Sportingbet To Make First Profit

by Jason Gorringe, Tax-News.com

30 January 2002

Alderney-based and licensed Sportingbet.com reported a third-quarter pre-tax profit of UKP 4.8m, against a loss of UKP200,000 in the same period last year. The firm, which claims to be the world's largest online gambling operator and is listed on London Alternative Investment Market (AIM), expects to become one of the first quoted UK online businesses to report a full-year pre-tax profit. The final quarter, traditionally the busiest for Sportingbet, also saw a sharp rise in sales from UKP103.7m to UKP352.5m. Customer numbers grew 56,285 quarter-on-quarter to 488,457.

Nigel Payne, Sportingbet's chief executive, said: "A few companies are proving that the internet can work as a business model." He said that the company's US operations, which account for the bulk of revenues, had performed well. Dresdner Kleinwort Wasserstein, the house broker, is forecasting full-year pre-tax profit of UKP7.5m, giving a prospective p/e of just over 18.

Sportingbet's rapid growth is at least partly due to acquisitions: July saw the purchase of SportsBook, operates under an Antiguan gambling licence and with nearly 350,000 customer accounts, 92% of them American; in May 2000 the firm acquired Betmaker, based in Costa Rica and now rebranded as SportingbetUSA.com. It has also expanded its presence in the Asia-Pacific region with an GBP11.5m ($16m) deal to buy The Number One Betting Shop, Australia's largest private bookmaker.

The abolition of UK betting tax has not tempted Sportingbet to return to the UK from offshore. Chairman Mark Blandford said: "There's no chance of us coming back onshore. We'd have to pay VAT, the gross betting tax and higher corporation tax."

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