Future Of CanBet Sportsbook In Doubt

Wednesday September 03, 2008

Only one year after receiving takeover approaches, Melbourne-based International All Sports Limited has posted a pre-tax loss for the year of $3.14 million due to the performance of its overseas businesses.

Despite its Australian-facing IASBet Sportsbook unit reporting a pre-tax profit for the previous twelve months, the group's offshore ventures were in the red to the tune of $6.65 million. The major component of IAS foreign business, its Canbet Sportsbook, Canbet Poker and Canbet Casino, incurred a negative pre-tax result of $6.41 million.

"This result is deemed unacceptable by the IAS board and the group's overseas business units are being reviewed," read a statement from IAS.

"The results recorded by the international business units have negated the excellent result achieved by the Australian business."

Australian horse, harness and greyhound racing comprise nearly 80 percent of the turnover for IASBet Sportsbook and it reported earnings before tax for the year of $10.29 million. This is up on the previous year's pre-tax result of $6.55 million while wagering increased just over 21 percent to $438.27 million. In addition, revenues from IASBet Sportsbook for the financial year increased over 25 percent to $28.19 million with a win rate of 6.43 percent.

"A win rate of 6.43 percent is an excellent result when compared to competitors and is attributable to a successful marketing drive for online recreational customers in conjunction with the promotion of higher yielding betting products," read the statement.

However, IAS stated that its UK-licensed CanBet operation failed to generate an 'acceptable margin' of revenues due to software malfunctions, inexperience in product management and a new client database dominated by professional players and arbitrages resulting in no winning margin for the first half. In the second half, this margin only increased to one percent while the third quarter prospective win rate of three percent could not be maintained over the final quarter.

"This tardiness in moving out of a start-up phase mode is disturbing," read the statement.