BetCorp pulls out of US-facing Telephone Sports Betting

Antigua-based sports betting, online casino and poker group, BetCorp, has announced its interim results for the six-month period to 1st July 2006 included in which is a statement announcing its intention to withdraw from US-facing telephone sports betting in the light of the recent legal developments affecting one of its rivals, BetOnSports plc.

The BetOnSports development proved to be particularly unfortunate in timing as, at around the same time as the BetOnSports saga was unfolding, BetCorp completed a major deal to acquire a telephone and online US-facing sports-betting and casino business called "Oasis" for nearly $10,000,000.

Oasis is the latest sportsbook and gaming business acquired by the group, having previously added Sinsational Intertainment Inc in 2005 and BetWWTS.com in 2003, the latter being a North American focussed operator of online sportsbooks.

The company has now stated:

"The Board, with the assistance of advisors with extensive experience of the US legal environment, is reviewing all aspects of the Group's operations relative to customers located in the USA, and taking steps to minimize legal risk associated with the US market to the maximum extent practical."

"As a result of this review process, the Board decided in July 2006 that the Group should no longer accept telephone bets from customers located in the USA. This initiative is likely to have an adverse effect on sports betting turnover but will be partially offset by personnel and telecommunication cost reductions and the migration of telephone activity to the internet. We anticipate that the overall effect on profitability will not be material."

The group's financial performance for the six months to 1st July 2006 included the following statistics:

- Total turnover - $468m (+ 36%)
- Gross revenue from players - $22m (+ 75%)
- Profit after tax - $4.6m (+ 146%)
- Sports betting margin - 6.72% (+ 63%)
- Active players - 27,281 (+ 33%)

The company states that the main contributor to the improved performance was the much improved trading margin on sports betting. An "excellent" first quarter yielded a sports margin of 8.33%. In the second quarter, the margin moved back towards long term expectation due, in part, to the greater proportion of baseball in the overall mix.

"Continued restrictions on 'wise' and knowledgeable players" had an impact on betting turnover but contributed to the achievement of a 6.72% margin for the first half, compared to 4.13% in the first half of 2005.

The company also believes that its "…current trading strategy is capable of delivering margins above historical norms. The acquisitions of Sinsational Intertainment in 2005 and Oasis in 2006 have introduced higher yielding recreational clients, which is contributing to these favourable trends…"

BetCorp currently has a joint stock market listing in London, UK (on the AIM market), and Australia (on the ASX), although it has received permission to de-list from the Australian Stock Exchange with effect from 31st October 2006.

Ed note: You can find the best American sports markets on BetWWTS.com where you can gain a 15% deposit bonus up to $500.

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