BET Ann: Q3 FY23 QUARTERLY ACTIVITIES REPORT - 28th Apr 2023, 4:27pm

[annb0t]

BET Ann: Q3 FY23 QUARTERLY ACTIVITIES REPORT
Price Sensitive: Y
Date: 28th Apr 2023, 4:27pm

>>> Read announcement: Google: BET Market Announcements

 

[Ibetfixed]

Reg … are you still holding? Seems like it is going to be a tough road ahead .

 

[MICHAEL]

Thanks Reg, good to know you thoughts following the Q3 report and webinar this morning.

I concur with your view.

Interested to know your thoughts on the Betr situation?

Given that the deal was signed 12 months ago, reports of Betr's two attempts to purchase the Australian assets of Pointsbet, variation to their ownership and the effect of the 100 to 1 promotions, which may have an impact on their contribution to Betmakers for the next two quarters?

 

[Ibetfixed]

Yep, still here…and holding more……….it is a tough hold for many investors, but for me, as soon as Davey stepped in I felt he will right this ship. I am shitty about the Todd & $15M payment to Tripp and keep my options open on the issue.

I see a lot of complaints on HC about the quarterly investor presentation ie how short it was and no questions taken!…..I am ok with it, I listened to every word Davey said and was comfortable with the direct message portrayed………..I have seen employees on linkedin promoting that they are starting new jobs with other companies…….therefore payout costs will still keep salaries elevated.

We need to stop focusing on FO’s as the rest of the world is not as advanced or willing to change from the normal parimutuel betting, this is why BET are focusing on the world pool and commingling, the 1ST announcement was huge, as this breaks down the barriers with one of the biggest opponents to FO’s and shows them that we are here to work with all stake holders.

Davey said cashflow positive by quarter 4 and they will provide more details of progress……I believe he has the experience and skills to achieve this…..Jake is a token CEO.

Good to see that you are still a believer, Reg. I have also been increasing my position … averaging down has certainly not required any trading skill at all.. ha ha .

The BetR situation is what worries me the most … BETs tech doesn’t seem to be able to produce an app that compares to the likes of Ladbrokes/Sportsbet …. How hard can it be to replicate a robust/user friendly betting app?? Or am I missing something??

The deal involving issuing Tripp his performance shares ( even ignoring the $15mill payment) seems all a bit odd .. who was the third party that deemed that the BetR deal qualified as a deal that added more than 10% to BETs annual revenue ??
You would have thought that Tripp should have had to wait for 12 months to get issued the performance shares ie post BetR adding more than 10% to the annual revenue… especially considering that the revenue that BET is going to generate from BetR is linked to turn over .. which is unknown at the time the deal was struck .

If we say that BETs revenue was around $80mill annually when the BetR deal was announced .. than are BET going to receive the minimum of $8mill from BetR in the first 12 months???
BET certainly didn’t want to address the question about the BetR revenue that has been received in the last quarter … and considering that this is BETs first full service customer and BET indicated a potential of up to $300mill to be earned over the 10 year contract ..then I think shareholders deserve an update as it has been approx 6 months since the deal has been signed . Whether the update is good or bad .. it should be provided.

 

[Lattelarry]

Yep, still here…and holding more……….it is a tough hold for many investors, but for me, as soon as Davey stepped in I felt he will right this ship. I am shitty about the Todd & $15M payment to Tripp and keep my options open on the issue.

The whole Tripp deal was shitty - they should have had a clause in it that the party had to be new and not related to anyone involved with BET. It's ridiculous that Davey let it go through when of course he was going to use BET for his new company, when he's the biggest shareholder in BET.

That has also cost him far more than the 15m payment - it destroyed BETs reputation and Bucko threw his away with it for his mate.

I'm guessing it knocked off $0.5 from the SP and on his 100m shares it has cost him $50m of paper gains.

 

[Ibetfixed]

….as far as Betr goes, bank on the minimum revenue under the agreement….only because it will help you sleep at nights!

I don’t think the app is bad…but it needs vision and other areas of the Betmakers business…..the rollout was rushed and the lack of customer support killed the grand opening…….the 100 -1 bet offer was the greatest promo in history ( I still have Boston Celtics & the Penrith Panthers in play….I won on Gold Trip in the Cup, and the 20-1 on Anamoe, I lost on Brazil in the WC).

I treat Betr as another one of our Managed Trading Services client……time will tell but the waters have been muddied thanks to Todd and Tripp……..I think Davey likes his water crystal clear.

Thanks Reg .. remind me of what the minimum revenue pa that the BetR deal contributes ?? Ie is it more than $8mill pa??Cheers

 

[Ibetfixed]

around $8M is approx the the lower end of the agreement……it is based on net revenue, so the losses on the 100-1 will effect it…….but how many of those 100-1 bets loss Vs those that won…I don’t know the answer to that

So revenue not based on turnover but profit ??

 

[MICHAEL]

Interesting article just published online in the AFR.
'Betr hangs up the for-sale sign, Barrenjoey hired"

 

[Lattelarry]

Interesting article just published online in the AFR.
'Betr hangs up the for-sale sign, Barrenjoey hired"

Quite a poor effort from Betr - seems they didn't really work out their costs properly upfront and it probably didn't help that News just had to pay Dominion such a huge amount.

I don't get how Tripp could bring a deal from a company that he was chairman of. From Betr's perspective it seems like corruption to have your chairman do a deal that he signs the company up to a long term contract in return for a massive kick back to him personally. I wonder if News were pissed about this too.

 

[Uraniborg]

Quite a poor effort from Betr - seems they didn't really work out their costs properly upfront and it probably didn't help that News just had to pay Dominion such a huge amount.

I don't get how Tripp could bring a deal from a company that he was chairman of. From Betr's perspective it seems like corruption to have your chairman do a deal that he signs the company up to a long term contract in return for a massive kick back to him personally. I wonder if News were pissed about this too.

I guess it all depends on the terms he got from BET. Maybe he reassured the Murdochs (and Davey), that Betr got the better end of the stick in the deal that he agreed with Buckhunter? Maybe they all shared in some of the kickback action? Who knows?

However, surely the profitability of the betr/BET deal will one day be revealed?

 

[Uraniborg]

I guess it all depends on the terms he got from BET. Maybe he reassured the Murdochs (and Davey), that Betr got the better end of the stick in the deal that he agreed with Buckhunter? Maybe they all shared in some of the kickback action? Who knows?

However, surely the profitability of the betr/BET deal will one day be revealed?

...but it's probably safe to assume that anything close to $30Mp.a. revenue from betr is very unlikely.

 

[Lattelarry]

...but it's probably safe to assume that anything close to $30Mp.a. revenue from betr is very unlikely.

I think that was always very unlikely in the first few years but given the earning cap was over 10 years it would have been possible to make it up in later years if business was booming. (thats how it looked to me - but who knows if there were annual limits as well).

 

[RHINO]

I think that was always very unlikely in the first few years but given the earning cap was over 10 years it would have been possible to make it up in later years if business was booming. (thats how it looked to me - but who knows if there were annual limits as well).

Back in January, Matt Davey announced he was selling out of Betr to focus on his new role with Bet.
With today's media articles about Betr being shopped around and the SMH article that Betr may go under,you can see getting out was a smart move.
We can't cry over spilt milk with past deals,shonky or just bad business, so we must look ahead.
If we had bugger all cash in bank,heaps of debt,and a poor revenue stream,I'd be looking at my Bet holding as a tax write off.
That is not the case,as we have a sizeable cash holding,no debt,and a very good revenue stream.
We need to go hard on the cost cutting to bring us back to positive cash flow,but not at the expense of product development and pursuing new markets.
I feel Davey is the best man for this.
I feel he is trimming this business to wrap it up in a nice bow and sell it.
I hope he can get the price back up to levels that most of us can swallow the loss that comes with it.
This company owes me .70c so,a long way to go but I'm looking at it from a new beginning standpoint.
A company with all the positives as mentioned above,selling at around .16c is a good buy .
Look at it as Bet2 if you like.
We will make money on Bet2,not Bet.

 

[Uraniborg]

I think that was always very unlikely in the first few years but given the earning cap was over 10 years it would have been possible to make it up in later years if business was booming. (thats how it looked to me - but who knows if there were annual limits as well).

I'm confident the $8p.a. minimum and $30Mp.a. maximum are applied annually. There's no opportunity to exceed the $30Mp.a. cap in later years.

 

[Uraniborg]

Back in January, Matt Davey announced he was selling out of Betr to focus on his new role with Bet.
With today's media articles about Betr being shopped around and the SMH article that Betr may go under,you can see getting out was a smart move.
We can't cry over spilt milk with past deals,shonky or just bad business, so we must look ahead.
If we had bugger all cash in bank,heaps of debt,and a poor revenue stream,I'd be looking at my Bet holding as a tax write off.
That is not the case,as we have a sizeable cash holding,no debt,and a very good revenue stream.
We need to go hard on the cost cutting to bring us back to positive cash flow,but not at the expense of product development and pursuing new markets.
I feel Davey is the best man for this.
I feel he is trimming this business to wrap it up in a nice bow and sell it.
I hope he can get the price back up to levels that most of us can swallow the loss that comes with it.
This company owes me .70c so,a long way to go but I'm looking at it from a new beginning standpoint.
A company with all the positives as mentioned above,selling at around .16c is a good buy .
Look at it as Bet2 if you like.
We will make money on Bet2,not Bet.

Do Todd Buckingham and Nick Chan work at Bet2?

 

[Lattelarry]

I'm confident the $8p.a. minimum and $30Mp.a. maximum are applied annually. There's no opportunity to exceed the $30Mp.a. cap in later years.

Are you sure - I don't ever remember reading that - but perhaps I missed it?

I would hope but not expect (because I have very low expectations of BET) Davey will claw back everything paid to Tripp if Betr don't pay the $8m/yr.

 

[Uraniborg]

Are you sure - I don't ever remember reading that - but perhaps I missed it?

I would hope but not expect (because I have very low expectations of BET) Davey will claw back everything paid to Tripp if Betr don't pay the $8m/yr.

Apologies Larry, the max revenue cap is not a constant. It does increase over time as you suggested (as described below). The minimum revenue floor is constant over the contract's life (excluding CPI). The max revenue cap was later adjusted with BET's $2.5 contribution to betr's purchase of TexBet, but I'd argue that the max limit doesn't matter if it is never close to being hit.

 

[RHINO]

Do Todd Buckingham and Nick Chan work at Bet2?

Haha, I think They are on sharpening pencils duty!
Back to my point though, if you want to recoup anything above 50c or so , I am not so sure.
What I am doing is buying at these levels hoping to double or triple my money on Bet2 before Davey sells it

 

[Uraniborg]

Haha, I think They are on sharpening pencils duty!
Back to my point though, if you want to recoup anything above 50c or so , I am not so sure.
What I am doing is buying at these levels hoping to double or triple my money on Bet2 before Davey sells it

I admire your optimism, but I've decided to cut my (significant) losses until I hear good news.

The latest update was entirely uninspiring. I also noticed the difference in how Davey spoke in his most recent update compared to the Q2 update. In the Q2 update, his first update as Executive Chairman, he proclaimed the company was "in rude health". However, he seemed to lack a similar level of enthusiasm and optimism this time.

 

[RHINO]

I keep referring to 2 things:
Money in the bank-Over $50million
P.A, Revenue of $100 million .
Unless I missed something, I don't think the BETR deal has added anything to the revenue dollars..
We need to wash the redundancy payments off the books and cut the fat, once that's done we should be cash flow positive.
The current stated strategy will be a good thing for us. Do what we do best.
Lets wait for Q4 results before getting out the lifeboats.