Bragg Gaming : Fourth Quarter 2023 MD&A

Bragg Gaming Group Inc.

MANAGEMENT DISCUSSION & ANALYSIS FOR THE THREE AND TWELVE-MONTH PERIODS

ENDED DECEMBER 31, 2023

TABLE OF CONTENTS

MANAGEMENT DISCUSSION & ANALYSIS FOR THE THREE- AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2023 1. MANAGEMENT DISCUSSION & ANALYSIS 2. CAUTION REGARDING FORWARD-LOOKING STATEMENTS 3. LIMITATIONS OF KEY METRICS AND OTHER DATA 4. OVERVIEW OF FINANCIAL YEAR 2023 5. FINANCIAL RESULTS 5.1 Basis of financial discussion 5.2 Selected annual information 5.3 Other financial information 5.4 Selected financial information 5.5 Summary of quarterly results 5.6 Liquidity and capital resources 5.7 Cash flow summary 6. TRANSACTIONS BETWEEN RELATED PARTIES 7. DISCLOSURE OF OUTSTANDING SHARE DATA 8. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS 9. CHANGES IN ACCOUNTING POLICY 10 MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING 11. GOING CONCERN STATEMENT 12. RISK FACTORS AND UNCERTAINTIES 13. ADDITIONAL INFORMATION

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MANAGEMENT DISCUSSION & ANALYSIS

This Management Discussion and Analysis ("MD&A") provides a review of the results of operations, financial condition and cash flows for Bragg Gaming Group Inc on a consolidated basis, for the three months ("Q4 2023") and year ended December 31, 2023. References to "Bragg", the "Group" or the "Company" in this MD&A refer to Bragg Gaming Group Inc and its subsidiaries, unless the context requires otherwise. This document should be read in conjunction with the information presented in the audited consolidated financial statements for the year ended December 31, 2023 (the "2023 financial statements").

For reporting purposes, the Company prepared the 2023 Financial Statements in European Euros ("EUR") and, unless otherwise indicated, in conformity with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). The financial information contained in this MD&A was derived from the 2023 financial statements. Unless otherwise indicated, all references to a specific "note" refer to the notes to the 2023 financial statements.

This MD&A references non-IFRS financial measures, including those under the headings "Selected Financial Information" and "Key Metrics" below. The Company believes these non-IFRS financial measures will provide investors with useful supplemental information about the financial performance of its business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating its business and making decisions. Although management believes these financial measures are important in evaluating the Company, they are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. Non-IFRS measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. These measures may be different from non-IFRS financial measures used by other companies, limiting their usefulness for comparison purposes. These non-IFRS measures and metrics are used to provide investors with supplemental measures of our operating performance and liquidity and thus highlight trends in our business that may nor otherwise be apparent when relying solely on IFRS measures.

For purposes of this MD&A, the term "gaming license" refers collectively to all the different licenses, consents, permits, authorizations, and other regulatory approvals that are necessary to be obtained in order for the Company to lawfully conduct (or be associated with) gaming in a particular jurisdiction.

Unless otherwise stated, in preparing this MD&A the Company has considered information available to it up to March 26, 2024, the date the Company's board of directors (the "Board") approved this MD&A.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This MD&A may contain forward-looking information and statements (collectively, "forward-looking statements") within the meaning of the Canadian securities legislation and applicable securities laws, including financial and operational expectations and projections. These statements, other than statements of historical fact, are based on management's current expectations and are subject to a number of risks, uncertainties, and assumptions, including market and economic conditions, business prospects or opportunities, future plans and strategies, projections, technological developments, anticipated events and trends and regulatory changes that affect the Company, its subsidiaries and their respective customers and industries. Although the Company and management believe the expectations reflected in such forward-looking statements are appropriate and are based on reasonable assumptions and estimates as of the date hereof, there can be no assurance that these assumptions or estimates are accurate or that any of these expectations will prove accurate. Forward-looking statements are inherently subject to significant business, regulatory, economic and competitive risks, uncertainties and contingencies that could cause actual events to differ materially from those expressed or implied in such statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "would", "should", "believe", "objective", "ongoing", "imply" or the negative of these words or other variations or synonyms of these words or comparable terminology and similar expressions.

By their nature forward-looking statements are subject to known and unknown risks, uncertainties, and other factors which may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among other things, the Company's stage of development, long-term capital requirements and future ability to fund operations, future developments in the Company's markets and the markets in which it expects to compete, risks associated with its strategic alliances, the impact of entering new markets on the Company's operations, and risks associated with new or proposed gaming regulations. Each factor should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. See the section, "Risk Factors and Uncertainties", below noting that these factors are not intended to represent a complete list of the factors that could affect the Company. Additional risks, uncertainties and other factors are discussed in the Company's annual information form dated March 26, 2024 (the "AIF"), a copy of which is available electronically on the Company's website, under the Company's SEDAR+ profile atwww.sedarplus.caand under the Company's EDGAR profile atwww.sec.gov.

Shareholders and investors should not place undue reliance on forward-looking statements as the plans, assumptions, intentions or expectations upon which they are based might not occur. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. Unless otherwise indicated by the Company, forward-looking statements in this MD&A describe the Company's expectations as of March 26, 2024, and, accordingly, are subject to change after such date. The Company does not undertake to update or revise any forward-looking statements, except in accordance with applicable securities laws.

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LIMITATIONS OF KEY METRICS AND OTHER DATA

The Company's key metrics are calculated using internal Company data. While these numbers are based on what the Company believes to be reasonable judgments and estimates of customer numbers for the applicable period of measurement, there are certain challenges and limitations in measuring the usage of its product offerings across its customer base. In addition, the Company's key metrics and related estimates may differ from estimates published by third parties or from similarly titled metrics of its competitors due to differences in methodology and access to information.

For important information on the Company's non-IFRS measures, see the information presented in "Key metrics" and "Selected financial information" below. The Company continually seeks to improve its estimates of its active customer base and the level of customer activity, and such estimates may change due to improvements or changes in the Company's methodology.

4. OVERVIEW OF FINANCIAL YEAR 2023

Bragg Gaming: Overview and Strategy

Bragg is a content-driven business-to-business ("B2B") iGaming technology provider. Its suite of iGaming content and technology, commercial relationships and operational licenses allows it to offer a complete gaming solution in regulated online gaming markets globally. Its premium content portfolio currently includes over 8,000 casino game titles, including proprietary games developed by its in-house studios, exclusive titles developed by third-party partners on its remote games server ("RGS") as well as aggregated, licensed games from top studios around the world.

The Company's proprietary suite of products includes a player account management ("PAM") platform, which provides the tools required to operate an online gaming business, including player engagement and data analysis software. The Company's technology was developed on a greenfield basis and is not dependent on legacy code. The Company's suite of products and services offers a one-stop solution to its customers that is adaptable to various gaming markets and legislative jurisdictions, including in European and North American iGaming markets.

The Company was incorporated by Articles of Incorporation pursuant to the provisions of the Canada Business Corporations Act on March 17, 2004, and on December 20, 2018, the Company completed a business combination transaction to acquire Oryx Gaming International LLC ("Oryx"), a full turnkey iGaming solutions provider with an established customer base in Europe and Latin America.

In June 2021, the Company acquired Wild Streak LLC, doing business as Wild Streak Gaming ("Wild Streak"), a leading iGaming content studio based in Las Vegas, Nevada with a portfolio of proprietary titles distributed globally, including in the United States and Europe.

In June 2022, the Company acquired Spin Games LLC ("Spin"), a Reno, Nevada-based iGaming technology supplier and content provider licensed and active in key regulated North American jurisdictions.

In September 2022, the Company consolidated its group of companies including Oryx, Wild Streak and Spin under the single brand name, Bragg Group.

The Company is dual-listed on the Nasdaq Global Select Market and the Toronto Stock Exchange, both under the symbol BRAG.

The Company aims to grow its business as a vertically integrated B2B provider to regulated online casinos, regulated online sports betting, and land-based casino offerings in global markets.

Driven by an experienced management team and offering its differentiated content portfolio, software-as-a-service ("SaaS") technology and managed services, the Company aims to become a leading vertically integrated content-led technology provider in the iGaming industry.

Financial performance in 2023

The Company is pleased to report on its trading performance for the year ended December 31, 2023. The year was characterized with vast operational activity with onboarding of new customers, triggering high demand for the Company's products and services and supporting its underlying growth. The Group has continued to deliver against its strategic objectives, achieving growth, while remaining committed to revenue diversification and geographic expansion.

Revenue

The Company's revenue1for the year ended December 31, 2023, increased from the same period in the previous year by 10.4.% to EUR 93.5 million (2022: EUR 84.7 million) continuing a yearly growth since FY2021. The Group's year-over-year revenue growth was mainly organic through its existing customer base, with onboarding of new customers in various jurisdictions and a solid revenue performance from its proprietary Wild Streak casino games studio and Spin's existing United States customer base.

The Company's revenue growth was mainly derived from the games and content segment which amounted to EUR 72.6 million (2022: EUR 60.8 million) and accounted for 77.7% (2022: 71.7% ) of the total revenues, as demand for the Group's unique games and content and technology proposition continues to grow. The Company's growth has been underpinned by continued investment and innovation in its technology and product offering. These investments enhanced the roll out of the iGaming (PAM) product in new markets throughout the year including Oryx Hub, new data analytic tools and customer engagement platform.

Management of the Company is pleased to see growth in game play and overall engagement level, maintaining solid unique player2numbers. Total wagering generated via games and content offered by the Company in the period ended December 31, 2023, were up by 26.6% from the same period in the previous year to EUR 22.4 billion (2022: EUR 17.7 billion). The number of unique players using our games and content in 2023 (excluding Wild Streak and Spin) increased by 36.4% to 8.9 million (2022: 6.5 million).

Gross profit increased compared to the same period in the previous year by 10.8% to EUR 49.9 million (2022: EUR 45.1 million) with gross margins increasing by 0.2% to 53.4% (2022: 53.2%). Gross profits improved year over year primarily due to improvement in revenue performance and the composition of revenue derived from our iGaming platform and managed services together with revenue from proprietary game studios which has no cost of sales compared to third party games and content which have associated third party costs.

Selling, general and administrative expenses increased from the same period in the previous year by 8.7% to EUR 50.8 million (2022: EUR 46.8 million) amounting to 54.3% of total revenue (2022: 55.2%). The increase of costs is in line with the Company's investment in its growth strategy, as the Company continues to build and enhance its foundation as a scalable and innovative vertically integrated iGaming content and technology provider in the iGaming industry.

2023 Financial Year Highlights

Notable factors affecting the Company's performance in 2023 include the following:

(a) Salaries and subcontractors increased by 18.2% to EUR 22.9 million (2022: EUR 19.4 million) as the Company continued to invest in expanding its technology and product offering by scaling its software and games development teams, product managers, data and analytics professionals and executive team. This has enabled the Company to source new customers and maintain growth from its existing customer base, expand into new markets, and adapt to regulatory requirements. As a result of the increased level of investment in technology and products, total capitalized software development costs increased by EUR 2.0m to EUR 8.7 million.

A one-off payment in the amount of EUR 1.3m (2022: EUR 0.2m) relating to a termination of the employment agreement of key senior executives were also incurred in the period which also attributed to the increase in the costs.

• 1 Revenue includes group share in game and content, platform fees and management and turnkey solutions

• 2 Unique players are individuals who made a real money bet at least once during the period

• (b) Share based compensation decreased by 45.5% to EUR 2.1 million (2022: EUR 3.8 million) in connection with share-based incentive plan awards to new directors and management composed of deferred share units ("DSUs"), restricted share units ("RSUs") and share options. During the period, EUR 0.4m was incurred in relation to a one-off acceleration of RSUs relating to the termination of the employment agreement of a key senior executive. The decrease resulted from a combination of higher number of awards granted in the previous year, changes in the vesting profile of new awards resulting in a lower proportion of aggregate fair value being expensed in current periods and cancellation of options.

  Total employee costs (including share-based compensation charge) increased by 7.8% to EUR 24.9 million (2022: EUR 23.1 million) mainly due to an increased headcount in technology, product and senior management teams in the total value of EUR 3.5 million with offset in share-based payment costs of EUR 1.7 million.

• (c) Information technology and hosting costs increased by 27.6% to EUR 4.2 million (2022: EUR 3.3 million) mainly related to an increase in gaming activity and increased costs of hosting and servers in various jurisdictions as a result of the Company's revenue growth.

• (d) Professional fees decreased by EUR 0.3 million to EUR 3.1 million (2022: EUR 3.4 million) and are comprised of audit and tax advisory, legal, recruitment, regulatory and licensing costs which are related to various jurisdictions, including in the United States and other markets, as part of the expansion into new markets. The decrease in professional fees compared to the previous period is due to cost control and a one-time EUR 0.3 million payment made in 2022 in relation to the recruitment of the former Chief Executive Officer.

• (e) Corporate costs decreased by EUR 0.6 million to EUR 0.5 million (2022: EUR 1.1 million) as a result of a reduction in the level of investment in investor and public relations activities as part of the Company's general corporate strategy.

• (f) Sales and marketing decreased by EUR 0.4 million to EUR 2.0 million (2022: EUR 2.4 million) mainly related to the optimisation in the expenditure of sales and gaming sector events and games and content promotional activities.

• (g) Bad debt expense decreased by EUR 1.0 million to a recovery of EUR 0.4 million (2022: charge of EUR 0.6 million) as a result of progress being made in improving the billing processes and collection of customer funds and remeasuring the risk in the aging and liquidity of trade receivables of specific customers.

• (h) Transaction and acquisition costs : decreased by EUR 0.9 million to EUR nil (2022: EUR 0.9m) due to costs incurred related to the debt financing process and other M&A activities in the previous year.

• (i) Other operational costs amounted to EUR 2.5 million (2022: EUR 2.7 million) relating to an increased director and officer insurance premium as well as erosion and omission costs.

Total operating loss for the period amounted to EUR 0.8 million (2022: EUR 0.8 million).

The Company's Adjusted EBITDA increased from the same period in the previous year by 26.3% to EUR 15.2 million (2022: EUR 12.1 million) with Adjusted EBITDA margins increasing by 210 bps to 16.3% (2022: 14.2%). The change in margin is mainly as a result of scale and a change in the product mix, while maintaining higher investment in salaries and subcontractor costs as part of the Company's strategy to expand software development, product, and senior management functions. A reconciliation between the current and prior year's reported figures to Adjusted EBITDA is shown in Section 5.3.

Cash flow

Cash flows from operating activities for the year ended December 31, 2023, amounted to EUR 11.7 million (2022: EUR 5.8 million) with underlying performance of EUR 13.6 million (2022: EUR 10.7 million) offset by movement in working capital and income tax payment of EUR 1.9 million (2022: EUR 4.9 million).

Cash flows used in investing activities amounted to EUR 9.7 million (2022: EUR 16.9 million), a reduction of EUR 7.2 million from the same period in the previous year and is mainly attributable to the consideration paid relating to the acquisition of Spin Games LLC in the previous period amounting to EUR 9.0 million. During the year, the Company continued its investment in intangible assets, mainly in software development and game certification costs, totaling EUR 9.4 million (2022: EUR 7.4 million) and purchases of property and equipment of EUR 0.3 million (2022: EUR 0.5 million).

Cash flows from financing activities amounted to a net outflow of EUR 4.2 million (2022: inflow of EUR 7.0 million) mostly related to the outflows from the repayment of the Lind convertible security of EUR 3.7 million (2022: inflow from the financing arrangement from which the Company received a net investment of EUR 8.1 million), repayment of lease liability of EUR 0.6 million (2022: EUR 0.2 million) and repayment of loan and interest of EUR 0.3 million (2022: EUR 1.0 million). During the period, the Company also received EUR 0.4 million proceeds from the exercise of stock options (2022: EUR nil).

Financial performance in Q4 2023

Revenues

During the three months ended December 31, 2023, the Company has continued its focus on achieving its strategic objectives by accelerating growth while remaining committed to revenue diversification and geographic expansion.

The Company's revenue for the three months ended December 31, 2023, have seen a slight decline from the same period in the previous year by 1.4% to EUR 23.4 million (4Q22: EUR 23.7 million) . The Company's year-over-year revenue decline was mainly related to revised commercial terms agreed to with a key strategic partner that has been reflected in the quarter in managed services and aggregation products.

Total wagering generated via games and content offered by the Company in the three months ended December 31, 2023, were up by 18.1% from the same period in the previous year to EUR 6.1 billion (2022: EUR 5.1 billion). The number of unique players using the Company's games and content over the period (excluding Wild Streak and Spin) increased by 29.4% to 3.7 million (4Q22: 2.8 million).

Gross profit

Gross profit for the three months ended December 31, 2023 decreased from the same period in the previous year by 7.3% to EUR 12.0 million (4Q22: EUR 13.0 million) with gross margins decreasing by 330 bps to 51.5% (4Q22: 54.9%) due to a lower revenue derived from our iGaming platform and managed services coupled with the increase in content revenue which has a higher cost of sales compared to associated third-party costs.

Expenses

Selling, general and administrative expenses for the three months ended December 31, 2023 amounted to EUR 12.7 million, a decrease of EUR 0.4 million from the same period in the previous year (4Q22: EUR 13.2 million) and representing 54.8% of the total revenue (4Q22: 55.8%).

Profitability

Adjusted EBITDA amounted to EUR 2.8 million (4Q22: EUR 3.7 million) a decrease of EUR 0.9 million for the period with Adjusted EBITDA margins decreasing by 350 bps to 11.9% (4Q22: 15.4%). The main driver for the decrease was the revised commercial terms agreed to with a key strategic partner that have been reflected in the quarter in managed services and aggregation products while keeping tight control over the selling, general and administrative expenses.

Operating loss amounted to EUR 0.4 million (4Q22: operating profit of EUR 0.2 million) a decline in loss of EUR 0.6 million. This was mainly as a result of a reduction of gross profit of EUR 1.0 million offset by the decrease in selling, general and administrative expenses of EUR 0.4 million compared to the same period in the previous year.

Cash flow

Cash flow generated from operating activities for the three months ended December 31, 2023, amounted to EUR 5.5 million (4Q22: used EUR 2.0 million) with underlying performance amounting to EUR 3.5 million (2022: EUR 3.3 million). This was further improved by positive movement of net working capital amounting to EUR 2.5 million (4Q22: Negative EUR 5.0 million) offset by income taxes paid of EUR 0.5 million (4Q22: EUR 0.3 million).

Cash flow used in investing amounted to EUR 3.1 million (4Q22: EUR 2.5 million) and is mainly attributable to additions to intangible assets of EUR 3.0 million (4Q22: EUR 2.2 million).

Cash flow used in financing activities amounted to EUR 1.6 million (4Q22: EUR 0.4 million) mainly related to costs directly attributable to the repayment of convertible debt of EUR 1.4 million in the period (4Q22: Nil).

Financial position

Cash and cash equivalents as of December 31, 2023, amounted to EUR 8.8 million (December 31, 2022: EUR 11.3 million), a decrease of EUR 2.5 million, primarily as a result of cash used for investment activities totalling EUR 9.7 million mainly related to software development costs, cash used for financing activities totalling EUR 4.2 million mainly from repayment of convertible debt offset by a positive cash flow from operating activities of EUR 11.7 million.

Trade and other receivables as of December 31, 2023, totalled EUR 18.6 million (December 31, 2022: EUR 16.6 million), an increase of EUR 2.0 million mainly as a result of the timing of the cash collection of several customers which took place post year end.

Trade payables and other liabilities as of December 31, 2023, increased by EUR 2.3 million to EUR 21.8 million (December 31, 2022: EUR 19.5 million) as result of a EUR 2.3 million increase in trade payables and accrued liabilities.

Total convertible debt amounted to EUR 2.9 million (December 31, 2022: EUR 8.0 million) attributed to the convertible debt financing completed in September 2022. As of the date of this MD&A, 833,505 shares have been issued to Lind pursuant to the Lind Funding Agreement.

Other

• • Share Capital: As at December 31, 2023, the number of issued and outstanding shares was 23,003,552 (December 31, 2022: 21,107,968), the number of outstanding awards from equity incentive plans was 2,500,592 (December 31, 2022: 3,131,295), and the number of outstanding warrants was nil (December 31, 2022: 16,886) of broker warrants and warrants issued upon convertible debt of 979,048 (December 31, 2022: 979,048).

• • Employees: As at December 31, 2023, the Company employed 464 employees, contractors and sub-contractors (December 31, 2022: 428) across Europe, North America, India, and Israel.

Strategic Progress

The Company's vision is to be a profitable, must-have iGaming content and solution provider. It aims to achieve this as a producer and distributer of casino games, as a developer and licensor of iGaming technology, and as a provider of iGaming services.

The Company's content includes online and land-based games from its in-house Bragg Studios, exclusive online games from third-party content providers under its Powered by Bragg program, and non-exclusive third-party online games delivered via its content aggregation offering.

Technology products offered by the Company servicing the online casino and sports betting industry include its proprietary PAM platform, its Bragg Hub content delivery platform, its Fuze™ player engagement toolset and its data analysis and reporting platforms.

The Company also offers fully managed operational and marketing services to its PAM customers.

Taken together, the Company's content, technology and services offer a full turn-key solution, capturing an increased proportion of the online gaming value chain.

The Company plans to achieve its vision by focusing on its continued progress in the following key strategic areas: a) The rollout of Bragg's new content portfolio in the United States

Throughout the full year of 2023, the Company continued to roll out its latest portfolio of exclusive online casino games, delivered via its newest RGS technology, in the largest regulated iGaming jurisdictions in the United States.

In New Jersey, these launches included DraftKings Inc., Caesars Sportsbook & Casino and Resorts Digital Gaming in the first quarter of 2023, and BetMGM in the last quarter of the year.

The Company launched its latest content and RGS technology with Rush Street Interactive in the second quarter of 2023, and with FanDuel in Michigan and Connecticut during the third quarter.

In September 2023, the Company launched a custom online slot game, Lady Luck Casino Egyptian Magic, for its customer Caesars Sportsbook & Casino in New Jersey and Michigan, showcasing its ability to develop unique, customized and exclusive content to help its customers offer a differentiated online casino product.

b) Continued expansion in other markets

The Company has continued to develop its business in other markets throughout the full year of 2023, launching in four new iGaming markets, obtaining new supplier licenses, and launching content with new customers in multiple territories.

Three multi-brand, multi-territory agreements with tier 1 operators were signed during the year, with Betsson in the first quarter, and with 888 Holdings and with PokerStars in the third quarter. These global agreements covered the distribution of the Company's content in multiple territories, including the United Kingdom, Italy, Sweden, Denmark, Spain, Portugal and the Czech Republic.