Australian-listed Betcorp broke a week of silence on Friday by announcing its appointment of a new chairman and two new board directors. The company also revealed that it will close its head office in Sydney, sell its Darwin-based Sportsbet subsidiary to its management and relocate to Antigua to concentrate on its core business, World Wide Telesports (WWTS).
Betcorp halted trading on Sept. 3 after three of its four directors resigned. The first to go was WWTS's CEO, Simon Noble, who left on Aug. 6. Betcorp Chairman John Priest and CEO Richard Barker both resigned later that month. The resignations, along with the company's poor performance in 2004, necessitated the suspension of trading.
Among the shareholders displeased with the group's performance was Bill Scott, who became Betcop's largest shareholder after the boardroom exodus. Scott, the founder of Antigua-based betting operation WWTS, sold his business to Betcorp in January 2003 in a reverse takeover.
Scott is a convicted racketeer and fugitive from the United States, so at the time of the merger, the Northern Territory Racing and Gaming Commission (NTRGC) inserted a strict stipulation into Darwin-based Sportsbet's licensing contract that he could never become the group's largest shareholder or take a lead role in controlling the company.
Betcorp on Friday announced the appointment of new directors and a new chairman as well as a new agenda.
Bill Graham, an existing independent director and experienced bookmaker, was named interim chairman.
Colin Walker, who previously worked with Sportingbet and Ladbrokes, was appointed chief executive. His goal is to return the company to profitability by accomplishing two objectives: improving bookmaking and gross margin to an excess of 3.5 percent in the long term, and reducing costs at WWTS to the levels experienced in 2003.
Stuart Doyle, who was WWTS's chief bookmaker during its record profit year in 2003, will return to that post. Doyle left the company in January of 2004, when management chose not to renew his contract. Both Doyle and Walker will fill the vacancies on the board of directors.
Betcorp said in a prepared statement, "The new board has a clear mandate to return the company to the levels of profitability it has historically enjoyed."
To that end, the board has already approved the closing of Betcorp's main office in Sydney, effective Dec. 31, 2004, and plans to transfer the relevant personnel from the head office to the operational divisions in Darwin and Antigua.
Betcorp also stated that it will likely unload Sportsbet, regardless of the status of its betting license.
According to the company's announcement on Friday, the board has determined that Sportsbet "has limited long-term strategic value to the Company's core operations. . . . The company was a significant loss maker in 2003, and is only marginal now. Its contribution to the group's results is immaterial, and in light of the recent negative press regarding the company's major shareholders, the ability of the company to satisfy the NTRGC's specific licensing conditions is questionable."
Betcorp resumed trading on Friday, and shares rose $0.5 to close at $0.17. It reached $0.21 on Monday.