Is this Canadian gaming stock becoming an AI play?

Haywood Capital Markets analyst Gianluca Tucci reiterated a “Buy” rating and C$7.50 target price on Bragg Gaming Group (Bragg Gaming Group Stock Quote, Chart, News, Analysts, Financials TSX:BRAG) in a report dated Jan. 8, following the company’s announcement of a strategic restructuring.

Tucci said Bragg remains a compelling way to gain exposure to the regulated iGaming technology stack, with a now de-risked cost base and a clearer path to GAAP profitability. He described the restructuring as fiscally disciplined and strategically sound, even as it carries a meaningful human cost.

Bragg announced a 12% reduction in its global workforce, a move management expects will generate approximately €4.5-million in annualized cash savings. The company anticipates a one-time restructuring charge of roughly €1.0-million in the first quarter of fiscal 2026. Tucci views the decision to incur a modest near-term charge in exchange for recurring savings as a high-return action that should materially improve EBITDA margins entering the second half of fiscal 2026.

Tucci said the restructuring reflects a proactive effort to align Bragg’s cost structure with its longer-term AI-first strategy, which targets having AI-enhanced features embedded in 90% of new product launches by 2027. He added that the move should also help offset regulatory headwinds in the Netherlands, historically Bragg’s largest market, where higher gambling taxes have coincided with a sharp decline in licensed gross gaming revenue.

Tucci noted that the Netherlands’ gambling tax increase to 34.2% has resulted in weaker industry economics, with licensed operator GGR down roughly 25% year over year in the first half of 2025. Against that backdrop, he said Bragg’s decision to reallocate resources toward higher-growth regions is logical.

In contrast, Tucci highlighted the United States and Brazil as sources of baseline growth. Bragg now addresses more than 90% of the U.S. online casino total addressable market and is targeting up to 15% of 2025 revenue from the U.S. He also pointed to Brazil, where Bragg launched on the first day of market opening on Jan. 1, 2025, and is targeting up to 10% of 2025 revenue. Brazil’s iGaming market is estimated to reach US$3.3-billion by 2029.

Overall, Tucci said the streamlined operating model should allow Bragg to improve margins, invest more aggressively in AI-driven content and personalization, and remain agile in capturing share in Latin America and other growth markets. He said Haywood expects to revisit its financial outlook following the company’s fourth-quarter fiscal 2025 results.

Haywood forecasts Bragg will generate $106.6-million in revenue and $16.8-million in Adjusted EBITDA in fiscal 2025, improving to $110.2-million in revenue and $17.9-million in Adjusted EBITDA in fiscal 2026.

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