Youbet.com announces record Breeders' Cup handle

[Dante]

Youbet.com, Inc. the online wagering company and one of the largest providers of horse racing content in the U.S today announced record handle for the Breeders' Cup on October 25.


The Oregon-based company said its handle from the 20th Breeders' Cup, run at Santa Anita racetrack in California, rose 56 percent from the prior year's handle, and was 46 percent greater than Youbet's handle from the Kentucky Derby earlier this year.


'The evidence continues to grow that our superior content and flawless execution are a powerful combination for bettors. This year's Breeders' Cup was also the first major test of our new platform, which handled the day's record transactions with ease. In addition, our funding and member service operations performed beautifully, so we are confident that, for some time to come, our overall system can accommodate substantial increases in volume without further capital investment,' says Chuck Champion, Chairman and CEO of Youbet.


Members of Youbet.com have the ability to watch and, in most US states, have the ability to wager on virtually 100 percent of all major domestic horse racing content via Youbet.com's network.@@

 

[Chadster]

I wonder what the volume was

 

[TheGeneral+]

Online wagering company Youbet.com Inc. posted a net loss of $618,000 during the three months ended September 30, 2003, but that figure represented a 71% decrease from the $2.133-million loss the company posted during the same period last year.

"After 20 months of intensive work, it should be clear to our shareholders and competitors alike that we have completed the transition from restructuring to core profitability," Youbet.com Chairman Charles Champion said. "Youbet’s employees and management team have also brought us to a point where we are extremely well positioned for growth. We are concentrating as intensively on long-term shareholder value as we once did on survival."

Earnings before interest, taxes, depreciation, and amortization for the quarter were $703,482, which was a $1.436-million turnaround from last year when the company posted an EBITDA loss of $733,000. A handle increase of 56.5% from $46.341-million last year to $72.533-million this year helped increase net revenue 86% from $2.583-million last year to $4.804-million this year.

"We had an exceptionally solid quarter in virtually every respect," Champion said. "Our record growth in handle year over year is also impressive when compared to our extraordinary performance during the prior quarter this year. It appears that we have become the year-round Web site of choice for true horse racing enthusiasts."

Operating expenses for the quarter totaled $4.1-million, an increase of 24% versus last year, which Champion attributed to the company’s legal fees related to a dispute with Television Games Network.

Nine-month figures also improved with net loss decreasing by 62.5% from $7.6-million last year to $2.849-million this year. Handle nearly doubled from $112.97-million last year to $206.837-million this year, helping net revenue increase 102% from $6.59-million last year to $13.325-million this year.

www.thoroughbredtimes.com

 

[lester]

How can they handle 200 million a year and lose money? Sounds like the stockholders are getting scammed.

20% hold X 200 million = revenues of 40 milllion

what

a

joke

 

[Matt24]

Im a stockholder. Everything looks to be running great.

 

[lester]

Get out a calculator and do the math.

If they are handling 200 million they are winning 40 million. Where is the money going? Even with the absurd 4 million per quarter in operating expenses there is still 24 million a year missing.

 

[Matt24]

I dont know exactly all the figures. I know they have arrangements with tracks and there is also the ongoing dilemma with TVG. The money is not going into the officer's pockets or anything

 

[oldmantime]

They offer a very nice product for which I've never paid a monthly fee due to meeting the small amount they require to be wagered monthly.
They pay out by check or direct to your bank, which I use .
I've never had a problem with a clock as you know they are on a 1 minute or so delay. Screen shows a clock and horses loading. I have even bet with them going into the gate. However, these days with simulcasting, the odds change late into the race.

 

I used to love them back in 97-98 when everything was free. Do they still have the software to install on your PC or is it all through Youbet Express now? Customer Service with them was always top notch and I NEVER was at a loss for information. Just my .02

 

[oldmantime]

I have the software. But they are no longer giving it away or selling it for that matter. I think it is being phased out in favor of the EXpress Version. I prefer the CD, but only slightly. The Express version actually has more information as to the money in the pools than what is shown with the CD version. (Their official word is that they will continue to support the CD version, but I am doubtfull of that for the long term. It's really just a matter of getting used to the express.

 

[sponge]

Lester....before you spout off at the mouth...please do some research on the industry!

How do you come up with a 20% hold? Did you figure in the host track fee...the tote fee...the fee they pay for having the right to do it online....I bet their lucky to hold 8% of all bets.

20% is a mythical number....that bettors like to use.

Just for the record....state take out on the bigger tracks....NY, Cal, Fla, Kent. are the lowewst of all...and about 80% of the wqagering...is done at those tracks. (take out for wps bets in ny 17%) So that means....if the bet was taken at the track that the bet was intended for....they get 17%...if taken by an otb.....otb would be lucky to get 12%!

youbet has done an amazing job.

 

[lester]

amazing job at what losing money. If nothing else they are retarded. They can go offshore and hold 20%+ and not have to bribe the local governments for the pleasure of taking a bet.

 

[oldmantime]

But this way--They get to stay in the USA without going to Jail when returning!

 

Somebody's retarded but its not ubet.

First of all, ubet only has a shot at about 10% of handle.

Of that:

-Half of all hold generated by ladbrokes 40 tracks goes to Ladbrokes.

-Ubet also has a relationship with TVG which accounts for a majority of the rest of their tracks, and this agreement allows tvg 55% of all hold generated from their tracks, even higher than ladbrokes.

-Running and maintaining the hardware and software for the Oregon processing facility is expensive, as well as costs associated with the enriched handicapping content ubet provides.

Hope that wasn't too fast for you.

for you guys who own ubet stock:

The recent wrangling with tvg over control of the company has already effected earnings, and will until resolution. TVG is known to be litigious and have a lot at stake here, as their warrents to control 51% expire in may 2004.

The fight is on, annual meeting already injuncted.

TVG warrents' strike price is $2.50. For many reasons the price will hover around that number until May, or drop as investors continue to see the legal costs rise, and ubet control slip away.

Certainly, UBET will do all it can to keep the stock price under $2.50 until May.

 

[Matt24]

You think it is a bad stock to hold? Im in at $3, got robbed on commission on these cheap stocks, took me from 2.89 to 3. I think there is a lot of potential with UBET and that it will become profitable.

[This message was edited by Matt24 on October 31, 2003 at 05:26 PM.]

 

[TheGeneral+]

If by some crazy chance online gambling on sports would be totally blocked, then youbet would explode in profits.

 

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>You think it is a bad stock to hold? <HR></BLOCKQUOTE>

Depends on your time frame. As stated above there are a lot of problems between now and June '04, especially with any potential earnings being eaten up by legal fees.

No one is talking about twhere the great rise in revenue came from the last year, as if some majical turnaround occured, but the source is simple, Cal. opened their doors to online wagering, and that state has by far the biggest horse gamblers.

So the question is does that inflow of bettors start to level off?

Probably.

Are there other new sources of bettors to add to revenues?

Yes, but at a much slower pace than we've seen this last year.

It just doesn't look like there is much upside at this point.

There is no way the founder of UBET is going to give up control of his company without a major fight. He just pulled it from the fire this last year, and this has the makings of a death match with TVG.

I'll sit on the sidelines and watch.

 

[TheGeneral+]

Any horse bettor who likes to wager ponies even once per week, should buy into Youbet. Great setup for the serious and casual player.