Waterhouse VC has continued its push into the supply side of the wagering industry after the acquisition of 2.5 per cent of Racing and Sports, with options to secure another 12.5 per cent.
The strategic growth partnership between the venture capital company, whose Managing Director is former bookmaker Tom Waterhouse, and the publicly listed racing data, content and technology business which is helmed by Stephen Crispe, is designed to help the latter accelerate its growth.
Crispe, whose father Gary founded the company in 1998, said the opportunity was an ideal one as Racing and Sports looked to build on its profile as a key supplier of premium data and information to consumers and the broader wagering industry,
"Racing and Sports has experienced unprecedented growth over the past three years since we undertook the IPO,” he said.
“The business has evolved significantly and is extremely well placed to support the global racing industry in both established and emerging markets.”
Racing And Sports recorded revenue of $18.9 million in FY24, an increase of 38 per cent. Among its new customers was global wagering powerhouse Stake.com, which launched a racing offering off the back of its partnership, in June.
The agreement with Waterhouse VC is a latest feather in the cap for the Canberra-based company, which has grown its share price from a low of 42 cents in February 2023 to $1.48, giving it a market capitalisation of over $66 million.
“We further believe that the relationship between RAS and Waterhouse VC will be a strong partnership and seek to unlock value across many opportunities around the globe. We consider the deal structure to represent a fair way for both parties to realise this value,” Crispe said.
“The strong Waterhouse brand combined with the power of Racing and Sports data, technology and digital capabilities is expected to unlock new opportunities across all parts of the business, supported by new commercial models and complimentary verticals.”
Waterhouse VC, which was set-up in 2019, has targeted growth through acquisitions of wagering technology providers, building the fund up by over 100 per cent in that time.
Warwick Barr
Speaking to Ausbiz, Tom Waterhouse said the investment fitted into his venture capital company’s strategy for acquisition.
“Waterhouse VC is focused on the technology layer of the gambling space, so we don't invest in any operators, and we love finding technology suppliers that have something unique, something proprietary,” he said.
“Racing and Sports, led by Stephen Crispe and Gary Crispe, they've been in the industry for over 25 years, and what they've been able to create, they've got a unique data set in racing.
“But they've also got the ability to take that data set to not only sell the data to keen avid punters or racing bodies or bookmakers that want to take that racing data, but they also have a platform, so we're very interested in the business because they've got unique data, they've got deep understanding and a great leadership team.”
Waterhouse, the son of Rob Waterhouse and grandson of Bill Waterhouse, said he had plenty of faith in racing as a gambling medium, despite the current challenges in the Australian market, where it was impacting the profitability of the major wagering service providers.
“We're a firm believer that racing plays a large part in the global gambling space. Racing is a terrific gambling product, it's much higher margin than sport, it's on all the time, and there's plenty of places that don't allow online gaming,” he said.
“So you need constant product, and NFL, NBA, baseball, they don't make up constant product, and we think racing is, it's a mature product, but still has a lot of growth left in it, and also especially the largest operators in the world at the moment in the crypto space, they don't offer racing, or a lot of them don't offer racing, so we think Racing And Sports has a very unique role to play.”
He said Waterhouse VC remained focused on industry suppliers, rather than wagering operators, which were more likely to be adversely impacted by regulation and taxation.
“We think that operators are going through a phase of increasing regulation, taxation, restrictions, it's just becoming tighter in that environment,” he said.
“Twenty years ago, all the money was made by the operators. We believe in a trillion-dollar market, the opportunity where to make money is focusing on the supplier side.”
“The operators are facing a tough time in terms of restrictions and a tough time in profitability, but we focus on the supplier side, and we think that's the right way to invest in the market.”
