Having completed its migration of customers to its betr brand, BlueBet will be purely an Australian-focused business after becoming the latest bookmaker to opt out of the American market.
Publicly listed BlueBet and betr underwent a merger in July, which resulted in its Australian brand consolidation under the betr brand, albeit on the BlueBet technology platform and under the BlueBet corporate structure.
The migration of betr’s previous customer base was completed on Wednesday.
It has now announced that after a strategic review commenced in April, it would step away from its US business, and would cease taking bets on its platforms within a few weeks, citing slower-than-expected regulation as a key reason.
“The US market has been challenging for all operators since Bluebet listed on the ASX,” BlueBet’s chief operating officer Bill Richmond told an earnings call.
“Slower-than-anticipated regulation, particularly in the iGaming space, has hampered market growth and hindered B2B deals, which we initially saw as the more attractive opportunity for BlueBet in the US market, where we capitalised on our technology.
“Unsurprisingly, the market has become increasingly competitive and concentrated, with consolidation and exits from smaller players having accelerated over the last 12 months.”
The board determined that the focus should be on the Australian business, where “it has a sustainable competitive advantage” via its technology platform, increased scale and experienced team.
The short-to-medium goal in Australia was to grow betr’s market share to over 10 per cent.
“We are excited about the opportunities ahead of us as a larger, stronger and better capitalised combined business,” Richmond said.
“We have a clear path to profitability through scaling and monetising the combined customer base and delivering and exceeding the $14 million in annualised cost synergies, as well as aggressively pursuing revenue synergy opportunities available to us.”
Bren O’Brien
BlueBet is not the first Australian business to strategically withdraw from the US market. Fellow ASX-listed bookmaker Pointsbet did the same last financial year, opting to focus on Australia and Canada.
The announcement came as the newly merged company put a line under the previous BlueBet standalone era by confirming its full 2023-24 financial results.
That business saw an increase in wagering turnover of 18 per cent to $633 million, while wagering revenue jumped to $64.9 million, a 19 per cent increase.
Bren O’Brien
Overall EBITDA saw a loss of $12.9 million, although the Australian business had a $3.3 million positive EBITDA result, the first since it listed on the ASX.
“In our final year as a standalone entity, BlueBet delivered another strong performance, with record turnover and net win in Australia as we continued to outperform the market,” BlueBet CEO Andrew Menz announced.
“We have swiftly integrated the two businesses, completing our rebrand and customer migration in only 59 days. This rapid execution has seen us realise the vast majority of the announced synergies and the company is extremely well positioned to capitalise on the upcoming footy finals and spring racing carnival.”
Betr is set to ramp up its generosity offerings during the next three months as it looks to incentivise customers to engage with its new platform.
It has already offered a welcome bonus to migrated customers and will offer “personal and targeted” generosities to customers over the spring.
“The next two months is really around getting that base, a customer base, back, betting with the business, which is what the welcome offers are likely to do,” chief financial officer Darren Holley said.
“And then the last two months is where you'll see the business start to return to more focus on profitability, and that's where we'll get that net margin back during that period.”
BlueBet’s stock price remained at 20 cents on Thursday, giving it a market capitalisation of $107 million.
