Webis warns of margin reduction following customer dispute

Webis warns of margin reduction following customer dispute

Monday, October 22, 2018 Posted by News Team
Finance
Operator has refunded $10m of player funds to former B2B syndicate client

Webis Holdings has been forced to introduce a number of measures to streamline its US-facing advance deposit wagering business WatchandWager after the subsidiary lost a major betting syndicate as a customer. 

WatchandWager ceased offering wagering services to the syndicate, which cannot be named for confidentiality reasons, following a commercial dispute. It has since refunded all of the syndicate’s player balances, which total around $10m. 

While this is not expected to affect Webis’ upcoming financial results, due to be published next month, it is expected to reduce gross margin for the year ended May 2019 by around $0.8m. Following the refund of customer funds, Webis is left with around $3.1m in cash on hand. 

As a result Webis is implementing a number of strategic objectives to offset the loss of the syndicate as a customer. Key to this is securing new B2B clients for WatchandWager, with a number of new clients already signed up, and advanced discussions with others ongoing. 

The operator said that while this would not replace gross margin in the short-term, it would allow WatchandWager to diversify and expand its customer base. 

The onboarding of new clients will be complemented by WatchandWager securing new US state gaming licences. It is in the process of applying for licences in three new US states, Webis noted. 

The company will also develop and expand tis Cal Expo racetrack operation ahead of the new racing season starting in November 2018. For certain races prize funds will be increased, attracting more race participants, which in turn will increase the field size for the benefit of players. 

The operator will also look to establish new strategic partnerships and associations to enhance WatchandWager’s B2C offering, adding new content to its betting site and mobile app. 

Finally, Webis will work to position WatchandWager to take advantage of any sports betting legislation to pass in California. The operator noted that WatchandWager is already licensed with a regulated settlements process and a racetrack operator, making it likely to be approved to launch sports betting when permitted.

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