BlueBet, an Australian sports betting company, has experienced a decline in revenue for the six-month period, primarily attributed to higher marketing expenses and shifts in the sports betting market. Despite the revenue drop, CEO Bill Richmond expressed satisfaction with the company’s performance in Australia and progress in its entry into the US market. BlueBet launched its ClutchBet brand in the US, with the rollout ongoing. The company also showcased growth in active customers during the period. Looking ahead, BlueBet plans to prioritize marketing investments and expects to achieve positive operating cash flow in its Australian business in the second half of the year.
Marketing Investment and Revenue:
BlueBet attributed the decrease in revenue to an increase in marketing investment and market dynamics in the sports betting sector. Advertising and marketing expenses for the six months amounted to $11.4 million, representing a 67.5% increase compared to H1 2022. Despite the revenue decline, the company noted success in Australia and progress in its US expansion efforts.
Financial Performance and EBITDA:
Turnover for the half-year reached $280.5 million, reflecting a 6.1% increase year-on-year. After accounting for payouts, gross revenue totaled $36.2 million, similar to the previous year. Promotions given amounted to $9.0 million, resulting in revenue of $27.1 million before considering goods and services tax (GST). With GST factored in, revenue reached $24.7 million. The cost of sales remained stable year-on-year at $11.6 million, leading to a gross profit of $13.0 million. Earnings before interest, tax, depreciation, and amortization (EBITDA) incurred a loss of $10.5 million, with advertising and marketing expenses being the highest within the EBITDA expenses.
Australian Operations and Customer Growth:
BlueBet’s Australian operations generated $27.2 million in revenue, reflecting a 4.9% decrease. The majority of turnover was driven by bets on thoroughbred racing, followed by greyhound racing, sports, and harness racing. iPhone play accounted for the largest share of total turnover. The company reported a growth in active customers during the half-year, with a 32.3% increase compared to Q2 2022, reaching a total of 59,632 active customers.
US Expansion and Outlook:
BlueBet’s ClutchBet brand rollout in the US continued, with the company accepting its first bets in Iowa and an expected go-live in Colorado in March. BlueBet also expressed interest in white-labeled sportsbook solutions, with discussions underway with potential B2B partners. In the second half of 2023, marketing will be a top priority for the company, with increased investments in marketing technology. BlueBet aims to achieve positive operating cash flow for its Australian business and continues to focus on licensing processes in Louisiana and Indiana.
BlueBet’s financial results for the six-month period reflect decreased revenue due to increased marketing expenses and market shifts in the sports betting industry. Despite this setback, the company remains optimistic about its performance in Australia and progress in the US market. The growth in active customers indicates positive traction in customer acquisition. BlueBet plans to intensify its marketing efforts, leveraging technology to enhance its capabilities. The company anticipates returning to positive operating cash flow for its Australian business in the second half of the year. With ongoing US expansion and a focus on regulatory compliance, BlueBet aims to strengthen its position in both the Australian and American markets.