The Isle of Man-based online betting group announced the preliminary results for the year ended May 28, 2006. Group turnover decreased to £67.6m from £93.7m in 2005 as a result of the previously announced setback in pari-mutuel turnover and the effect of the reduction in fixed-odds marketing, held back pending the new website launch. Despite being able to maintain the pari-mutuel gross operating profit, the group loss was £1.9m, the same as last year.
Sportsbook turnover rose to £57.5m from £47.9m a year earlier, while pari-mutuel turnover showed continued signs of growth after last year\’s setback. Administration expenses have been reduced by some 13.9% on \’like for like\’ basis.
Betinternet ended the year very strongly, showing EBITDA profits in the months of April and May, following the introduction of a suite of fixed-odds games together with a download casino from Real Time Gaming, which complement the existing Play Live Casino product, very popular with the firm\’s Far East based customers.
The positive trend has continued into the new financial year and the Board is confident that the new initiatives in place plus the launch of further new products, including& a the new sportsbook platform, a flash casino, multi-player Mahjong and coreFootball, will produce a full year profit for the coming financial year.
It is important to note that Betinternet planned to improve the fixed-odds performance by developing a new sportsbook platform hosted in Curacao accepting bets from US customers. IGW, the chosen software supplier for the development of the new sportsbook platform, was unable to provide a working product that suited Betinternet\’s specific needs in time for the World Cup finals in June 2006. The Board of Betinternet decided to terminate the IGW contract, obtaining a full refund of costs, and to develop its own software, which will give the company much greater control and a quicker route to market for new products or improved functionality.
Alongside these developments, it became clear that Betinternet would be able to accept wagers from US customers without having to relocate its fixed-odds servers away from the Isle of Man. The Board therefore decided to continue to operate the fixed-odds servers under its license in the Isle of Man, while the games and casino operate on servers based in Curacao, where the company had successfully been granted a gaming license.
Following the recent negative events in the US, Betinternet has decided to take a more cautious view of the US market. As such, the company\’s exposure in the region is very small and represents an insignificant percentage of its current turnover. The Board will continue to monitor developments and adapt its strategy accordingly.
EWS is now running as a successful profitable operation, with increasing levels of turnover and strong margins. The company plans to increase the turnover of the totalisator hub in the Isle of Man by offering incentives to customers betting predominantly on greyhound racing as well as increasing the marketing spend to bring more customers to the link2bet.com website.
Global Coresports, in which Betinternet.com purchased a 22.5 per cent stake, is due to launch its first product coreFootball, a dynamic peer-to-peer soccer management game using artificial intelligence, with the new soccer season.
“We have made considerable and encouraging progress towards our stated aim of having a compelling and exciting one-stop entertainment website for the fixed-odds business. I am confident that this will be the boost that is required to bring sustainable profitability in the coming financial year,” commented Denham Ehe, Chairman of Betinternet.com.
“We can also expect a continued strong profitable performance from our pari-mutuel business, European Wagering Services, as it builds on the growth and success that we have seen during the last six months,” he added.
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