Royal Wins is an Australian gaming & wagering technology company that was founded in November 2013. The Company designs, develops and operates wagering and betting real money pure skill games, to disrupt and dominate the online mobile gaming space targeting millennial markets. In just 2 years from launch, the Company’s flagship Kash Karnival product had received 1,800,000 subscribers and 589,354 active users for the last quarter. Revenues for the 2018 financial year were almost AU$1.7M. The minimum investment in the Royal Wins offer is AU$240.
Further information regarding the offer from Royal Wins is contained in the CSF Offer document.
I Letter from the Chairman
Thank you for considering to be part of the Royal Wins journey. Royal Wins are on the cusp of becoming the world’s first licensed real money pure skill gaming company.
The market prospects for Royal Wins are very exciting. The Company has already proven itself, in just 2 years from launch, the Company’s flagship Kash Karnival product had received 1,800,000 subscribers and 589,354 active users for the last quarter. Revenues for the 2018 financial year were almost $1.7M.
Gaming habits have changed drastically over the last decade with baby boomers aging and technology savvy millennials forming the primary segment of consumers. Participation in traditional games of chance such as slot and poker machines have steadily declined as a generation of players who have grown up on Angry Birds and Candy Crush look to games of skill over games of chance.
Royal Wins is now looking to further capitalize on the demographic shift and lengthen our head start by acquiring an iGaming license from the Canadian Kahnawake Gaming Commission in order to aggressively target users on Google PlayStore and Apple AppStore, and to globally scale its skill gaming product.
We look forward to welcoming you on board as owners of a company that is leading the evolution of the gaming industry.
Jean Claude Petter
I Business Description
Who are we?
Royal Wins is an Australian mobile gaming & wagering technology company that was founded in November 2013. Royal Wins’ leading game, Kash Karnival is the world’s first pure skill gaming app that allows players to bet and win in casual mobile games of skill rather than chance or odds-based casino games. The Company designs, develops and operates wagering and betting real money pure skill games, to disrupt and dominate the online mobile gaming space targeting millennial markets.
In order for Royal Wins to be able to operate a pure skill-based casino, the Company has developed algorithms to adjust the difficulty of pure skill-based games in response to human player input. The more skillful a player is at a game, the greater the difficulty of the games become, and vice versa. This technology enables the Company to run pure skill-based casino games by adjusting the Return-to-Player (RTP) and House Edge (HE) according to the skill of the player. The Company is currently applying and monetizing these algorithms to its existing operating wagering portal, Kash Karnival. Currently, Kash Karnival has 12 skill arcade games and 4 lotteries, with 1,800,000 subscribers and 589,354 active users for the last quarter (active quarterly users have played at least once in the past 3 months).
What is our business strategy?
Since being launched, the Company flagship Kash Karnival has been operating as a pure-skill platform rather than being based on random-number generation (RNG). In August of 2017, Kash Karnival was removed from the Google Playstore due to the requirement to have a gambling license similar to other RNG based gambling games. Shortly after this, the Company also voluntarily withdrew Kash Karnival from the Apple Playstore.
Since that time, the Company has been focused on getting its skill-based iGaming license, so it is able to launch Kash Karnival again via the Google Playstore and Apple Appstore. The Company has lodged its application to the Kahnawake Gaming Commission and anticipates obtaining the licence by the end of June 2019 after which we will be re-entering the Apple App Store and Android platforms.
The immediate opportunity for investors is to be positioned ahead of the granting of this license and to have exposure to one of the very few Company’s globally that not only have a skilled-gaming based license but also the IP necessary to fully exploit the market.
To summarise the above, Royal Wins’s immediate focus is to acquire an iGaming license so it can exploit its first-mover advantage to capture a large percentage of the mobile game pure-skill wagering market. Royal Wins will expand on what it has already proven works.
In the medium term, the Company will continue rolling out its B2C Kash Karnival product via the App Stores once it has been licensed in order to further enhance revenues and profitability. On the B2C side of the business, it is anticipated that the Company will reach a run rate revenue of A$2.3m by January 2020 and $5.2m by January 2021.
There are also medium-term B2B opportunities that the Company will begin to explore which involve the commercialization of the core IP that has been developed (not included in the revenue projections above). One such B2B opportunity is to partner with traditional land-based casinos to implement pure skill-based games on their premises. Royal Wins would be able to white label these games and skin them with its customers brand and logos.
The opportunity for land-based casinos to start moving towards skilled gaming is enormous. The ‘baby boomer’ a generation which has been content with non-skill based pure RNG gambling games will soon be replaced with the millennial generation which has grown up with pure-skill gaming. This transformation in the demographic will potentially impact the profitability of those existing casino operators that are not able to engage the millennial market.
Long-Term Vision & Mission Statement
Royal Wins’s long-term vision is to be the premier developer of pure-skill based mobile gaming wagering. All players of legal age should be able to play and win life-changing jackpots and prizes based solely upon their skill instead of only on chance and odds.
I Business Model
B2C Business Model
Royal Wins’s business model has been successfully executed across the world with a player base in a multitude of countries. When the Company was originally launched in the App store, the Company’s operations were underpinned by the following metrics.
 Cost per download: A$1.00
 Conversion rate of ordinary user to paying user: 4%
 CAC [Customer Acquisition Cost] per paying user: A$25.00 Calculation:  / 
 ARPU [Average Revenue Per User] per paying user: A$3.00
 CLV [Customer Lifetime Value]: 12 months x A$3 = A$36.00
 CLV minus CAC = A$11.00 Calculation:  – 
As Company the company achieves scale, Acquisition Costs per user will drop in tandem and strategies can be executed to improve ARPU and retention rates.
B2B Business Model
Although the Company has the intention to begin exploring a B2B business model in time (with a roll out to land-based casinos), the Company is currently focused on executing on its current proven B2C channel to market strategy. Consequently, this will remain the focus of the Company for the foreseeable future. The formulation of the appropriate B2B strategy will evolve over time.
I Organisational Structure
Some of the risks involved in investing in Royal Wins are outlined below:
Licensing Risk: There is the possibility that the Company is unable to attain its iGaming license from the Kahnawake Gaming Commission. If this is the case, the Company will have to look at getting its license in another jurisdiction such as Malta, or it may mean the Company will pivot into a B2B model – providing skill-based games to existing operators and publishers. There is no guarantee the Company will be able to receive another license in another jurisdiction, nor that it will be able to successfully pivot into a different business model.
Execution Risk: There is a risk that the Company may not be able to execute on delivering the number of users and paying users that it anticipates. Consequently, there is a risk that the Company will be unable to achieve its expected milestones in the anticipated timeframe. This may include user targets, revenue targets or the Company’s ability to list.
Competition Risk: To the best knowledge of the Company, existing competition or competing products in countries across the world are currently negligible. There are competitors such as Gamblit Gaming which have recently received US$25M (2017). Although the Company’s product and technology are best of breed, and although the Company has spent significant funds investing in its technology, there is the risk that others may attempt to enter the market, or existing and unknown competitors gain significant market share which inhibits the growth of Royal Wins in the future, or adversely impacts the Company’s competitive position.
Legislative change risk: There is the risk that legislation changes to make Royal Win’s activities illegal in the jurisdictions in which it operates.
Operating Risk: The performance of Royal Wins is dependent on being able to onboard customers at an attractive CAC. The failure of the company to do this may result in less than anticipated revenue growth.
Market Risk: Markets are subject to a host of factors, including economic conditions, government regulations, market sentiment, local and international political events and environmental and technological issues. Market risk may have different impacts on each investment and investment style.
Legal, Tax and Regulatory Risks: Legal, tax and regulatory changes may occur during the term of operations, which could have an adverse effect on Royal Wins. Royal Wins may have limited legal recourse in the event of a dispute, and remedies may have to be pursued in the courts.
Investment Values Rise and Fall: If Royal Wins is unable to demonstrate continued traction in its target markets, or if market conditions deteriorate, or if both of these conditions occur, the value of an investment in Royal Wins may be affected detrimentally. Neither Royal Wins nor any other entity guarantees any particular rate of return being earned by Royal Wins for investors.
CORPORATIONS REGULATIONS 2001 - RISK WARNING about Crowd-sourced funding
- Crowd-sourced funding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of ventures is speculative and carries high risks.
- You may lose your entire investment, and you should be in a position to bear this risk without undue hardship.
- Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares.
- Your investment is unlikely to be liquid. This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you.
- Even though you have remedies for misleading statements in the offer document or misconduct by the company, you may have difficulty recovering your money.
- There are rules for handling your money. However, if your money is handled inappropriately or the person operating the platform on which this offer is published becomes insolvent, you may have difficulty recovering your money.
- Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment.
FINANCIAL MARKETS CONDUCT REGULATIONS - WARNING STATEMENT ABOUT EQUITY CROWDFUNDING
- Equity crowd funding is risky.
- Issuers using this facility include new or rapidly growing ventures. Investment in these types of businesses is very speculative and carries high risks.
- You may lose your entire investment, and must be in a position to bear this risk without undue hardship.
- New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for Investors to make an informed decision.
- The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
- Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.