UK retail and wholesale sportsbook brokerage, Betbrokers plc is heading into the home stretch of the 2008 year with an injured gait.
In April of 2008, the European sports betting giant went public with BetbrokersBinaries.com, a gaming site specializing in business betting. At BetbrokersBinaries.com players would have the opportunity to wager on stock prices, exchange rates and other business related action.
The CEO and Chairman of Betbrokers plc, Wayne Lochner offered at the time a vociferous optimism over the launch of BetbrokersBinaries.com:
We are very excited to be the first in the UK to have acquired the use of this powerful, cutting-edge technology. My vision has always been to transfer financial trading know-how to the betting arena. This technology will help us to achieve our long term strategy of providing a holistic betting model for the rapidly globalizing betting industry.
Now just 4 months later, Betbrokers is facing total liquidation and has already been placed into Administration as of August 22th, 2008.
Apparently the problem is not a lack of business. Coupling its cutting edge venture into business betting and a boom in the sports betting industry due to the Summer Olympics, Betbrokers has been facing more potential bettors than ever before in its history. The problem is a plunge in available funds to the betting house resulting in a more than 68% drop in average bet value.
In May of 2007, the average bet placed with Betbrokers plc in one of its thousands of international sportsbooks was £1,370.57. Following May of 2007, a major blow came to the conglomerate’s House fund from an as-of-yet undisclosed source. This predicated a fire-sale of the stock traded as BETB on the London Stock Exchange resulting in a 95% devaluation of Betbrokers shares over the next year.
In May of 2008, the average bet placed with Betbrokers plc was £424.28 – a loss of nearly 70% from the previous year.
Despite an announced 2007 loss of £2.74 million, a hemorrhaging stock price of 1.25 pence and a perilously emptied company fund, CEO Lochner issued a sterling review of the year in May of 2008:
I am pleased with the progress the Group has made during the period. We have further strengthened our position in our core voice brokerage service, and expanded into a number of other exciting areas including the creation of the Sport Risk Management platform and the acquisition of Winning Edge. We look forward to continuing our innovation, and to expanding the services that we can offer our clients.
On Tuesday, August 26, Betbrokers plc was re-listed on the AIM at 0.15 pence per share following an announcement of £2.8 million in 2008 revenues and a net loss of £21.44 million. While Betbroker’s losses are substantial, approximately £17.5 million in those losses are directly attributable to the purchase of Betbrokers Ltd by the newly formed, Betbrokers plc.
CEO Wayne Lochner from an August 26th announcement:
I am disappointed that the lack of available funding within the clearing house has had a detrimental effect on the company's UK performance for the period. The lack of funding in the clearing house and our inability to transact several large bets has resulted in a decrease in the average deal size. Importantly, other KPI's for the UK business, including the number of transactions and trading volumes, indicate Betbrokers continued progress.
No word yet on the potential effects of Betbroker’s woes on its Boss Media skin, St. Minver.
