NorthStar Gaming CEO Michael Moskowitz has praised the operator’s “very strong” growth during its first full year of operations, despite the Ontario-based business reporting a net loss of CA$25.5m (PS14.9m/EUR17.4m/US$18.6m).
The revenue for the year ending 31 December 2023 was $19.4m. It is a 240.4% increase from the $5.7m revenue in the year prior, when NorthStar was launched.
NorthStar launched its online casino and sportsbook in Ontario, Canada in May 2022. Baden Resources, a Canadian real estate company, took over the business shortly after.
NorthStar was only available in Ontario from October 20, 2023 until the service expanded to include all Canadian provinces and Territories. NorthStar’s revenue soared after the expansion.
Moskowitz claims that the rapid growth in Canadian customers was a major factor.
Moskowitz stated, “We achieved very strong growth during our first year in operation.” Revenue and customer numbers increased in each quarter.
The listing of shares on the stock exchange, the numerous innovations in our betting platforms, the strengthening of strategic alliances, and the implementation of an effective marketing strategy were all key accomplishments.
NorthStar hails Slapshot impact
Moskowitz mentions the Slapshot Media acquisition earlier this year. Slapshot provides marketing and operations management services for sports betting operators and igaming companies.
NorthStar, incidentally, used Slapshot to help support their expansion in Canada.
Moskowitz stated that the Slapshot acquisition allowed us to increase our market by establishing a First Nations managed services agreement.
Our financial performance and KPIs have begun to show the strength of our model. Our people and system are in place to allow for significant expansion.
As we grow the business we will be able to achieve operating leverage, as revenues continue to rise faster than costs.
Net loss widens despite revenue growth
The gaming revenues for 12 months totaled $18,9m. The expansion in Canada has helped to increase this figure by 231.6%. Both sports betting and the casino generate gaming revenue.
Managed services, or Slapshot, accounted for the remaining $465,247. The deal was not closed until the middle of the year so there are no comparables from year to year.
Costs were higher across the board, mostly due to expansion in more countries. The operator participant fees increased by 207.7%, to $4.0m. Service provider fees also more than doubled at $8.2m.
Operating expenses were up 58.7% on the previous year, at $33.8m. Marketing costs were $14.1m and only slightly higher than last year. General and administrative expenses increased by 63.8%, to $11.3m. Public listing costs accounted for $2.8m.
The net finance cost was $1.2 million, which means that the pre-tax loss in 2018 reached $25.5m. This is higher than 2023’s $20.2m. NorthStar, however, did not pay taxes in 2018, so the net loss for 2018 was $25.5m.
NorthStar and Playtech extend their partnership
This week Playtech announced a partnership with NorthStar Ontario, a subsidiary of NorthStar.
The agreement, signed in June of last year, aims at accelerating the NorthStar strategy for player acquisition in Ontario. Playtech Software contributed services worth $4.0m as part of the initial agreement.
Playtech Software is now providing similar marketing services to Ontario worth up $4,000m until the 31st October of this year. Playtech Software is reimbursed for and compensated a portion of the income from these marketing initiatives.
NorthStar also issued to Playtech a promissory loan of $3,0m, which is unsecured and bears interest. The note will have an interest rate of 8.0% annually and be payable at maturity in arrears.
