IASbet Profit Downgrade
Australian sports betting firm IASbet Ltd. (IAS.AX) announced a profit downgrade last week, informing shareholders that the company would record a loss for the first half of the fiscal year. The company recorded net profit of $6 million in 2001-02 and $5 million in 2002-03, but expects to record less than $2 million the first half of 2003-04. Executive chairman and founder Mark Read claimed the poor performance was due its offering the best odds on horse-racing to compete with Betfair, which has been luring away much business from the Australian sports books.
One shareholder suggested that the loss was a result of losing its largest customer, former Commonwealth Bank manager Kim Faithful, who had stolen $19 million in the last few years and gambled most of it away to IASbet. Denying the allegations, Read claimed that Faithful accounted for only a small portion of the IASbet's turnover, and said that the company would return to profit in the next half. IASbet's share price dropped 23 cents to close at 90 cents on the news, constituting a 20 percent dip and an 18-month low.
Wembley Considers Bids
Penn National Gaming Inc. (PENN), a U.S. casino and gaming facilities operator with a market value of around $950 million, announced Wednesday that it is discussing a potential acquisition of U.K. greyhound racing and gaming group Wembley plc (WMY.L), which has a market capitalization of $312 million.
Wembley verified that it was discussing deals not just with Penn, but with other buyers as well. "Wembley announces that it has received approaches from a number of parties expressing interest in acquiring some or all of the assets of the company, in particular its Lincoln Park operation in Rhode Island, USA," Penn National stated in a press release. "Whilst Wembley remains committed to operating as an independent company, it is exploring whether these approaches will result in attractive proposals being made."
Wembley hasn't had much financial luck lately. Subsidiary Lincoln Park and its CEO Dan Bucci, as well as Wembley CEO Nigel Potter, are facing grand jury indictments on counts of bribery. Also, Wembley this month was unable to establish a gambling complex in Colorado, a loss that will cost the company $7.2 million.
Since news of the possible buyout, Shares in Wembley have risen 43p to close at 570p per share.
ukbetting to Raise £11 Million
ukbetting plc (UKB.L) announced last week that it intended to raise £11 million through the placing of 26 million new ordinary shares at 45p per share. The funds are to be allocated toward new acquisitions, one of which is a proposed purchase of odds comparison service OddsChecker, for which ukbetting has bid £4.75 million. For the year ended June 30, 2003, Oddschecker achieved £0.4 million in pre-tax profits, £1.3 million in turnover and un-audited net assets of £0.5 million. Since August 2001, ukbetting has followed a business strategy of purchasing and consolidating a number of U.K. online gaming and sports content businesses. Last week the company announced it would soon begin offering broadband Internet service.
Stanley Performing Better
Stanley Leisure Organization plc (SLY.L), the victor of the Gambelli case, announced Friday a trade update to inform shareholders that good performances in betting and provincial casinos has led to improved trading since its annual general meeting on Sept. 10. Stanley says its LBOs have reached the goal of installing 1,000 machines and have received a significant uplift from fixed-odds betting terminals. And though the company's win margin at Crockfords casino has improved over the last two months, it has not been enough to balance the losses of the first few months of the year.
Stanley also announced Friday the opening of its Sky City Casino in Burmingham.
Stanley may also be looking to expand into other European states. The company recently ran an ad in a Greek newspaper, stating, "If you are thinking of launching or improving any kind of public or private betting business, the safest bet is to join forces with the winner of the Gambelli case."
Scientific Interest Acquisition Acquired
MacAndrews & Forbes Holdings Inc. has completed its acquisition of the entire interest in Scientific Games Corp. (SGMS) that had been held by Cirmatica Gaming, S.A., a subsidiary of Lottomatica S.p.A. in Italy. The interest, which is held in the form of Series A convertible preferred stock and Series B preferred stock, represents about 24 percent of the equity and voting power of Scientific Games. The interest was purchased for about $194 million. MacAndrews & Forbes will be able to nominate four members to the board of directors and will have the same voting and governance arrangements Cirmatica had.