Following the recent review on the future of the Group’s Sportsbook operations, the board has come to the conclusion that, in the light of the opportunities available to the US pari-mutuel division, continuing to support the fixed-odds division is no longer a viable strategy. The on-going development of jurisdictional protectionism for fixed-odds operations by either prohibition or onerous regulatory and levy requirements means that betinternet.com has little chance of maintaining further profitability as operational expenses increase.
As a result, the Group will close its fixed-odds betting and games operation, betinternet.com Limited, (the “Sportsbook”) with effect from 5 March 2015 to concentrate solely on the development of WatchandWager LLC (“W&W”) from its operational base in San Francisco, California.
W&W provides pari-mutuel wagering through distribution channels to a global client base. Currently, the company’s operations are fully licenced with a number of prestigious racetrack partners within the United States, Hong Kong, Canada, United Kingdom, Ireland, Australia and France, together with the Cal Expo Harness Racetrack operation in Sacramento, California; the latter licenced by the California Horse Racing Board. The board believe that a sole focus on developing and expanding upon W&W’s already impressive achievements is in the best interests of the Group.
The board discussed the Sportsbook’s disposal as a going concern with several interested parties, but unfortunately these discussions did not lead to any firm offers and accordingly the decision to close was the only viable option.
In the Full Year ending 31 May 2014, US$0.2 million of the Group’s Total Comprehensive Income was attributable to the Sportsbook. In the recently released Interim Report covering the six month period to 30 November 2014, US$1.23 million of the Group’s Gross Assets were attributable to the Sportsbook. It is anticipated that the cost to the Group of the closure will be in the region of US$0.3 million.
As required under Isle of Man licence conditions, betinternet.com will repay outstanding client balances, secured in segregated bank accounts, with immediate effect.