Waterhouse bets big on BET in new racing product deals
Sydney, Jan 28, 2020 AEST (ABN Newswire) – The Board of BetMakers Technology Group Limited ((ASX:BET) (FRA:T07) is pleased to announce that the Company and its wholly owned subsidiary, BetMakers DNA Pty Ltd (“BDnA”) have signed conditional commercial agreements to build and operate new wagering products with companies associated with Australian racing identity Tom Waterhouse (“Waterhouse Group”).
BetMakers and BDnA have agreed to terms to provide technology, data and services for:
– tomwaterhouse.com betting application (“App”) to be offered to the tomwaterhouse.com 80,000 members and designed for dual purposes of offering punters access to Australian bookmakers, delivering the best price(s) in the Australian wagering market from the one application, while at the same time providing wagering operators with a low-cost customer acquisition platform.
– Waterhouse global pricing and trading desk – a B2B Managed Trading Services (“MTS”) solution for wagering operators that are looking to outsource their trading operations. It intends to allow any wagering operator to have an outsourced Waterhouse team, powered by BetMakers technology, manage day-to-day bookmaking across hundreds of races with a solution aimed to reduce costs for the operators with minimal risk. The Waterhouse Group can provide ‘Pricing and Trading’ services along with ‘Minimum Guaranteed Returns’ to wagering operators that use the B2B service.
As part of the deal, the BetMakers will receive revenues generated from both products in a shared arrangement with the Waterhouse Group. In addition, Waterhouse’s venture capital arm (“Waterhouse VC”) will receive performance rights (“Performance Rights”) which will convert into options over shares in BetMakers (“Options”). The number of Options which may be issued on conversion of the Performance Rights will be calculated with reference to the amount of revenue the new products derive for BetMakers over a 2 year period. Each Option issued will have an exercise price of $0.18, which is a 10% premium to the 20-day VWAP as at 24th January 2020.
Both agreements are conditional on shareholder approval, and will commence on BetMakers obtaining all necessary shareholder and regulatory approvals in respect of the issue of the Performance Rights (the material terms of the two agreements are annexed to this announcement).
Waterhouse said: “I am excited by both these significant new ventures and as a supportive shareholder of the Company going forward that we have settled on a perfect partnership with BetMakers – we believe it is a company positioned globally as the leading supplier of wagering data and technologies.”
BetMakers CEO Mr Todd Buckingham said: “We believe these deals are material to the Company – through activating the Waterhouse Group’s 80,000 members along with international growth opportunities we have identified. I am especially pleased to have such a vote of confidence from the Waterhouse Group to partner with us on our long-term strategy.”
New Tom Waterhouse App
Tom Waterhouse, former CEO of tomwaterhouse.com and William Hill Australia, has indicated to BetMakers the new App is set to launch to 80,000 members in the June Quarter 2020.
Features planned for the App will allow customers to access all their individual betting accounts in one application to get the best price. Customers will be able to easily sign up to new accounts with any participating wagering operators via the App, providing a lower customer acquisition cost option for all online bookmakers that participate.
Tom Waterhouse said: “This is a great concept because it provides our clients the best chance to get the right price on our selections – as well as their own selections.”
“For bookmakers, we believe this will deliver the best cost per acquisition solution from any of their acquisition strategies. The incentive for punters to sign up to new accounts with wagering operators and access multiple bookmakers from one app is attractive. It is a win-win solution for punters and bookmakers, and I am delighted that BetMakers can partner with us to deliver a unique product with their world-leading technology and solutions.”
New Waterhouse B2B Managed Trading Services
BetMakers and BDnA have signed an agreement with the Waterhouse Group to provide technology and services for a Managed Trading Services (“MTS”) solution for existing and potential wagering operators to outsource any part – or all – of their trading operations to a new global trading desk covering racing around the world.
On the MTS deal, Tom Waterhouse said: “We aim to offer pricing and trading on more than 250,000 races per year, which will be competitive with racing book operators around the world. Giving operators comfort so they can offer racing without having to manage the risk is, we believe, attractive to new and emerging markets like the United States.”
Todd Buckingham said: “We believe this product is an enticing solution because it is practical and seamless for global wagering operators – big and small. For BetMakers it fits with our strategy of consolidating the position in the Australian market while taking advantage of our tech-wagering opportunities that are rapidly presenting internationally, especially in the US wagering market.”
The Company believes the combined deals are likely to have a material positive financial impact on the business, particularly from FY21.
The Company has made a considered decision to invest additional resources into its technology and team, including with respect to the opportunities with the Waterhouse Group and other opportunities which have presented in the North American market and this will have a negative impact on the previous guidance provided in respect of EBITDA for FY20.
Given the early stage nature of the opportunities to be pursued, the Board does not consider there to be a reasonable basis to forecast the EBITDA for FY20. However, despite the additional investment, the Company still expects to return a positive EBITDA and be cash flow positive for FY20. The Company is well funded with a closing cash balance of $2.7mil for December 31st.
The Company reconfirms its revenue guidance for FY20 of $10million and expects to finish FY20 with a materially higher annualised run rate.
“We strongly believe the opportunities for future growth justify our decision to make this investment now and we are looking forward to updating the market on other growth opportunities as they materialise,” Mr Buckingham said.
About Betmakers Technology Group Ltd
Betmakers Technology Group Ltd (ASX:BET) (FRA:T07) is an ASX-listed holding company and a global provider of online wagering products and services to both wholesale and retail markets through its various wholly owned subsidiaries. The Company operates a retail wagering business, offering consumers wagering, fantasy tournament and content products and services.