Webis hit by high annual losses
Sportsbook betinternet.com records £778,000 loss.
Online gaming group Webis Holdings has recorded significant losses this year due largely to betinternet’s underperforming sportsbook and tough economic conditions, the company announced in preliminary annual results this morning.
Its sports brand, betinternet, generated a turnover of £79.2m this year compared to £107.9m in 2009, recording a pre-tax loss of £778,000 compared to last year’s loss of £41,000. In a statement the company said it had “suffered a number of setbacks” during the financial year, “largely related to the ongoing effects of the economic downturn”.
It said that the fixed-odds element of its sportsbook had “underperformed” with a reduction in gross margin due to a loss making affiliates’ referral scheme that has “since returned to profitability”, football betting being impacted by an “unusual lack of draws” during the early stages of the 2009/10 English Premiership season, while the margin generated by its horse racing offering, which accounts for a significant proportion of the sportsbook’s total turnover, remains highly volatile, it said. However, Webis said betinternet had enjoyed a “successful World Cup” and that the start of the new football season was showing “more favourable results” compared with the same period in 2009.
The company added that many of its high-roller casino and games players had “dropped away”, resulting in a “sizable reduction” in turnover and margin compared to last year. Its Real Time Gaming Casino has since been replaced which the company said would enable it to incorporate a poker game on the website for the first time before the year end. EWS, the group’s pari-mutuel platform, generated an increase in turnover to £35m compared to £32.3m in 2009.
“As a result of these issues and the increased level of competition and regulation within this area, the board has decided to review its sportsbook strategy,” the statement read. “This review is currently ongoing and, once completed, the board will provide shareholders with an update,” it added.
Denham Eke, chairman of Webis Holdings, said: “Overall, it has been a difficult year for the group, with numerous challenges. However, the majority of these issues have been resolved and the future of European Wagering Services (EWS) has gained a clear direction as a result of our US acquisition. We are now committed to establishing a clear strategy for the sportsbook and the board is confident of a successful year ahead”.
The largest area of growth came from the EWS website.Webis recently secured a US pari-mutuel hub operating license with the North Dakota Racing Commission. In today’s statement the company said this would “enhance the opportunity to secure further US racetrack content in the near future and provide the business with greater credibility in its markets”.
The group’s bankers have recently withdrawn payment processing services, however the company today said it had implemented a temporary payment solution pending the development of a permanent solution for EWS and betinternet with alternative providers.In the case of EWS, it said the acquisition of a US license would “greatly assist” in stabilising payment solutions for the business in the near future. “Once we have established new payment methods, we intend to implement a development and marketing strategy in the US, which is currently in the advanced planning stage.”