Softswiss

BetMakers Technology Group grew its revenue 9.3% to A$26.1m in Q1 of the financial year 2024 (three months ended 30 September 2023).

Following that growth, the group reported a narrowed EBITDA loss of A$767,000 for the quarter, down from a A$6.5m loss in the prior-year comparative period.

The business still declared a net loss of A$7.6m, however, compared to a A$5.9m net loss in Q1 FY23.

BetMakers ended the quarter with a cash balance of A$36.2m, including unrestricted cash of A$22.5m.

The company’s management team is now working towards maintaining an unrestricted cash balance of at least A$20m, it said.

US restructure completes

In addition to its improving financial situation, BetMakers also announced it had completed a restructure of its US operations, intended to streamline the business and reduce costs, thus providing it with “a strong footing to build further scale in the US in a profitable way.”

Now, the company is focused on continuing to reduce costs throughout the rest of the financial year, which it expects will help bring it towards a cashflow breakeven point.

“The team has done a great job in simplifying our operating model and sharpening our focus over the past six months,” said BetMakers CEO Jake Henson (pictured).

“With our suite of market-leading technology for the racing and wagering industries, the company is focused on growing our reach as a B2B operator on a scalable cost base.

“There will be a continued focus on reducing and normalising the cost base, and we expect to achieve stronger underlying cash receipts in Q2 due to, among others, the commencement of a new racing season and the onboarding of new clients.”

Development continues

In addition to the above developments, the company also extended contracts for the provision of its pricing software and data delivery services with several of its key partners during the quarter, including Penn Entertainment, Dabble, PointsBet and William Hill/888.

It also continues to develop its NextGen platform, “that will underpin how it services its digital customers globally into the future,” it said.

“Refinement and customisation continues on this platform which will be a transformational year for BetMakers digital customers in the US, Australia, Asia and Ireland.”

The NextGen platform recently passed a successful load test of 10,000 bets taken per minute, while successfully processing and resulting more than 200,000 bets in production over a three-minute period.

Other business updates during the quarter included an agreement with Caesars Entertainment, which saw the operator embed BetMakers’ tote solution for point-of-sale wagering in Nevada. 

The solution is now entering its final stages of testing and both parties are pushing to go live before the end of calendar year 2023, BetMakers said.

In addition, a new national tote system for Norway, implemented through state-owned operator Norsk Rikstoto, is on schedule to go live during Q1 of calendar 2024, marking the beginning of a 10-year service agreement.

ASX-listed betting and racing supplier BetMakers generated A$91.7m in revenue during its full year 2022 (12 months ended 30 June), more than quadrupling the A$19.5m revenue registered in FY21.

Revenue growth was driven in large part by the firm’s acquisition and integration of Sportech’s racing, tote and digital assets, but was also helped by growth from its existing platform and managed trading services clients, as well as expansion in its content distribution rights and operator integrations.

A$40.7m of the revenue came from the firm’s Global Betting Services segment, more than doubling its result in the full year 2021, when revenue totalled just A$14.6m.

Betmakers’ Global Tote division – formerly the Sportech tote assets – delivered a further A$46.9m, having signed agreements with Monmouth Park, Norway’s Norsk Risktoto, Caesars Entertainment, and other deals in Puerto Rico, Peru and Chile during the period.

The acquisition was completed just some 12 days before the beginning of the reporting period, meaning comparisons to its contribution during FY21 (A$1.7m) are immaterial.

A further A$4.1m came from the firm’s Global Racing Network, representing year-on-year growth of 28.1%.

From its total revenue, the business generated gross profit of A$66.3m at a margin of 72%, up more than sixfold from A$10.2m at a margin of 52% in the prior year.

After operating expenses of A$64.1m, the business declared adjusted EBITDA of A$2.2m, at a margin of just 2%. That is an improvement over the prior year period, when the business declared a negative adjusted EBITDA contribution of A$2.9m.

When accounting for share-based payment expenses (A$71m), deal costs (A$16.5m) and impairment of receivables (A$772,000), however, the business declared an overall EBITDA loss of A$86.1m, compared to an A$18.1m EBITDA loss in FY21.

Subsequent depreciation and amortisation expenses of A$9.7m, finance costs of A$541,000 and a A$7.1m tax benefit, left the business to declare a loss after income tax of A$89.2m, and after A$3.2m in other comprehensive income, a total comprehensive loss for the year of A$86m, down from a A$17.5m net loss in 2021.

As of 30 June, the business had 479 employees across 11 offices globally. It offers services in more than 30 countries to over 60 online betting operators and 225 racing partners, operating under more than 45 regulatory licences.

Looking ahead to the full year 2023, BetMakers intends to grow the global presence of all three of its main business divisions.

In the Global Betting Services segment, the firm intends to launch its customer-facing data platform, NTD, in Australia using BetMaker’s proprietary Next Generation digital wagering platform. It expects to on-board nine new recently contracted platform operators during the first half of the year, and expand the software into the US market.

The Global Tote division is expected to launch its Global Tote Hub, to connect existing and new tote customers, and continue the rollout of its BetLine terminal hardware and technology in the US and new markets.

In the Global Racing Network division, the business intends to expand its New Jersey rollout of fixed odds racing, deploy its proprietary racing integrity and reporting platforms into new jurisdictions globally, and export more than 12,000 races into international markets for US racing partners including Penn, Monmouth Park, Kentucky Downs, Century Downs and others.