BetMakers Technology - 5-Year Fixed Odds Deal a Model for the Future

BetMakers Technology Group (ASX:BET) is a B2B software services business focussed on servicing the wagering market and race operators globally. BetMakers is not a gaming company, it is a technology company that is facilitating commercial opportunities for racing authorities, rights holders, and corporate bookmakers while providing an improved racing experience for punters. The company has announced a five-year on course fixed odds deal with Monmouth Park racetrack in New Jersey in which BET will manage fixed odds terminals and kiosks on a year-round basis. The company estimates that, after an initial investment of A$250,000, it will generate in excess of US$1m in revenues a year from FY22 from the agreement to provide Managed Trading Services to Monmouth Park. In our view, the company is being conservative in its estimates given New Jersey’s 2-year old sports betting fixed odds market generated US$299m in revenue for operators in CY19 (source: legalsportsreport.com), with Monmouth Park generating almost US$26m in revenue. As we highlighted in our recent update report, Managed Trading Services delivering new revenue streams, we had not yet factored in US expansion of Managed Trading Services into our forecasts.