United States getting the full attention of Sportech

United States getting the full attention of Sportech

Wednesday, April 25, 2018 Posted by Craig Davies
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Industry awaits PASPA decision

After enduring a difficult 2017 Sportech has outlined its US vision, with the firm believing it is poised to take advantage of a potential legalised sports betting market, following corporate restructuring, completion of a cost reduction programme and a comprehensive financial review.

Andrew Gaughan, CEO of Sportech, stated: “2017 was a year of material change for Sportech and 2018 is shaping up to be one of significant opportunity. Our recurring revenue in our Racing and Digital business is further being enhanced by additional sales opportunities and commingling along with the growth in our Bump 50-50 business.

“We have an enhanced platform for growth in our Venues division. Both should see benefit from a liberalisation of sports wagering in the US.”

Sportech, who sold the Football Pools last year, announced the sale of its Sportech Racing BV division for €3.25m to RBP Luxembourg, a short time after it terminated its formal sales process earlier this year.

The international betting technology firm showed revenues of £66.2m in its FY2017 results, two percent lower than 2016 in constant currency, and accounted for by its Racing and Digital and Venues divisions.

With adjusted EBITDA for the period at £6.7m, down from the previous years £8.5m, Sportech also revealed its board is to consider switching its reporting currency to the US Dollar, with it’s earnings now 80% denominated in the currency, as opposed to GBP 10%, Euro’s 8%, and CAD 2%.

In his statement Richard McGuire, Non-Executive Chairman, also revealed its “UK-based executive management team was not an appropriate structure,” as well as a cost reduction streamlining of its UK cost base.

Before speaking on the firms standing, with regards to the potential of the US Supreme Court repealing the Professional and Amateur Sports Protection Act (PASPA): “The possibility of the US market moving towards a broader regulation of sports gaming continues at pace with a number of states preparing to enact legislation if the US Supreme Court permits.

“Furthermore, the governing bodies of certain significant US sports have lobbied hard for an opening-up of legislation.

“Through the Group’s existing regulatory, commercial and customer network, the Board believe there are significant opportunities to leverage these relationships and as a result of this, significant time has been invested in assessing the optimal platform for Sportech’s B2C and B2B businesses to capitalise on this potential momentous change.

“The Board anticipates announcing the launch of a Sportsbook utilising a reputable third-party vendor in H1-2018.”

Totally Gaming says: A huge chunk of industry talk is revolved around the US sports betting market, and what any of the potential decisions could mean for the future of the market within the nation. Sportech already has a presence within the United States, and will be hoping to be perfectly poised to strike when the final decision from the Supreme Court is finally released.

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