Losses widen at BetMakers in H1 despite revenue growth
Revenue for the six months to 31 December 2021 amounted to $43.4m, up significantly from $7.6m in the corresponding period of the previous year.
BetMakers put this growth down to the expansion of its Australia-facing platform and also its managed trading services offering, while the group also noted the impact of its purchase of the racing, tote and digital business from Sportech in June 2021.
Breaking down its performance in H1, revenue from BetMakers’ global betting services arm was 210.3% higher at $18.0m, helped by the launch of an additional two platforms and managed services clients.
Two additional bookmakers have launched since the end of the half, with a further six due to go live by the end of the financial year.
Global tote revenue for the half amounted to $23.2m, with no comparable figures for the previous year due to BetMakers only acquiring the Sportech business at the very end of its 2021 financial year.
During the first full half of ownership, BetMakers was able to renew contracts with a host of key racing partners such as Penn National Gaming and Catskill Regional, while it also signed a 10-year extension to a contract with Monmouth Park in New Jersey. Other deals included a retail partnership with Caesars Entertainment in New Jersey and a commingling services extension with the Hong Kong Jockey Club.
Revenue from global racing network activities also increased 27.8% year-on-year to $1.8m. After the end of the half, BetMakers signed a 15-year extension to an exclusive fixed-odds betting contract in New Jersey.
Also after the end of the period, BetMaker announced Christian Stuart, formerly of Caesars Entertainment, as chief executive of its North America business, while it appointed lawyer Rebekah Giles as its independent non-executive director.
In addition, BetMakers last month agreed a deal to power Australian operator CrossBet’s entry into Ontario’s sports betting market.
Gross profit for the half was 700.0% higher at $32.0m, but BetMakers noted a sharp rise in operating expenses, with these rising 426.5% year-on-year to $35.8m, excluding share-based payment expenses, which on their own increased 713.2% to $25.2m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) improved from a loss of $847,000 in the first half of the 2021 financial year to a positive of $2.3m during the most recent half.
However, the sharp increase in costs offset revenue growth, with loss after tax widening from $4.4m to $27.8m. Despite this, closing cash balance for the business at the end of H1 amounted to $110.9m, up 61.7% year-on-year.
Looking ahead to H2, BetMakers set a number of core strategic focus areas, including the ongoing execution of its B2B strategy across Australia and the US, the launch of more Australian bookmakers on its platform and expanding its tote network with new clients in the northern hemisphere.
BetMakers also highlighted growth plans in New Jersey, including the launch of fixed-odds race betting in the state and establishing a fixed-odds model in the market that can then be expanded into other states.