As you are aware, TopBetta Holdings Limited ("TBH" or the "Company") has signed a binding HOA with PlayUp Limited ("PlayUp") for the sale of the TopBetta and Mad Bookie retail businesses. As previously announced, completion of the PlayUp transaction is subject to the satisfaction of a number of conditions precedent and the execution of certain transaction documents.
The deal is significant for TBH.
It will deliver $6million in cash to the Company and further ongoing revenues through a services agreement that we believe will underpin our B2B business model (which is explained in detail within this presentation).
TBH is a company now focused on developing, selling and supporting the following scalable B2B wagering offerings to other bookmakers globally:
- Racing data & informatics
- Products (including The Global Tote)
Each of these revenue streams is currently live and we have multiple bookmaking clients for each of them, with detailed commercial plans to grow as shown within this presentation.
TBH has been building this B2B offering, including The Global Tote product, for the best part of 24 months. At the same time as developing the B2B the Company has been running a high-cost- based retail business division that we believe was necessary, commercially and with regulatory aspects, to prove our own B2B products before taking them to other Australian and global wagering operators.
The decision to exit retail wagering operations reduces our cost base, especially the cash burn of customer acquisition and marketing that is a part of retail wagering reality in a congested Australian market. It should also be noted that the decision was made after consideration of TBH's strategic options to either achieve scale in our retail business operations, through more acquisitions such as Mad Bookie and other small-to- mid-sized operators, or to sell to a preferred buyer that would allow us to continue to provide a variety of platforms, racing data & informatics and products on an ongoing service agreement contract. This has given TBH a new revenue base in the "Wholesale Business" of B2B selling.
With regards to our deal partner PlayUp, we believe this company has made its intentions clear in the wagering landscape with acquisitions of Classic Bet, Draft Stars, TopBetta, Mad Bookie and Punting Club brands in recent months. We believe this is significant evidence of the PlayUp company pursuing its own aggressive retail strategy alongside a fantasy sports wagering strategy that is based on scale, and one which we believe can deliver ongoing commercial benefits to TBH through its continuing exposure in the retail wagering industry through revenue share service agreements.
TBH has welcomed the deal of $6million in cash and an ongoing services agreement to generate revenue from PlayUp's growing suite of brands. More importantly we have also welcomed the opportunity to work with and ambitious partner like PlayUp as it allows our business to focus on what it does best by providing the platforms, racing data and products and supporting another wagering operator to focus on what it wants to achieve with speed through marketing and acquisition.
I want to reiterate to our shareholders that there are now 3 Revenue Streams we have built modelling forecasts for at TBH as part of the ongoing business model. I understand that the most talked about to date has been our pooled betting platform The Global Tote, which is licensed in the UK, and has now been in operation for 12 months, during which time it has operated on over 2500 race meetings, turned over $100 million.
The Global Tote has been a considerable investment as we believe this product has the ability to revolutionise wagering globally by providing a better suite of products for the consumer while allowing better margins for operators and also solving integrity and commercial expansion issues for racing bodies from all corners of the globe.
As we have reported, The Global Tote has been the subject of much discussion with regulators across the globe. Regulators in the UK and US have approved the product to be offered to bookmakers in their respective jurisdictions, but as our shareholders will be aware, TBH through its wholly-owned subsidiary The Global Tote Ltd has chosen to establish The Global Tote with significant liquidity in the pools on Australian race meetings and offer the product as B2B solution to Australian licensed bookmakers. Since launching, The Global Tote has generated more than $2 million for Australian racing bodies and has generated widespread interest.
While The Global Tote has an approval from the Northern Territory Racing Commission (NTRC) for a data agreement with TopBetta, it has not received the green light on other agreements with Ladbrokes and Neds. To this effect, TBH has met with NTRC to better understand the issues and has also met with the NT Attorney-General (as recently as last month).
TBH accepts that in a fast-moving wagering landscape that regulators need to be well briefed on new innovations and products and comfortable to approve new agreements. TBH has sought clarifications from The Global Tote's licensing entity in the UK to assist its representations to NTRC and the Northern Territory Government on what The Global Tote product is classified as (among other legal interpretations) but also to demonstrate what The Global Tote is offering bookmakers under their jurisdiction. The bookmakers as noted here have indicated to TBH they wish to use The Global Tote to benefit their own businesses. We are dedicated to working with bookmakers and regulators to reach positive outcomes in all jurisdictions we operate in, and plan to enter, and certainly don't intend to go away based on being disruptive to competitors.
The Global Tote has the capability to host pools on any racing or sporting event around the world and is licensed to operate through Alderney in the UK and also in the US via the North Dakota Racing Commission.
By divesting of retail business operations and expanding up our revenue streams within the B2B model we are also now focusing heavily on executing our existing international deals in the UK and the US where the Global Tote has received regulatory approval to operate.
The Platforms and Data parts of our business will strengthen The Global Tote and other Products as TBH expands and rolls out these solutions into the global wagering scene.
Through our understanding of world wagering TBH seeks to become the wholesale operator of choice for racing data, platforms and products that save operators costs (such as reducing the number of data feeds from currently hundreds per bookmaker to a single integration point established by TBH) to growing revenues with new and innovative wholsale and reatail products such as Fixed Exotics and new risk-management platforms.
This is a very exciting stage of TBH's journey as we get back to the core of why we started this business and that was to create unique and compelling wagering products for bookmakers - and ultimately for the end consumers around the world.
We thank our loyal shareholders for their support and look forward to updating the market soon on further announcements.
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About Topbetta Holdings Ltd
TopBetta Holdings Limited (ASX:TBH) is an ASX-listed holding company and a global provider of online wagering products and services to both wholesale and retail markets through its various wholly owned subsidiaries. TopBetta Pty Ltd operates a retail wagering business, offering consumers wagering, fantasy tournament and content products and services. Global Tote Australia Pty Ltd conducts TBH's Wholesale Business, which includes operating and licensing its wholesale tote product which enables licensed wagering operators, including corporate bookmakers and tote operators from all over the world, to participate in global pools. The Wholesale Business is conducted under a B2B licence granted by the UK Gambling Commission to Global Tote Limited, a company incorporated in Alderney, UK.
Topbetta Holdings Ltd