BetMakers issues earnings warning amid major tech investment
In a trading update for Q2 FY23, which ran until 31 December 2022, Betmakers – which has seen its share price fall dramatically over the last 12 months – said it delivered its largest ever quarterly receipts from customers of AU$26.9m ($18.9m/€17.5m/£15.3m). This was up 9% year-on-year and also an increase of 13% on the previous quarter.
During the quarter, BetMakers received approximately $1.4m in cash receipts from NTD Pty Ltd following the launch of its Betr brand, which opened for business in October 2022 and has attracted more than 300,000 sign-ups. BetMakers receives 25% of Betr’s net gaming revenue, with potential income of $300m over the next 10 years.
The group said the NextGen wagering platform it has developed for Betr will also be leveraged in other areas of its global business, as it has been able to offer technology upgrades and an upgraded racing embedded solution to clients.
As well as developing the NextGen wagering platform for Betr, a busy period of development also saw BetMakers launch its Global Tote Hub during the three-month period.
The cost of these major projects will impact BetMakers’ earnings during the current financial year, it said. While the group posted adjusted EBITDA of $2.2m in FY22, it expects its recent investments to result in negative earnings for FY23.
Betmakers said that its management will focus on reducing and normalising its cost base during the second half of FY23, with the aim of delivering earnings growth in FY24.
“The company believes that the investment made over the last six months puts it in a stronger position to deliver the next phase of growth, both in revenue and earnings,” said the company in a statement.
The rise in revenue was in part due to its largest-ever Spring Racing Carnival, with 25 platform clients live and trading, including its newly launched News Corp-backed partner, Betr.
BetMakers’ platform clients processed 4.7 million bets over the course of Melbourne Cup week, with more than 1.7 million on Melbourne Cup day alone.
BetMakers posted revenue of $91.1m in FY2022, its first full year following the £30.9m acquisition of Sportech’s global tote arm in June 2021.
The group recently defended a $15m payment it made to Matthew Tripp, the veteran industry executive behind Betr, after the Australian Securities Exchange questioned whether it broke listing rules.