The gambling technology group, BetMakers, experienced revenue growth during the 12 months ending 30 June 2023. However, the group missed consensus earnings estimates and saw a decline in its shares on the ASX. This decline was attributed to an impairment of its assets amounting to $8.9m.
Despite this setback, BetMakers’ revenue increased by 3.7% to $95.0m, compared to $91.7m in the previous year. The growth in revenue was primarily driven by the successful launch of their Next Gen wagering platform and managed trading service technology. Additionally, the expansion of content distribution rights and partnerships in global markets contributed to the revenue growth.
Out of the total revenue, BetMakers earned $43.1m from its global betting services division, which witnessed a 6.1% increase. This division’s revenue was boosted by the acquisition of Punting Form in November 2022 and the company’s expansion into Jamaica and advancements in New Jersey. However, the global tote division, despite being the largest division, experienced a 3.5% decline, generating $45.3m in revenue. Nevertheless, the global racing network division saw significant growth of over 60% to reach a revenue of $6.7m, mainly due to the introduction of a new fixed-odds offering in New Jersey.
The company faced cost pressures, with cost of goods sold rising from $25.4m in 2022 to $35.9m in 2023. This impacted the gross margin, which decreased from $66.3m to $59.2m. BetMakers invested heavily in new technology ($8m) and its international fixed odds offering ($7m). They also underwent an operational restructure to improve efficiency, resulting in cost reduction across product manufacturing, operations, staff, and administration. The company announced a $20m cost reduction program and reduced headcount by 23% since December 2022.
In terms of financial performance, BetMakers reported a negative adjusted EBITDA of $27.9m for the year. However, their loss after income tax benefits improved to $38.8m, compared to $89.2m in the previous year. The company’s CEO, Jake Henson, expressed confidence in future growth opportunities with Norsk Rikstoto, Penn Entertainment, and Caesars Entertainment. He also highlighted plans to simplify the operating model and retire legacy systems to establish a foundation for growth and generate positive operating cash flow in FY24.
