WatchandWager confident of California licence extension
Webis Holdings claims the California Horse Racing Board (CHRB) is likely to grant its WatchandWager subsidiary an advanced deposit wagering (ADW) licence renewal through to December 2020, after unanimously approving a three-month extension.
The CHRB’s decision yesterday (November 29) means WatchandWager be allowed to accept bets from California residents on horse racing until a full renewal hearing takes place in February next year. Its licence had been due to expire next month.
Webis said that its board “expects its licence to be renewed to December 2020” at the hearing.
WatchandWager described the interim renewal as “strategically important […] in light of the anticipated legislation legalising sports betting in the state”, despite California lawmakers failing to file a bill to legalise sports betting since the Supreme Court repealed PASPA in May.
The operator already has a strong land-based presence in the state, operating the Cal Expo Harness Racetrack in Sacramento, while its head office is based two hours west in Larkspur. WatchandWager received approval from the Thoroughbred Owners of California organisation to allow residents in the US state to wager on thoroughbred racing nearly five years ago.
“As an existing track operator in California, WatchandWager is in a strong position to offer sports betting if it is passed into law,” Webis explained.
Webis stated in its financial report for its financial year ended May 31st, 2018 that Cal Expo “continues to provide leverage for our related global pari-mutuel operations”.
The report, which was published on Wednesday (November 28), added: “It should be recognised California will be a little slow to adopt regulation, but we are very encouraged by the certainty that only California land-based operations will be licensed in the state.”
The renewal in California has provided a timely boost after Webis in October announced the cessation of a partnership with an unnamed syndicate that would lead to an $800,000 (£628,000/€706,000) reduction in gross margin for the financial year ending in May 2019.
Webis posted a 23% increase in turnover from $371.9m to $461.2m for the year, leading to a 3% rise in gross profit to $5.5m from $5.3m.
However, with operating costs up by 3% to $5.4m due to licensing processes in the US and other markets, Webis generated a marginal net profit of $103,000, having returned to the black with a $5,000 surplus the previous year.
The company already holds a multi-jurisdictional pari-mutuel licence for WatchandWager in North Dakota, as well as individual licences in the states of California, Colorado, Kentucky, Maryland, Minnesota, New York and Washington. Negotiations over securing licences in three other unnamed states are ongoing.
“The company still occupies a significant first mover advantage in the USA, with our array of USA licences, banking settlement and general business operational skills,” non-executive chairman Denham Eke said.
“These, coupled with the operation of Cal Expo racetrack in Sacramento, California are significant assets in what is regarded as the land of opportunity in regulated gambling globally, especially regarding sports betting,” Eke explained. “The company stands very well positioned in particular in California, a gaming market that will dwarf other USA states in size when regulated.”