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Betmakers Technology Group

BetMakers Technology Group - Racing Still On, Upgrading for Advance into US Fixed Odds

569 Views26 Mar 2020 12:09
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SUMMARY

BetMakers Technology Group (ASX:BET) is a B2B software services business focussed on servicing the wagering market and race operators globally. The company’s technology and systems are used by every racing authority in Australia and most of the major online bookmakers. 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. We have incorporated in our forecasts new estimates for earnings from the recently announced exclusive agreement for New Jersey’s fixed odds wagering, for the JV with Tom Waterhouse and an acceleration of on-course bookmakers converting to Price Manager and BET’s white label online platform. While sports betting globally has been impacted by sporting codes halting their seasons due to COVID-19, many racing clubs continue to operate without on-course patrons. Hence our view that on-course bookmakers will be forced to seek online solutions.  BET has confirmed today that cancellation of events had resulted in increased demand from existing and new wagering clients for additional content from BET’s Global Racing Network. Our forecasts have been adjusted to reflect our expectation that BET will invest in developing these new ventures near term but upgraded for longer term earnings upside. Our base case DCF valuation using a WACC of 15.0% (previously 14% and due to ERM increasing to 7.0% from 6.5%) is $0.30/share with 47.0% in the terminal value.

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