Our CEO, Richard McGuire, spoke to SBC Magazine for this month’s magazine. Read the article below on how we are about to enter the most challenging period in history, but how we remain well positioned for change and challenge in 2020.
Download the Sportech article here and read the entire magazine here.
Following the release of Sportech’s financial results for 2019, but also its coronavirus-related market update, Gambling Insider caught up with CFO Tom Hearne.
What’s the current breakdown of Sportech’s revenue, geographically and by sector?
The breakdown from an industry perspective is about half our revenue comes from what we call our racing and digital business; that is about £36m ($42.2m) last year – through the provision of tote services and digital betting services, as well as our Bump 50:50 revenue. And then about £28m of that business comes from our venues, through our exclusive pari-mutuel racing license in the state of Connecticut.
Geographically, at the moment it’s mostly US revenue. Most of our horseracing customers are in the US market; we also do business with lottery in the Dominican Republic and have our UK and European businesses. Our business is probably two thirds dominated by the US market.
Do you see this breakdown changing long term?
It varies somewhat on the nature of the business we’ll be able to grow into. One of the things we’re looking to expand is sports betting, which we wanted to do mainly through licenses in the state of Connecticut. The Connecticut legislator is currently reviewing sports betting legislation and the Government came out favourably about Sportech getting one of those licenses. Obviously, with everything that’s been going on, the legislative sessions have been halted completely.
Otherwise, we are looking to continue to expand our international capabilities and our digital offering. We’re looking to expand into the French market and we continue to look at how to expand in those kinds of markets. We’ll look at expansion in the US and Europe around tote customer and digital perspective. But really that’s around how to change their operational focus from the traditional betting terminal, to more of a better digital offering. We think that’s where the market will really continue to have opportunity.
It’s been stated the coronavirus pandemic is affecting all Sportech’s business segments. How much more could EBITDA forecasts be reduced by if sporting postponements last beyond June 2020?
As you can imagine, most of our businesses require the operation of either horseracing and/or sporting events, which have been significantly curtailed in the current environment. The one big traffic still going is from the Hong Kong Jockey Club, where we have generated significant revenue from. They are actually on the backend of the COVID-19 pandemic and starting to let people back in after having racing behind closed doors.
For us, one of the things we’ve done is put in place a war room type situation, for lack of a better term, where we sit down and assess things on a weekly basis. Most tracks are running behind closed doors and require customers to bet digitally. But, yes, obviously if this extends past June, we would continue to see revenue fall in that timeframe. We will eke out an available line of credit and assess which payments can come in to have enough available cash flow. So we’re getting there and working on every available opportunity.
Do you envisage Sportech’s share price increasing once the industry comes out the other side of the coronavirus pandemic? The market is obviously at a low now but Sportech’s share value had also fallen beforehand.
I don’t think you’d ever talk to a CEO or CFO who doesn’t want to increase the stock price. But I think the work done in 2019 and restructuring the business a bit, all the work we’re doing from a technology perspective, is showing people we can improve operating cash flow. Over time, we are making the business a better and more focused business. A business that is less industrial and more digital. And I think if we can do those things, investors will be pleased with what we’ve been able to put together.
We’re moving our business into the 21st century and if we do that well, I’d hope we’re rewarded for that. I think the stock price today reflects the uncertainty about our ability to go through that process. So the more and more we can do that and demonstrate we’re successful at doing that, investors will be happy with that, especially if we can take those revenue capabilities and convert more of that revenue to cash.
How has the transition been since Richard McGuire’s appointment as CEO in July 2019?
As part of that, Richard obviously comes from a financial background. You aim to put together a good team on the executive side – people who have a deep knowledge of operation. I have a lot of operational background and so do others in the team. We try to make sure we work together as a team on all the operational activities; Richard’s been in the business a long time and has a good idea of what we’re going to do to grow the business. Like all people who get deeper and deeper into the operational side, I think they realise there’s a lot more parts than they could have imagined in an operating business.
But there are a lot of good people in our business who’ve been in this industry for a long time. They are quite open minded about how to evolve the business and that’s key. You want to engage your staff, who are on the front lines every day. What do they see that we could be doing? So a lot of the conversations we’ve been having are about how to go from the old big terminal style to a more tablet or digitalised way. A lot of that we’ve gauged from the field, where people have come up with a lot of ideas about how to have a more digitalised and less-capital intensive business. Richard’s done a good job of engaging people in that process.
Read this article on Gambling Insider here By Tim Poole
One of Sportech’s charity partners, WellChild, held their Festival Focus event on Thursday 5th March, gathering over 200 racing fans for an expert racing panel to share their top tips for The Cheltenham Festival 2020.
The panel included ITV Racing’s Ed Chamberlin, Trainers Kim Bailey and Richard Philips, Columnist and former Racing Post editor Bruce Millington, and Jockey Aidan Coleman. The panel shared their experiences, tips and opinions for this year’s Cheltenham Festival, whilst raising money for national children’s charity, WellChild.
The event helped raise almost £17,000 for WellChild which will support the charity’s mission working with seriously ill children, young people and their families.
On Tuesday March 3, 2020, members of the Sportech Team – Richard McGuire, CEO; Rich Pingel, CLO; and Ted Taylor, President of Sportech Venues – went before the Connecticut General Assembly’s Public Safety and Security Committee, which oversees legislation related to gaming in the State. The team was there to testify, on behalf of all Sportech employees in Connecticut, to the need for common sense, equitable Sports Betting legislation.
Ted Taylor, President of Sportech Venues, stated in his testimony,
“We view this legislative session as a critical juncture for the gaming industry in Connecticut and an opportunity to permit local operators – existing partners of the State for many years – the right to compete effectively against…illegal markets and surrounding states [that have already legalized the activity].”
Sportech CEO Richard McGuire submitted written testimony that further reiterated Sportech’s consistent position on Sports Betting in Connecticut; that the State should authorize the four existing licensed gaming operators – including Sportech – to offer online and retail Sports Betting with appropriate taxation and regulation.
CEO McGuire wrote in support of a bill raised to legalize Sports Betting, stating,
“The approach outlined in Bill 5168, to license the existing gaming partners to offer Sports Betting, provides consumers a competitive choice; critical to a healthy legal Sports Betting marketplace, will protect jobs, drive incremental State revenue from established licensees, and tackle the illegal market.”
Continue to watch this space for updates on the status of Sports Betting in Connecticut.
Update from Sportech Bump 50:50
Sportech’s Bump 50:50 celebrated another successful launch with the kick-off of a new 50/50 raffle program for the University of Pittsburgh. This season, Sportech will provide its digital 50/50 raffle solution during certain University of Pittsburgh’s Men’s home basketball games.
For the University of Pittsburgh, Bump 50:50 is delivering its integrated raffle solution including its proprietary technology and its signature design and implementation package consisting of marketing, selling, and operational strategies.
Dan Tanenbaum, President of Bump 50:50, commented, “We were thrilled to welcome the University of Pittsburgh as our first new client of 2020 and are very excited to deliver an engaging raffle to their fans as well as vital funds to support the mission of the University of Pittsburgh Department of Athletics.”
Update from Sportech Bump 50:50
Sportech’s Bump 50:50 has been selected by the Pennsylvania State University (“Penn State”) to provide electronic 50/50 raffle programs at select Penn State University home games, matches and other fundraising events.
Bump 50:50 delivers a turnkey, integrated raffle solution that is proven to help charitable foundations produce successful raffles that maximize their charitable fundraising. In addition to proprietary technology, Bump also delivers its signature design and implementation package consisting of marketing, selling, and operational strategies that have a demonstrated track record of success across multiple client implementations to drive big results.
Dan Tanenbaum, President of Bump 50:50, stated, “We are very happy to welcome Penn State to the Bump 50:50 family and are excited to have the opportunity to help them achieve their fundraising goals.”
For more information about Bump 50:50 and their electronic raffle systems, visit the Bump 50:50 website.
Update from Sportech Bump 50:50
Sportech’s Bump 50:50 has been selected by Sinai Health Foundation to provide electronic 50/50 raffle programs online at www.sinai.bump5050.com and during designated events in Ontario, Canada.
Bump 50:50 launched the new Sinai Health raffle service in October, delivering their innovative package of online and in-stadia electronic raffle technologies and proven marketing strategies. The raffle will progress through to the 6th January drawing.
Sinai Health Foundation is one of the recent additions to the Bump 50:50 client roster from the world of non-sports related charitable organizations. Bump has over 90 clients from the worlds of professional and collegiate sports, entertainment events, and charitable foundations.
Bump 50:50 provides a package of electronic raffle technologies and services that is proven to help charitable foundations implement successful electronic 50/50 raffles. In addition to point-of-sale hardware and software, the Bump 50:50 package includes a triple-redundant central system and rapid-response services. Bump’s signature implementation and marketing package helps maximize the potential of its customer’s 50/50 raffle programs, generating raffle jackpots as high as four hundred thousand dollars.
For more information about Bump 50:50 and their electronic raffle systems, visit the Bump 50:50 website.
Dan Tanenbaum, President of Bump 50:50, a division of Sportech Racing and Digital, took time out of his busy day to answer some questions for iGB North America Magazine on In-Stadia Betting. The article “In The Thick Of The Action” was published in Issue 41 last week.
The article examines how sporting arenas are “evolving into technologically advanced entertainment platforms, rather than simple venues where people gather to watch live sport”. The article discusses three main factors that contribute to in-stadia betting; “Stadium As A Platform” suggesting the stadium is more than another betting venue, “Preparing The Ground” for legal wagering in state regulation, and “The Mobile Question” how a partnership between a venue and an operator could look.
Dan comments on how Bump has already entered into many stadiums with technology for raffles and prepared the ground for future betting.
“[While] we don’t really view Bump’s charitable raffles as ‘gambling’ per se, in the US and Canada it is the only way to legally win money at a game right now,” he explains. “And, in cases where the activity is permitted, raffles prepare the stadium and its staff for betting activity.”
Dan says “a significant portion” of Bump 50:50 raffle sales come through kiosks or roaming sales agents, but adds it also provides sales via web and mobile devices where permitted by law.
From experience, Bump 50:50 have also created solutions to some of the mobile questions raised in the article. They have developed core processes to mitigate some of the technical limitations, such as concentrated wi-fi demands and exclusivity zones. Dan explains “the implementation of in-stadia betting in the US will be determined by the limitations imposed by regulators more so than by exclusivity agreements.”
Find the full article here.
For more information about Bump 50:50 and their electronic raffle systems, visit the Bump 50:50 website.
Sportech, the international gaming technology business, is pleased to announce that it has been accepted as an Associate Member of the World Lottery Association, a global professional association of state lottery and gaming organizations from more than 80 countries.
Sportech joins WLA’s associate members from the worldwide lottery supplier industry on the basis of the company’s longstanding expertise as a provider of enterprise gaming solutions to national lottery, pools lottery, and charitable sports raffle operators.
Building on established lottery supply contracts in North America, Europe and the Caribbean, Sportech is making significant investment in lottery with technology and talent secured with the 2019 acquisition of Lot.to Systems, the integration of lottery bets on Sportech’s Quantum™ System software, and rapid growth in its Bump 50:50 sports raffle business.
Julian Bewley, Chief Commercial Officer of Sportech PLC, said, “Sportech are thrilled to join the WLA as an associate member and for the opportunity to contribute to the industry and its growth through our passion for making lottery games more appealing, accessible, and fun and to giving lottery operators innovative tools and strategies to propel their business forward.”
Bruno Gay at EPMA RB Forum (Far Right)
On Friday 4th October, Sportech’s European sales team attended European Pari Mutuel Association (EPMA) Racing and Betting (RB) Forum in Paris. This year, the RB Forum was attended by 140 participants from 27 different countries from the Horseracing and Tote community focussing on innovation.
Sportech was a proud sponsor at the RB Forum as an Associate Member of the EPMA and a panellist discussing global and world pools. Sportech Vice President Sales and Business Development EMEA, Bruno Gay, participated on the panel, “Common pools, betting innovation and a place for a global bet” in which the Ascot World Pool was the hottest topic up for discussion and was described as an “exciting global pool success”.
Discussing Sportech’s key role in the delivery of the world pool, Bruno described Sportech’s experience with the 2019 Ascot World Pool and the concept of “reverse guesting”, the driving framework behind global pools, commenting, “world pools are accessible and feasible thanks to technology.”
To view Bruno’s presentation and others from the RB Forum, go to the RB Forum website here.
For more information about Sportech Racing and Digital, visit www.sportech.net.
