ASX-listed sports betting operator BlueBet reported revenue of AU$24.7m (PS13.8m/EUR15.6m/US$16.5m) in its half-year 2023 results, a decline of 5.1% year-on-year.
BlueBet attributes the drop in revenue to increased marketing investment and market shifts regarding sports.
Advertising and marketing expenses totalled $11.4m for six months. This was 67.5% more than H1 2022.
BlueBet CEO Bill Richmond stated that, despite the decline in revenue, the company had enjoyed success in Australia and made significant progress in the US during the six month period.
Richmond stated that BlueBet’s H1 performance was strong and that the team was focused on the strategy and providing excellent customer service in the face increased competition. We continue to grow our market share in Australia and are making strides in the US market entry.
BlueBet launched its ClutchBet brand in the US during its third-quarter results. Richmond states that the rollout of the brand continues.
He said that ClutchBet is still being introduced in the US. First bets were taken in Iowa in August, and we are moving towards a go-live in Colorado in March. “We have had strong early interest for our white-labelled sportsbook-as-a-solution B2B offer in the US, with discussions underway with multiple potential B2B partners.”
Results for the half-year
The half-year turnover was $280.5m. This is 6.1% more than the previous year.
Payouts, which are gross of goods-and-services tax (GST), totaled $36.2m for six months. This is largely consistent with the AU$36.4m generated during the half-year 2022.
The revenue was $27.1m due to promotions that totaled $9.0m. This is before GST.
After GST at $2.4m, revenue reached $24.7m.
The cost of sales was $11.6m, which is a steady figure year-on-year. This resulted in a net profit of $13.0m.
EBITDA (earnings before interest tax, depreciation, and amortization) suffered a loss in the quarter of $10.5 million. The quarter’s highest EBITDA expenses (which include IT and administration), was for advertising and marketing.
The EBITDA was split into $4.6m for Australian operations, $3.8m for US operations, and $2.1m for corporate EBITDA.
After amortisation and depreciation expense of $889,000, and finance costs totalling AU$22,000 the profit before income tax expense was $11.3m.
The six-month total loss was AU$9.8m. This is an exponentially higher increase than the AU$9.1m annualized.
Operation in Australia
BlueBet’s Australia operations generated $27.2m in total revenue, which was 4.9% less than the previous year.
The turnover was $279.3 million, with almost all of it coming from operations in Australia. At $143.5m, wagers on thoroughbred racing accounted for more than half. Greyhound racing was second at $70.1m. The turnover for sports was $41.2m, and harness racing generated $24.5m.
The majority of total revenue came from iPhone Play, which was $157.9m, up 6.5%
BlueBet stated that its “strong performance” was due to a rise in active customers over the past half-year. The number of active customers reached 59,632 at the end of the FY23 second quarter, 32.3% more than Q2 2022.
BlueBet’s second half of 2023 will see marketing take precedence. The company intends to increase its investment in marketing technology like Salesforce and Other Levels.
BlueBet also forecasted that its Australian business would return to cashflow positive in the second half. The net cash flow from total investments was $6.3 million for H1 2023.
BlueBet stated that it plans to go live in Colorado, and will continue to focus on the licensing process for Louisiana as well as Indiana.