million and $15.7

million, respectively.

We believe the COVID-19 global pandemic impacted this segment during the year ended December 31, 2021 due

primarily to government-imposed lockdowns, which forced our land-based customers to close during certain periods.

Our Strengths

These customers include large pub operators JD Wetherspoons, Stonegate Pub Company, Greene King, Mitchells and Butler, Whitbread

Marstons and Admiral Taverns.

In the Bingo sector, we supply gaming terminals and services to Buzz Bingo and Mecca.

We supply gaming

terminals and services to transport hub operators, Moto and Welcome Break and major airports, including Heathrow.

We also operate our

own adult gaming centers under the Quicksilver TM brand in Extra Motorway Services.

We have joint venture agreements with holiday

park operators including Parkdean Resorts, Bourne Leisure and Butlins, where we supply machines and trained staff to manage and operate

family entertainment centers.

our Leisure segment had, as of December 31, 2022, an installed base of over 16,000 gaming terminals, which were operated primarily

under participation-based contracts.

We generate revenue by participating, typically as a function of gross revenue from each

machine, in a percentage of volumes generated by these machines.

Because we participate in our customers’ revenues under such

contracts, we are aligned with our customers in benefitting from the introduction of our new content, which can drive growth in the

win per unit per day of our installed base.

Additionally, we earn revenue through the sale of units, as well as a fixed daily fee

for certain of our installed units.

With our participation-driven business model, approximately 96% of revenue for our Leisure

segment is recurring in nature and derived under long-term contracts.

Notably, we have successfully renewed contracts with pub

operators Greene King, Marstons PLC, Mitchells & Butlers, Admiral Taverns, Stonegate and Whitbread.

We have also secured new

contracts with Bourne Leisure and Butlins.

the year ended December 31, 2022, our Leisure segment generated revenue and Adjusted EBITDA of $95.5 million and $24.4 million, respectively.

believe key factors that give us an advantage in the gaming technology space include:

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In our Leisure

segment, we supply and operate an installed base of approximately 16,000 gaming terminals (including approximately 2,200 gaming

terminals under maintenance only contracts) and 7,000 pool tables, prize vending and jukeboxes to pubs, bingo halls and adult gaming

In addition, we also supply and operate approximately 9,300 amusement machines and 2,200 gaming terminals in family entertainment

centers located in holiday parks, bowling centers and other entertainment venues.

We have award winning content and products in our Virtual

Sports segment, which offers a wide range of sports and numbers games through approximately 32,000 retail venues as well as through various

segment, we supply and operate an installed base of approximately 16,000 gaming terminals (including approximately 2,200 gaming terminals

under maintenance only contracts) and 7,000 pool tables, prize vending and jukeboxes to pubs, bingo halls and adult gaming centers.

addition, we also supply and operate approximately 9,300 amusement machines and 2,200 gaming terminals in family entertainment centers

located in holiday parks, bowling centers and other entertainment venues.

We have award winning content and products in our Virtual Sports

segment, which offers a wide range of sports and numbers games through approximately 32,000 retail venues as well as through various

online channels.

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to be resilient under various economic environments.

While our Gaming segment has represented the largest proportion of our revenue

in each of the last three years, our Virtual Sports and Interactive segments represent substantial growth opportunities as demonstrated

While our Gaming segment has represented the largest proportion of our revenue in

each of the last three years, our Virtual Sports and Interactive segments represent substantial growth opportunities as demonstrated

by recent trends, including during the COVID-19 global pandemic, which are expected to continue to diversify our business.

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Many of our customer relationships in the UK and European sectors are long-standing and in excess

We expect that

our diverse customer base will afford us opportunities to sell incremental products to certain of these customers in the future.

We expect that our diverse customer base will afford us opportunities to sell incremental products to certain of these customers

in the future.

Recurring Revenue Supported by Long-Term Participation-Based Contracts

believe our robust recurring revenue business model will drive our performance and free cash flow generation.

For the year ended December

31, 2021, our recurring revenue, which included revenue generated from participation-based contracts and licensing arrangements, represented

86% of total revenue (87% excluding VAT-related revenue), as compared to approximately 67% of total revenue (84% excluding VAT-related

revenue) for the year ended December 31, 2020.

Our content and products, which are provided primarily pursuant to long-term contracts,

are essential to generating revenue for our customers and satisfying the demand of our end users.

Our long-term contracts typically have

an initial duration of three to five years depending on the business segment and the customer and, over the last three years, we have

successfully renewed all expiring contracts with key customers in our Gaming, Virtual Sports and Interactive segments, and have successfully

renewed all expiring contracts with key customers in our Leisure segment since the NTG Acquisition.

For the year ended

December 31, 2022, our recurring revenue, which included revenue generated from participation-based contracts and licensing

arrangements, represented 86% of total revenue (87% excluding VAT-related revenue and $2.0 million of performance bonus), as compared to approximately 86% of total

revenue (87% excluding VAT-related revenue) for the year ended December 31, 2021.

Our content and products, which are provided

primarily pursuant to long-term contracts, are essential to generating revenue for our customers and satisfying the demand of our

Our long-term contracts typically have an initial duration of three to five years depending on the business segment and

the customer and, over the last three years, we have successfully renewed the significant majority of expiring contracts with key customers in our Gaming,

Virtual Sports and Interactive segments, and have successfully renewed all expiring contracts with key customers in our Leisure

segment since the Company’s acquisition of the Gaming Technology Group of Novomatic UK Ltd., a division of Novomatic Group, an

international supplier of gaming equipment and solutions in October 2019 (the “NTG Acquisition”).

Technology and Track-Record of Strong Content Development

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We believe this growth has been driven, in part, by our content library of over

100 slot games, many of which have not been extensively distributed previously to interactive operators.

Many of our recent

game launches, including Maximus Gold Cash TM , Rainbow Cashpots TM , and Super Hot Fruits TM (a consistent

top performer in the Greek market), have been omni-channel, offering a premium player experience across multiple platforms.

100 slot games .

Many of our recent game launches, including Gold Cash Free Spins TM , Big Fishing Fortune TM , and

the Reel King ® family of games, have been omni-channel, offering a premium player experience across multiple platforms – though,

unlike our older games, they originated online and, once proved successful, were migrated to retail platforms.

award-winning Virtual Sports products offer a wide range of betting markets and what we consider to be superior graphics.

Sports revenue has been growing fast and has achieved high Adjusted EBITDA margins, while providing an attractive recurring-revenue base.

Additionally, this business has benefitted from recent trends, including during the COVID-19 global pandemic, toward online gaming.

To Benefit From Key Market Trends

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Other members of the Company’s Office of the Executive Chairman (the “OEC”) are our

President and Chief Operating Officer, Brooks H.

our Executive Vice President and Chief Strategy Officer, Daniel B.

President and Chief Executive Officer, Brooks H.

our Executive Vice President and Chief Financial Officer, Stewart F.B.

Baker, who is currently on a temporary medical leave of absence;

our Interim Principal Financial and Accounting Officer, Andrew C.

and our Executive Vice President and General Counsel, Carys

and our Executive Vice President and General Counsel, Carys Damon.

The OEC executes the day-to-day management of the Company.

Our management team has broad and deep experience in the gaming industry,

working with lotteries, casino operators, betting platforms, and online operators.

The members of the OEC have, on average, decades of

experience in the gaming industry, including relationships with customers around the world, helping them build and sustain revenue growth.

In addition, the members of the OEC have centered their careers on identifying, acquiring and integrating, through the implementation

of value creation initiatives, complementary businesses.

Our management

team has broad and deep experience in the gaming industry, working with lotteries, casino operators, betting platforms, and online operators.

The members of the OEC have, on average, decades of experience in the gaming industry, including relationships with customers around

the world, helping them build and sustain revenue growth.

In addition, the members of the OEC have centered their careers on identifying,

acquiring and integrating, through the implementation of value creation initiatives, complementary businesses.

seek to deliver innovative and differentiated products that provide value to our customers and exciting experiences to their players

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We have continued

to focus on channels where we believe there is considerable growth available – especially interactive.

We believe our technological

approach allows us to quickly adapt to changes in player preferences.

to focus on channels where we believe there is considerable growth available – especially in our digital businesses.

our technological approach allows us to quickly adapt to changes in player preferences.

to invest in content and technology in order to grow our existing customers’ revenues and penetrate new customers in our existing

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new customers by expanding into underpenetrated markets.

believe our historical growth has been driven by our entry into new geographies, and supplemented by increasing our share in

existing markets.

We expect to continue to focus on North American markets in the Gaming, Virtual Sports and Interactive segments

for such expansion.

We believe North America is a major gaming market in which we currently have limited participation, but where

our products are well positioned, or can be positioned, for future success.

For example, in 2020 and 2021, we placed 313 and 374

VLT terminals, respectively, in North America.

We also believe there are likely to be growth opportunities in Latin America which

will be available to us in the future.

believe our historical growth has been driven by our entry into new geographies, and supplemented by increasing our share in existing

We expect to continue to focus on North American markets in the Gaming, Virtual Sports and Interactive segments for such expansion.

We believe North America is a major gaming market in which we currently have limited participation, but where our products are well positioned,

or can be positioned, for future success.

For example, in 2021 and 2022, we placed 399 and 1,006 VLT terminals, respectively, in North

We also believe there are likely to be growth opportunities in Latin America which will be available to us in the future.

targeted mergers and acquisitions to expand our product portfolio and distribution footprint.

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for value-adding acquisitions and negotiate and close on beneficial acquisition transactions.

For example, in October 2019, we completed

the NTG Acquisition which we believe added increased scale to our business while supplementing key technologies and content within our

In December 2021 we completed the acquisition of Sportech Lotteries, LLC (currently Inspired Entertainment Lotteries LLC),

which is our first lottery-focused acquisition, further diversifying our business model on a product, customer, and geographic

ability to execute the strategy above will be affected by the ongoing COVID-19 global pandemic, which may have further, unexpected effects

on the business.

We are currently focused on managing our cash flow and liquidity, as well as the segments of our business that remain

operational to maximize near term revenues from those segments.

In December 2021, we completed the acquisition

of Sportech Lotteries, LLC (currently Inspired Entertainment Lotteries LLC), which is our first lottery-focused acquisition, further

diversifying our business model on a product, customer, and geographic level.

operate within the global gaming and lottery industry.

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over the last decade.

According to the H2 Database, the global gaming and

lottery industry has grown at a 10.5% compounded annual growth rate from 2010 to 2020, which has been driven by

increased consumer spend and the introduction of new regulated sectors but declined dramatically in 2020 due to land-based venues

being closed due to COVID-19 mandated shutdowns and restrictions.

According to the H2 Database, the global gaming and lottery industry has grown at a 2% compounded annual growth

rate from 2012 to 2022, which has been driven by increased consumer spend and the introduction of new regulated sectors but declined

dramatically in 2020 due to land-based venues being closed due to COVID-19 mandated shutdowns and restrictions.

this period, the digital online and mobile gaming and lottery sectors have grown at a faster pace than the industry as a whole.

to the H2 Database, these industry sectors have grown at a 12.6% compound annual growth rate from 2010 to 2020, driven

by rapid growth in the deployment of digital games and technologies, including many of our products, into land-based venues in the primary

sectors in which we operate, where regulators have supported the transition to digital, online and retail channels.

to the impact of the COVID-19 global pandemic, we believe the global gaming and lottery industry will return to a growth trajectory,

with more robust growth in the digital gaming and lottery sectors, as further described below.

We believe the industry is content

driven and, much like music, videogames and motion pictures, will continue to be transformed by the propagation of digitally-networked

technologies.

to the H2 Database, these industry sectors have grown at a 15% compounded annual growth rate from 2012 to 2022, driven by rapid growth

in the deployment of digital games and technologies, including many of our products, into land-based venues in the primary sectors in

which we operate, where regulators have supported the transition to digital, online and retail channels.

According to the H2 Database,

the total global gaming and lottery industry is projected to grow an average of 6% per year from 2022 to 2027 driven by the projected

growth in mobile and online gaming.

believe the global gaming and lottery industry will return to a growth trajectory, with more robust growth in the digital gaming and

lottery sectors, as further described below.

We believe the industry is content driven and, much like music, videogames and motion pictures,

will continue to be transformed by the propagation of digitally-networked technologies.

a gaming and lottery business-to-business supplier focused on digital products and technologies, we believe we are well-positioned to

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exhibited a 27.0% compound annual growth rate between 2010 and 2021.

Mobile gaming and lottery is now expanding

in other sectors, and mobile play has recently been approved in other sectors for gaming or lottery.

Mobile gaming and lottery is now expanding in other sectors, and

mobile play has recently been approved in other sectors for gaming or lottery.

addition to the foregoing, we believe there are significant benefits for our customers in adopting digitally networked gaming and lottery

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digital operations permit more games per terminal, enabling operators to test new games and new suppliers, seek to appeal to a broader

base of players with minimal cost or risk, commission games from third-party party suppliers on an open game interface and reduce procurement

base of players with minimal cost or risk, commission games from third-party suppliers on an open game interface and reduce procurement

Moreover, digital operations can significantly reduce the need for on-site repairs, improve terminal up-time and should extend

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machines to third parties who are licensed to operate such machines in bricks-and-mortar premises.

In addition, we operate

a number of Adult Entertainment Centers.

We also supply virtual racing software to local retail venues and to online operators who are

licensed to target the British sector.

We also supply our Interactive product to remote operators who are licensed to target the British

The provision of our products and services in relation to the British sector is authorized by a series of licenses issued by

the UK Gambling Commission, namely remote and non-remote Gaming Machine Technical (Full) operating licenses, a remote casino operating

license, a remote and non-remote gambling software license and a remote general betting standard (virtual events) license gaming machine

general adult gaming center license and a gaming machine general family entertainment center license.

In addition, we operate a number of

Adult Entertainment Centers.

We also supply virtual racing software to local retail venues and to online operators who are licensed to

target the British sector.

We also supply our Interactive product to remote operators who are licensed to target the British sector.

The provision of our products and services in relation to the British sector is authorized by a series of licenses issued by the UK Gambling

Commission, namely remote and non-remote Gaming Machine Technical (Full) operating licenses, a remote casino operating license, a remote

and non-remote gambling software license and a remote general betting standard (virtual events) license gaming machine general adult

gaming center license and a gaming machine general family entertainment center license.

Betting and Gaming Laws and Regulations.

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by the Gambling Commission.

The holder of a British gambling

operating license is subject to a variety of ongoing regulatory requirements, including, but not limited to, the following:

An entity holding a gambling license must notify the Gambling Commission of the identity of any shareholder holding 3%

or more of the equity or voting rights in the entity (whether held or controlled either directly or indirectly).

of corporate control:

Whenever a new person becomes a “controller” (as defined in section 422 of the Financial Services

and Markets Act 2000) of a company limited by shares that holds a gambling operating license, the licensed entity must apply to the

Gambling Commission for permission to continue to rely on its operating license in light of the new controller.

A new controller

includes any person who holds or controls (directly or indirectly, including ultimate beneficial owners who hold their interest through

a chain of ownership) 10% or more of the equity or voting rights in the licensed entity (or who is otherwise able to exercise “significant

influence” over it).

The Gambling Commission must be supplied with specified information regarding the new controller (which,

in the case of an individual, includes detailed personal disclosure) and this information will be reviewed by the Gambling Commission

to assess the suitability of the new controller to be associated with a licensed entity.

If the Gambling Commission concludes that

it would not have issued the operating license to the licensed entity had the new controller been a controller when the application

for the operating license was made, the Gambling Commission is required to revoke the operating license.

It is possible to apply

for approval in advance from the Gambling Commission prior to becoming a new controller of a licensed entity.

with the License Conditions and Codes of Practice (LCCP):

The LCCP is a suite of license conditions and code provisions which attach

to operating licenses issued by the Gambling Commission.

The provision of gambling facilities in breach of a license condition is

an offense under the GA05.

Certain specified “Social Responsibility” code provisions are accorded the same weight as

license conditions in this regard (whereas breach of an “ordinary” code provision is not an offense in itself, but may

be evidence of unsuitability to continue to hold a gambling license).

The LCCP imposes numerous operational requirements on licensees,

including compliance with the Gambling Commission’s Remote Gambling and Software Technical Standards, segregation of customer

funds, the implementation of a variety of social responsibility tools (such as self-exclusion), anti-money laundering measures, age

verification of customers and a host of consumer protection measures.

holder of a British gambling operating license is subject to a variety of ongoing regulatory requirements, including, but not limited

to, the following:

Shareholder disclosure:

An entity holding a gambling license must notify the Gambling Commission of the identity of any shareholder holding 3% or more of

the equity or voting rights in the entity (whether held or controlled either directly or indirectly).

Change of corporate control:

Whenever a new person becomes a “controller” (as defined in section 422 of the Financial Services and Markets Act 2000)

of a company limited by shares that holds a gambling operating license, the licensed entity must apply to the Gambling Commission

for permission to continue to rely on its operating license in light of the new controller.

A new controller includes any person

who holds or controls (directly or indirectly, including ultimate beneficial owners who hold their interest through a chain of ownership)

10% or more of the equity or voting rights in the licensed entity (or who is otherwise able to exercise “significant influence”

The Gambling Commission must be supplied with specified information regarding the new controller (which, in the case of

an individual, includes detailed personal disclosure) and this information will be reviewed by the Gambling Commission to assess

the suitability of the new controller to be associated with a licensed entity.

If the Gambling Commission concludes that it would

not have issued the operating license to the licensed entity had the new controller been a controller when the application for the

operating license was made, the Gambling Commission is required to revoke the operating license.

It is possible to apply for approval

in advance from the Gambling Commission prior to becoming a new controller of a licensed entity.

Compliance with the License

Conditions and Codes of Practice (LCCP):

The LCCP is a suite of license conditions and code provisions which attach to operating

licenses issued by the Gambling Commission.

The provision of gambling facilities in breach of a license condition is an offense under

Certain specified “Social Responsibility” code provisions are accorded the same weight as license conditions

in this regard (whereas breach of an “ordinary” code provision is not an offense in itself, but may be evidence of unsuitability

to continue to hold a gambling license).

The LCCP imposes numerous operational requirements on licensees, including compliance with

the Gambling Commission’s Remote Gambling and Software Technical Standards, segregation of customer funds, the implementation

of a variety of social responsibility tools (such as self-exclusion), anti-money laundering measures, age verification of customers

and a host of consumer protection measures.

The Gambling Commission regularly reviews and revises the LCCP.

returns and reporting of key events:

The LCCP requires licensees to submit quarterly returns to the Gambling Commission detailing

prescribed operational data.

Licensees are also required to notify the Gambling Commission as soon as practicable and in any event

within 5 working days of becoming aware of the occurrence of certain specified “key events” which, in summary, are events

which could have a significant impact on the nature or structure of the licensee’s business.

Licensees are also required to

notify suspicion of offenses and suspicious gambling activity.

Key management personnel are required to maintain personal licenses authorizing them to discharge certain responsibilities

on behalf of the operator.

Regulatory returns and

reporting of key events:

The LCCP requires licensees to submit quarterly returns to the Gambling Commission detailing prescribed

operational data.

Licensees are also required to notify the Gambling Commission as soon as practicable and in any event within 5

working days of becoming aware of the occurrence of certain specified “key events” which, in summary, are events which

could have a significant impact on the nature or structure of the licensee’s business.

Licensees are also required to notify

suspicion of offenses and suspicious gambling activity.

Personal licenses:

management personnel are required to maintain personal licenses authorizing them to discharge certain responsibilities on behalf

of the operator.

These personal licenses are subject to renewal every five years.

Personal licenses are subject to compliance

with certain license conditions.

We operate two different gaming

businesses in Italy.

We provide platform and games for video lottery terminals (“VLTs”), we also supply Virtual Sports

products, including online platforms and games, to betting shops and online platforms.

Our businesses are operated through the Italian

branches of certain of our UK subsidiaries.

These branches hold police licenses and are enrolled in the Register of Gestori, as further

described below.

We supply our platform and games and Virtual Sports products only to operators licensed under Italian gaming laws and

Personal licenses are subject to compliance with

certain license conditions.

operate two different gaming businesses in Italy.

We provide platform and games for video lottery terminals (“VLTs”), we

also supply platforms for bets on Virtual Sports events to betting shops and online platforms.

Our businesses are operated through the

Italian branches of certain of our UK subsidiaries.

These branches hold police licenses and are enrolled in the ADM Register of Gestori,

as further described below.

We supply our platform and games and Virtual Sports products only to operators licensed under Italian gaming

laws and regulations.

VLT and Virtual Sports platforms must be connected over the internet to servers operated by the ADM.

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No gaming license is required in order to supply VLTs or Virtual Sports products to such operators.

platforms, machines and games, and Virtual Sports platforms and games, must be certified and approved by SOGEI, an entity authorized

to conduct such certifications, and approved by the Italian Ministry of Finance.

Such certifications and approvals must be obtained by

such operators, rather than the suppliers of such VLT platforms, machines and games, and Virtual Sports platforms and games.

platforms, machines and games, and Virtual Sports platforms and games, must be certified and approved by either SOGEI, an entity controlled

by the Italian Ministry of Finance and authorized to conduct such certifications or testing labs accredited with ADM.

Such certifications

and approvals must be obtained by such operators, rather than the suppliers of such VLT platforms, machines and games, and Virtual Sports

platforms and games.

of gaming machines, including VLTs, must hold a police license (as prescribed by article 86, paragraph 3, of the Italian United Text

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1, paragraph 82 of Law No.

220/2010 (known as the “Register of Gestori”).

If a supplier of gaming machines is not enrolled

in the Register of Gestori, any agreement it enters into regarding the supply of gaming machines is null and void.

In addition, if the

enrollment is not renewed, existing agreements regarding the supply of gaming machines become null and void.

Enrollment in the Register

of Gestori is subject to, among other things, a review of the suitability of the applicant business entity and its directors.

event of a change of control of the entity enrolled in the Register of Gestori (but not of such entity’s direct or indirect parent

entities), the details of such change must be notified to the ADM and suitability must be reconfirmed.

220/2010 and managed by ADM (known as the “ADM Register of Gestori”).

If a supplier of gaming

machines is not enrolled in the ADM Register of Gestori, any agreement it enters into regarding the supply of gaming machines is null

In addition, if the enrollment is not renewed, existing agreements regarding the supply of gaming machines become null and

Enrollment in the ADM Register of Gestori is subject to, among other things, a review of the suitability of the applicant business

entity and its directors.

In the event of a change of control of the entity enrolled in the ADM Register of Gestori (but not of such

entity’s direct or indirect parent entities), the details of such change must be notified to the ADM and suitability must be reconfirmed.

of Virtual Sports products are not required to hold a police license, be enrolled in the Register of Gestori or otherwise be licensed

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2 of Law 4002/2011, as well as according to HGC’s

Decisions No 225/2/25.10.2016, 79314/05.08.2020 and 79305/05.08.2020, all suppliers of gaming machines in Greece must be certified by

the HGC in order to legally supply, sell, lease, offer or distribute any VLT or virtual game or any other game of chance (i.e.

including wagers or bets and the result of which games depends, even partly, on the influence of luck).

Moreover, a Suitability Licence

is required for suppliers, who are further are divided into a) Manufacturers (Art.

11 of the HGC’s Decision No 79314/05.08.2020)

and b) Importers/Distributors (Art.

12 of the HGC’s Decision No 79314/05.08.2020).

Accordingly, manufacturers need to obtain a

Suitability Licence Type B, while importers/distributors need to obtain a Suitability Licence Type E2.

As regards online gaming, Articles 45 -52 of Law 4002/2011, which was recently amended by Law 4639/2019 (Government Gazette A/167/30.10.2019),

introduces several new provisions such as the two exclusive types of online licenses for online gaming operators:

a) Online Betting Licence;

and b) a license for Other Online Games (it covers online casino games and online poker games and variants thereof).

Furthermore, Article

14 of the HGC’s Decision No 79835/05.08.2020 states that all suppliers have to submit an application to the HGC, accompanied by

the required compliance certificates, for the following elements:

the Gaming Platform (Betting Platform);

the Random Number Generator

(RNG) per type/group of Games that the Manufacturer offer to each Licence Holder;

Decision No 225/2/25.10.2016 as well as Ministerial Decision 79314/23.07.2020 (GG B’ 3263/5 August 2020) as amended with Decision

13530 /02.02.2022 (GG B’ 356 03.02.2022) and again with Decision 187634/27.12.2022 (GG B’ 6716/2712.2022) and 79305/05.08.2020

(GG B’ 3262/5 August 2020), all suppliers of gaming machines in Greece must be certified by the HGC in order to legally supply,

sell, lease, offer or distribute any VLT or virtual game or any other game of chance (i.e.

games including wagers or bets and the result

of which games depends, even partly, on the influence of luck).

Moreover, for Manufacturers which are defined under the aforesaid Decision

79305 as “the person or entity which manufactures (indicatively, studies, designs, assembles, produces, programs) and in any way makes

available to an Operator and/or Importer any Technical Means and Hardware, and has received a Suitability License by the HGC to this

end, as well as the person that holds a license for a Studio”, Decision 79305, provides in Article 9 for a Suitability License provided

a Manufacturers (type A.1 licence) and in Article 10 to Importers/Distributors (type E1 and E2)Accordingly, manufacturers need to obtain

a Suitability License Type A1, while importers/distributors need to obtain a Suitability License Type E1 or E2.

As regards online gaming, Articles 45 -52 of Law 4002/2011 (GG A’ 180/22.8.2011), which was recently amended by Law 4635/2019 (GG

A’ 167/30.10.2019), introduces several new provisions such as the two exclusive types of online licenses for online gaming operators:

a) Online Betting License;

and b) a license for Other Online Games (it covers online casino games and online poker games and variants

Furthermore, Article 14 of the HGC’s Decision No 79835/05.08.2020 (GG B’ 3265/5.8.2020) states that all Manufacturers

have to submit an application to the HGC, accompanied by the required compliance certificates, for the following elements:

Platform (Betting Platform);

the Random Number Generator (RNG) per type/group of Games that the Manufacturer offer to each License

each individual game or multigame.

Suitability Licences for suppliers are also divided into two types:

a) Manufacturers Suitability Licence and b) Importers/Distributors

Suitability Licence (according to articles 9 and 10 of the HGC’s Decision No 79305/05.08.2020).

Accordingly, manufacturers need

to obtain a Suitability Licence Type A1 or A2 (depending on whether the manufacturer provides management services to the operator or

not), while importers/distributors need to obtain a Suitability Licence Type E1.

Lastly, Suitability Licenses for suppliers are also divided into two types:

a) Manufacturers

Suitability License and b) Importers/Distributors Suitability License (according to articles 9 and 10 of Decision No 79305/05.08.2020).

Accordingly, manufacturers need to obtain a Suitability License Type A1 or A2 (depending on whether the manufacturer provides management

services to the operator or not), while importers/distributors need to obtain a Suitability License Type E1 or E2.

Regulation and Changes in Ownership

6 unchanged sentences

of our gaming licenses and certifications.

continually invest in new product development in each of our Virtual Sports, Interactive, Leisure and Gaming business segments.

has a full stack game development structure, combining its proprietary technology frameworks together with some of the industry’s

best math, art, creative and production personnel spread across 3 game studios (Inspired, Astra and Bell Fruit).

We release over 100

games each year onto our own priority gaming system, Interactive RGS and to our G2S clients around the world in markets such as North

America, UK, Greece, Spain, Belgium, Italy, Sweden and more.

Whilst many of our game launches are omni-channel, we have a focus on building

the right game for the right market and take pride in tweaking and modifying the math and themes for the target player.

In Virtual Sports

we combine graphical assets and software that controls those assets to schedule events and generate results via a random number generator,

as well as supplying on demand versions of our content.

In 2020, we launched the Virtual Plug and Play (VPP) product range.

our award winning Virtuals assets, with our Interactive RGS and the addition of a Virtuals Bet Management System, VPP gives our operators

a Virtuals Sportsbook in a box, with ease of integrations and operation.

We account for our development costs as software development

costs and these are typically amortized over a two-year period.

continually invest in new product development in each of our Gaming, Virtual Sports, Interactive and Leisure business

Inspired has a full stack game development structure, combining its proprietary technology frameworks together with some

of the industry’s best math, art, creative and production personnel spread across 3 game studios (Inspired, Astra and Bell

We release over 100 games each year onto our own priority gaming system, Interactive RGS and to our G2S clients around the

world in markets such as North America, UK, Greece, Spain, Belgium, Italy, Sweden and more.

Whilst many of our game launches are

omni-channel, we have a focus on building the right game for the right market and take pride in tweaking and modifying the math and

themes for the target player.

In Virtual Sports we combine graphical assets and software that controls those assets to schedule

events and generate results via a random number generator, as well as supplying on demand versions of our content.

launched the Virtual Plug and Play (VPP) product range.

Using our award winning Virtuals assets, with our Interactive RGS and the

addition of a Virtuals Bet Management System, VPP gives our operators a Virtuals Sportsbook in a box, with ease of integrations and

We account for our development costs as software development costs and these are typically amortized over a two-year

principal supply arrangements concern the supply of our terminal components, content provision and outsourced labor.

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Since the NTG Acquisition, within the Leisure segment we have successfully renewed or extended

all major contracts that have expired.

the significant majority of major contracts that have expired.

and Employees

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of December 31, 2022, we had approximately 1,600 employees, approximately 1,500 of which were full-time.

Of those employees,

over 600 were dedicated to delivering our digital gaming platforms, content and manufacturing.

Approximately 85 of our employees

were assigned to the ongoing operation of our network, through which we supply and maintain our products.

Approximately 600 of

our employees were involved in UK field operations.

Our management, sales and administration teams accounted for approximately 200

Of those employees, over 600

were dedicated to delivering our digital gaming platforms, content and manufacturing.

Approximately 85 of our employees were assigned

to the ongoing operation of our network, through which we supply and maintain our products.

Approximately 600 of our employees were involved

in UK field operations.

Our management, sales and administration teams accounted for approximately 200 employees.

intellectual property consists principally of the propriety software we develop to operate our network and in the design and distribution

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be renewed for up to 20 years.

design patents expires 15 years from the date of grant, and the term of utility patents generally

design patents expire 15 years from the date of grant, and the term of utility patents generally

expires 20 years from the date of filing of the first non-provisional patent application in a family of patents.

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some of our products and this may mean we must contract with those competitors rather than directly with the customer to provide our

Our principal competitors include, among others, certain businesses that have vertically integrated gaming machine and

retail betting operations and businesses that operate in both regulated and unregulated sectors and thereby effectively subsidize their

regulated operations with unregulated operations.

Our principal competitors include, among others, certain businesses that have vertically integrated gaming machine and retail

betting operations and businesses that operate in both regulated and unregulated sectors and thereby effectively subsidize their regulated

operations with unregulated operations.

maintain a website at www.inseinc.com.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business