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ASX-listed BlueBet will consider launching a B2B sportsbook solution for US partners after revenue fell by 5.1% in the first half of its 2023 financial year.

Topline numbers

In H1 FY23 (six months ended 31 December 2022) total amount wagered with BlueBet increased 6.1% year-on-year to A$280.5m, resulting in wagering revenue or net win of A$27.1m.

That net win was down 5.1% against the prior-year comparative period, while gross profit also slipped by 10.7% to A$13.1m.

EBITDA losses for the half reached A$10.5m, compared to A$0.2m in H1 FY22.

Losses after income tax hit A$9.9m, compared to A$0.8m, while net cash from operating activities was a negative A$8.6m, compared to positive net cash of A$2.5m.

Earnings breakdown

BlueBet said the decrease in net win was the result of a mix shift away from racing and towards sports betting, as well as increased promotional investment.

Net margin for the company is expected to return to above 10% in H2, it added, compared to the 9.7% margin recorded for H1 FY23.

BlueBet CEO Bill Richmond: “We have had strong early interest for our white-labelled sportsbook-as-a-solution B2B offer in the US, with discussions underway with multiple potential B2B partners.”

The operator said its significant investment in product and marketing “positions BlueBet for continued market share growth,” a claim backed up by the 60,328 active customers recorded during the period, up 33.8% year-on-year.

The average cost to BlueBet of acquiring a first time depositor (FTD) was A$447 on a 12-month rolling basis, while the average annual customer value was A$884.

The company’s total cash balance was A$32.2m as of 31 December 2022.

Geographical and vertical mix

The firm’s US operations are off to a relatively sedate start, with its ClutchBet brand having soft launched in Iowa in August. The brand is expected to launch in Colorado in March.

BlueBet also holds market access in Louisiana and Indiana, but said it is taking a ‘capital lite’ approach to entering US markets.

Its $500,000 strategic investment in fantasy sports provider Low6 was leveraged to launch BlueBet’s first free-to-play game ahead of the NFL Super Bowl.

The operator also revealed “significant interest” in the creation of a B2B sportsbook-as-a-solution model using BlueBet tech in the US. Discussions are reportedly underway with several potential partners.

BlueBet’s domestic Australian operations, meanwhile, are expected to return to operating cash flow positive in H2.

Just over half of the firm’s betting handle in Australia came from thoroughbred horse racing, at A$143.5m, up 4.8% year-on-year.

Greyhound racing was the next most popular sport by handle, with customers placing bets worth A$70.1m, though this was down 3.6% on the prior year.

Bets placed on harness racing totalled A$24.5m, up 0.5%, while betting on other sports grew by 34.7% to A$41.2m.

Management commentary

“The BlueBet team delivered a strong performance in H1, remaining focused on delivering the strategy and on providing an excellent experience for our customers in the face of increased market competition,” said BlueBet CEO Bill Richmond. 

“As a result, we continue to gain market share in Australia and make strides in our US market entry. Our effective investment in brand and product continues, with our differentiated approach winning new customers and delivering marketing efficiencies.

“In the US, the rollout of ClutchBet continues, with first bets taken in Iowa in August as we head towards an expected go-live in Colorado in March. We have had strong early interest for our white-labelled sportsbook-as-a-solution B2B offer in the US, with discussions underway with multiple potential B2B partners.

“We are well capitalised to execute our growth plans in Australia and the US, and with a strong US team now in place, we are well placed to deliver our growth strategy in H2 and beyond.”

Priorities for H2 FY23

Besides returning its Australian operations to positive operating cash flow and continuing to expand operations in the US, BlueBet’s priorities for H2 23 include improving its use of customer segmentation to drive “more efficient media targeting, improved promotional effectiveness and better conversion.”

The brand will also increase its investments in marketing tech to help deliver improved channel efficiency, better personalisation and higher customer conversion rates.

Another free-to-play game is also in development with Low6, with a view to launching by the end of H2 23.

The firm said it would take a “hyper-local” approach to market entries in the US. For example, in Iowa, the operator runs three ClutchBet Sports Lounges in Dubuque, North Liberty and Iowa City, as well as holding a partnership with the US Hockey League’s Dubuque Fighting Saints.

That strategy reflects BlueBet’s brand presence in Australia, where it holds partnerships with the National Rugby League (NRL) Dolphins and with Penrith Panthers, whose home stadium is now called BlueBet Stadium.

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