Sportech Looks to Profit From Connecticut Online Horse Racing

Written by:
Reuters
Published on:
Mar/05/2014
Sportech Looks to Profit From Connecticut Online Horse Racing

(Reuters) - Gambling company Sportech is aiming to expand further in the United States by offering Internet betting on horse racing in Connecticut and opening sports bars there and in California.

Although based in Britain and a relatively small player in the sector, the company has been expanding in America where gambling legislation has been liberalised in a number of states.

"We remain well positioned for future growth in the U.S. market and, with the strong cash flows from our Football Pools business, we have entered 2014 with confidence," Chief Executive Ian Penrose said on Wednesday.

The company reported EBITDA (earnings before interest, tax, depreciation and amortisation) of 26 million pounds ($43.35 million), at the top ends of forecasts, on revenues of 110 million.

More than 60 percent of revenues now come from U.S.-based operations, a major shift over the last four years. The "Football Pools" where gamblers try to pick score draws remains the main source of profit although numbers of Britons playing the 90-year-old game remain in decline.

Penrose said there would be some "heavy marketing spend" in the coming weeks to promote the new horse-racing website in Connecticut, a state of four million where Sportech has an exclusive licence.

Sportech has just opened a sports and betting bar in Connecticut and will launch a similar venue near to Los Angeles in the summer.

Sportech said the snowy winter in the eastern United States had hit its U.S. operations but it remained confident on its prospects for the year.

Shares edged 1.7 percent lower to 88.5p by 0937 GMT, valuing the small cap company at around 180 million pounds.

In Britain, Sportech is awaiting a definitive verdict on a 95 million pound claim for the repayment of VAT (sales tax) on a "Spot The Ball" game.

The UK tax authorities are appealing against an initial verdict in Sportech's favour and the case is scheduled to be heard in late April.

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