BetMakers, an Australian betting services provider, experienced revenue growth but also faced increased losses in the year ending on June 30. While the global betting services segment saw significant revenue growth, it was no longer the top revenue generator for the company due to acquisition-driven growth in other areas. The acquisition of the global tote arm from Sportech played a pivotal role in BetMakers’ revenue surge. However, the costs associated with acquisitions also escalated, resulting in a substantial pre-tax loss for the company.
Revenue Analysis:
BetMakers reported AU$91.7 million in revenue for the fiscal year, representing a significant increase compared to the previous year. The global betting services segment, previously the main revenue driver, contributed AU$19.5 million, a remarkable growth of 179.3%. However, due to acquisitions in other segments, the global tote arm emerged as the new revenue leader, generating AU$46.9 million, a substantial increase from AU$1.7 million the previous year. The BetMakers global racing network also saw growth, bringing in AU$4.1 million, a 28% increase.
Costs and Gross Profit:
While the costs of goods sold increased, the pace was relatively slower, rising from AU$9.3 million to AU$25.4 million. Consequently, BetMakers achieved a gross profit of AU$66.3 million, more than six times the previous year’s total.
Increased Costs and Losses:
The costs associated with acquisitions had a significant impact on BetMakers’ financial performance. Employee benefits surged to AU$46.8 million, five times higher than the previous year, while share-based payments reached almost six times the previous year’s total at AU$71.0 million. As a result, BetMakers recorded a pre-tax loss of AU$96.3 million, compared to a loss of AU$20.9 million in the previous fiscal year. After factoring in a tax benefit of AU$7.1 million, BetMakers’ final loss amounted to AU$89.2 million, five times the loss incurred in the previous year.
Key Deal with News Corp:
Towards the end of the financial year, BetMakers secured a significant deal with a venture led by media giant News Corp. The company anticipated that this partnership could generate revenue of up to AU$300 million over a five-year period. Subsequently, the consortium involved modified the deal by acquiring the betting brand TexBet, increasing the maximum potential revenue for BetMakers from the operation.
BetMakers experienced notable revenue growth driven by its global betting services and the acquisition of the global tote arm. However, the costs associated with acquisitions led to increased expenses and resulted in a substantial pre-tax loss for the company. The partnership with News Corp presents significant growth opportunities in the future. As BetMakers moves forward, it will need to balance its expansion efforts with effective cost management to achieve long-term profitability and success in the competitive betting industry.