The Board of betinternet.com plc (“betinternet.com”), the global on-line gaming group, is pleased to provide a trading update in relation to the Company’s unaudited results for its financial year ended 27 May 2007.
The Company has achieved profitability at an EBITDA level for the full year. This represents an overall improvement in performance and shows a considerable advance on the previous year.
The Company’s pari-mutuel operation, European Wagering Services (EWS) has continued to progress well and has a growing customer base utilising various technologies to place wagers through its Isle of Man based hub, directly into race-track betting pools. The withdrawal of Neteller’s services from the United States gaming market had an adverse impact on the operation in January and February of this year, whilst alternative payment solutions were sought. In light of this, the board is keen to discover the United States Treasury’s proposals for the enforcement of the United States Unlawful Internet Gaming Enforcement Act (UIGEA) and how it intends to protect legal operations, such as EWS, from being disadvantaged.
The sportsbook continues to benefit from the new website portal, launched in June 2006, which has been regularly updated to reflect the specific requirements of betinternet’s customer base, the majority of which remains based in the Far East. As a result of a number of enhancements to internal management systems, the amount of football leagues and markets that are offered, especially Asian Handicaps, has greatly increased and the Company’s traders are now considerably better-placed to manage the risk of this increased offering.
The two casinos and fixed-odds games remain very popular and account for just over half of the sportsbook’s overall Gross Margin.
The second half of the year has presented some challenges as the Company has dealt with issues following the introduction of the UIGEA. Although the board believes that the Company remains fully compliant with this Act, the banks and other service providers have taken a risk-averse stance and this has had a greater effect on our business than previously anticipated.
As part of the sportsbook enhancement process and to widen its appeal within the British Isles, the Company intends to offer betting on UK horseracing within the next two months. Initially, this will be a soft-launch, but it is expected that a full service will be offered shortly thereafter and that marketing activity will increase at this time.
The Company intends to further develop its pari-mutuel website, www.link2bet.com to provide for a much improved user experience with enhanced features to take advantage of the restrictions on fixed-odds betting brought about by the UIGEA. This will be in addition to seeking more content for both thoroughbred and greyhound racing.
Due to legislative changes in the proposed launch country (Russia), we have been unable to advance our white-label service, although this offering is now fully developed and we will continue to seek appropriate business partners.
As previously announced, the Company will continue to seek complementary acquisitions and is currently pursuing potential opportunities.
Managing Director, Garry Knowles said “I am pleased that we have been able to achieve an EBITDA profit for the full year, despite it being a challenging time for the gaming industry. We continue to make good progress and I fully expect that the changes that the Company has introduced during this period, combined with the continual customer-focused development of both the sportsbook and pari-mutuel websites, will see the Company make further improvement in the forthcoming year.”