Processing cost hikes hit Sportingbet

The company reported a pretax loss of £3.8m for the half year to 30 September, compared with £1.6m last year, but turnover grew significantly to £494.5m, from £293.2m, largely as a result of acquisitions.

Costs associated with the integration of recent purchases Sportsbook - which is now complete - and Sporting Odds were a factor in the increase in its deficit, with administration costs rising by nearly £3m to £13.5m. However, Sportingbet increased its cash position by £3.7m to £19.6m.

Customer numbers grew rapidly, from 194,000 to 753,000 - the company now processes more than 49,000 bets per day. The number of bets taken in the half year from the US leapt by 188% to 7.29m, while Europe showed even stronger growth, with bets up 410% to 1.18m.

However, Sportingbet is now looking at alternative ways of processing customer funds in the US after suppliers raised fees by 30%. It also pointed to adverse currency movements during the period as a factor in its increased loss.

The company, which has undertaken extensive lobbying to encourage the US gaming market to open up, believes that "the overall political and legislative trend in the US continues to be positive" and that "the only viable proposition for the authorities to take is one of proper regulation".

The US is fundamental in Sportingbet's strategy - it derives more than four fifths of its bets from the States.

Sportingbet chairman Peter Dicks said: "The integration of Sporting Odds in on plan and Europe is on target to reach profitability before the end of this financial year. The third and fourth quarters of the financial year are the busiest trading quarters for Sportingbet."



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