WEBIS HOLDINGS PLC
(“Webis” or “the Group”)
The board of Webis, the Group specialising in the provision of sports betting, pool wagering and the operators of Cal Expo, the Californian harness track, provides the following trading update for its subsidiaries betinternet.com (IOM) Limited (“betinternet”) and WatchandWager.com Limited (“WatchandWager”) for the financial year ended 31 May 2014.
WatchandWager, the Group’s pool-wagering operation, experienced good turnover growth for the full year, boosted by new player activity into the Hong Kong Jockey Club and Swedish pools. Both these outlets provide us with a competitive first-mover advantage over other international operators and are part of our growth strategy to secure further global licences and agreements. Following these successes, the board has agreed to further investment in the pool wagering division, concentrating on recruiting additional staff and further improvements to the watchandwager.com platform. The board is confident that this additional investment expense will translate into enhanced profitability in the near term, justifying the commitment to compliant operations in regulated jurisdictions.
Cal Expo, the Sacramento based racetrack operation, adjusted the meeting schedules to achieve the best return for all stakeholders and, by keeping a very close control of the costs, helped to bring profitability to this part of the Group, despite a reduction in turnover for the full racing season. The racetrack has continued to offer meaningful leverage in developing the pool-wagering and wider business, with WatchandWager and partner racetrack groups now actively involved in discussions on legislative change within online gaming in California.
The Group’s sportsbook operation, betinternet, saw turnover continue at a similar level to the previous year, although we experienced some external challenges in the second half which resulted in a lower overall full-year margin than anticipated. The changing government perceptions towards online gaming in Singapore, one of our main Asian markets, meant we were obliged to curtail some of our casino and gaming activity from February. A reduction in card authorisations from Singapore and some unfavourable football results in the latter part of the European football season also had an impact on the overall gross margin achieved.
The board continues to monitor the possibility for regulatory changes in Singapore and our advisors remain close to the review process. There has been no official notification of the possible extent of any changes or any associated timeline. Notwithstanding, we have reduced the sportsbook’s exposure to this jurisdiction, as we have been able to attract a greater proportion of sports betting activity from other regions. In particular, In Play Tennis, where betinternet offers customers a unique product and pricing has shown significant growth.
WatchandWager now has full access to all of the major US racetrack pools, following the recently announced agreement with the New York Racing Association. This contract signing was the trigger for a further increase in a variety of targeted marketing activity for the watchandwager.com website. This marketing activity commenced in July and is budgeted to increase in the period up to the Breeders’ Cup in early November.
WatchandWager expects to renew the California Horse Racing Board racing licence for Cal Expo in August and restart racing in early October. Following consultation with US media groups, Cal Expo will be applying to switch from a Friday and Saturday schedule to race on Saturday and Sunday evenings. WatchandWager will also be increasing the prize money incentive scheme for the upcoming season. These initiatives are designed to promote strong horse numbers throughout the season and encourage greater exposure of races on television.
The board has committed to applying for a UK licence on behalf of Webis under the recently introduced legislation by the UK government. Webis’ position as an existing licence holder in the Isle of Man gives it an option to apply for a ‘continuation licence’ under this legislation, which is designed to offer a continuity of business for UK resident customers during the licence application process.
Results during the recent football World Cup tournament in Brazil were generally favourable for betinternet which achieved an encouraging margin.
The board is also considering restating its reporting currency to United States dollars to more accurately reflect our currency exposure.
The board remains confident that the strategies for all areas of the Group’s activities are correctly aligned to ensure the best prospects for future growth.