BetMakers, an Australian supplier, made headlines earlier this year when it announced a new betting venture called Betr in collaboration with News Corp and Tekkorp. As part of this venture, BetMakers disclosed that it had made a payment of AU$15 million to Matthew Tripp, who had previously agreed to advise the company on its B2B wagering strategy and invest AU$25 million in BetMakers shares. The payment came under scrutiny during the company’s annual general meeting, as the Australian Securities Exchange (ASX) questioned the materiality of the payment and whether shareholder approval was necessary.
The Payment and ASX Rules:
BetMakers’ payment to Matthew Tripp raised questions about its materiality and the need for shareholder approval. According to ASX rules, if there is a “material change” in the terms of a previously agreed transaction, the entity may be required to seek fresh approval from its security holders. Additionally, ASX listing rule 3.1 mandates immediate disclosure of any information that could have a material effect on the price or value of a company’s securities.
BetMakers’ Position on Materiality:
When questioned by the ASX, BetMakers stated that it did not consider the payment to be material. The company argued that the payment should be viewed as a business expense rather than being based on its earnings. Instead, it proposed using its expenses amounting to AU$173.7 million as the base amount, with the Tripp payment accounting for 8.6% of that figure. Furthermore, BetMakers suggested that the payment should be amortized over a 10-year period, equating to only AU$1.5 million per year. The company also highlighted the potential for increased revenue resulting from the Betr deal over the same period.
BetMakers’ Justification for the Payment:
BetMakers maintained that the alteration of the original agreement to provide a cash payment did not change or diminish the original arrangement. It clarified that Tripp would still receive the performance rights initially agreed upon once the extended escrow period ended. The company emphasized that the payment was not additional remuneration for Tripp’s services but rather an incentive for securing the Betr deal on behalf of BetMakers. It refuted the notion that the payment was linked to the new escrow arrangement and insisted that the rationale for the payment had always been associated with the Betr deal.
Buckingham’s Statement and Business Rationale:
BetMakers addressed the ASX’s characterization of CEO Todd Buckingham’s comments during the annual general meeting, asserting that they were taken out of context. The company clarified that Buckingham’s statement regarding Tripp’s assistance was made in response to a question about the ongoing relationship with Tripp, unrelated to the Tripp payment. BetMakers stated that Buckingham’s intention was to highlight the strong relationship and alignment of interests between Tripp and the company. Once again, the company underscored that the Betr deal served as the primary rationale for the payment.
Tripp’s Future Remuneration:
BetMakers emphasized that Tripp was not entitled to any further remuneration for his ongoing consultancy services, dispelling any notion of ongoing payments beyond the initial agreement.
BetMakers’ payment to Matthew Tripp in relation to the Betr deal has raised questions about its materiality and the need for shareholder approval. The company maintains that the payment is not material and should be considered a business expense. BetMakers argues that the payment was intended to incentivize Tripp’s role in securing the Betrdeal rather than providing additional remuneration. The company’s response to the ASX’s inquiries seeks to clarify the nature and justification of the payment. As the situation unfolds, further examination and clarification may be necessary to ensure compliance with ASX rules and address any potential concerns from shareholders.