Aussie Internet Sports Book Marginbet Reports Disappointing Float

19 September 2007

Online sports betting group Marginbet Ltd. reported a disappointing floatation on the Australian Stock Exchange, closing down A$0.03, or 15 percent, on the A$0.20 initial offering at A$0.17.

The company's A$2 million IPO was marketed exclusively to members of the recently established investment services Web site,

According to Australian daily The Age, based on its closing share price, Marginbet has a market capitalization of roughly A$8.72 million and compares with its pro forma market capitalization of A$10.3 million, based on the A$0.20 offer price.

Chief Executive Stephen Hobbs observed that there are significant opportunities for growth in the I-gaming space, particularly internationally.

"In the coming year, we plan to introduce a new sports-betting medium known as spread betting or index betting," said Hobbs. "This type of betting is very popular in the United Kingdom and Europe."

Through its Portlandbet Pty Ltd. subsidiary, Marginbet offers international fixed-odds betting services, as well Internet, telephone sports and horserace bookmaking services.

Hobbes told the Age on Wednesday that that company was not overly concerned with the effect that the recent outbreak of equine influenza would have on its business, as turnover from horseracing comprised a small percentage (2.5 percent) of its total betting turnover.

Marginbet Director David Gray said that although the company is not yet profitable, it is "seeking to grow the active clients and start achieving the theoretical win ratio that sports betting businesses bank on."

Marginbet was licensed by the ACT Racing and Gaming Commission to begin taking wagers in August 2006, while Portlandbet began business in 2005.