Australia is one of the leading countries in the online gambling industry. Australian betting operators offer players a variety of options, to place their bets on their favorite sports. In the beginning, in December some news regarding the acquisition of one of the biggest sports betting operators BetMaker were spread.
BetMaker has some major plans to expand its brand and popularization not only locally but in the US as well. BetMaker plans to acquire Global Tote business from the UK operator Sportech, which is also one of the biggest betting operators offering its services to millions of players in the US.
Sportech has also increased in operation reaching a £30.9m deal to sell its Global Tote, which is the betting technology solution to BetMaker Technology Group. The announcement has been made shortly after the media speculation on Sportech struggles with its Tote operations. By making the announcement the announcement the betting operator once again proved the successful configuration in the local market and the ability to expand to the new levels.
The big deal
With the new deal being announced, the BekMaker should be able to pay 20% of the deal prices, which will be non-refundable in case of changes in the agreement, or even cancelation. The BetMaker shareholders approved the deal, signing the document regarding prepayment. The balance is due when regulatory body approvals are secured with the parties. The approval is expected to happen in the first half of the upcoming 2021 year.
The operations of Global Tote are spread across 37 countries worldwide, outlining the strong position in the global market. The statistics and the recent turnovers, published by many affiliate websites also prove the statement. Gratis Spins was one of the first to publish the new deal terms, as well as publish statistics on the total turnover of the business, including the US$12.2b total income, from the racing wagers from the last year. This unit derived a revenue of £30.8m, earnings of £5.6m, and a pre-tax loss of £800k. The major shift is vivid if comparing to the revenue of Global Tote at the beginning of the year, with £12m, with earnings of £1.6m and a pre-tax loss of £1.2m.
Representatives of BetMaker have also commented on the future plans of the company, saying that the new deal would assist the global expansion of the company, including Global Tote’s operations in over 36 US states. Some of the assets, which are included in the acquisition deal include Americas Tote Business, the white-label betting solution Americas Digital Business, and the Quantum Tote Technology betting engine.
Todd Buckingham, the managing director of BetMaker also made a personal announcement regarding the upcoming deal. He said that the deal would surcharge the entry of the company to the US market and said that the company is left with a good place. This will also play a huge role in increasing and capitalizing the growth of US fixed-odds race betting. The company aims to fund the acquisition through an equity raising involving 83.3m new shares, equal to about 13.9% of the company’s currently issued shares.
This is not the first divestment made by the company recently. The first one was earlier this year, following the $6.75m sales of its Sports Haven property in New Haven, Connecticut to Criterion Group LLC. On this deal, Sportech agreed to a six-month lease at a cost of $300K to continue using the property. Perhaps this turned out to be the first major step and the great beginning for the greater journey.
The transition to 2021
Sportech also reported that the revenue of £20.2m in the first half of the year is a decline of 38% from the same period last year, while its pre-tax losses more than quadrupled to £10.7m. Rochard McGuire, the CEO of the Sportech noted the impact that the global pandemic had on the sports betting industry revenue. Though according to his statement the major decline should bring the major raise in the revenue with a very realistic prospect in the first half of 2021.
As for now, the Sportech financial struggles led to a takeover bid by the Standard General private equity group last month, which Sportech rejected based on its belief that the £53.8m bid “fundamentally” undervalued the company. In case the deal goes as planned and the agreement is completed with the initial statement, the Sportech operations will be reduced to its Venues business in Connecticut, its Lottery unit, and the Bump 50% in charitable raffle division.
Sportech on its behalf said that the business’s current intention is to proceed from the Global Tote sale to shareholders when the board considers that the time has come the opportunity has opened. The company also aims to reserve the right to capitalize on any upcoming possible investment opportunity that might arise before even throwing the cash at the shareholders.