Score Media CEO John Levy Says Company in ‘Pole Position’ for Canadian Sports Betting
For the quarter, which ended on Nov. 20, the sports media and mobile betting company reported CAD 10.6 million (US 8.3 million) in total revenue. That is a quarterly record for the company. It’s also 15.2 percent better than the CAD 9.2 million (US $7.2 million) reported in the first quarter of 2020.
The quarter began with launches of theScore Bet, the company’s online sports betting app, in Colorado and Indiana. Those additions tripled the number of states where the company operates. Not surprisingly, the company reported a record CAD 55.8 million (US $43.8 million) handle for the quarter. That represented a 535 percent jump from the same quarter in 2020.
While Handle Up, Gaming Revenue in the Red
However, the company also reported a gross gaming loss of CAD 300,000 (US $235,565). When factoring in free bets, bonuses, and fair value on unsettled bets, the net loss is CAD 2 million (US $1.6 million).
During a call with analysts Wednesday to discuss the earnings, Score Media President and COO Benjie Levy said the loss was attributable to player promotion specials and the Indiana and Colorado openings.
Among the promotions the sportsbook has offered since the resumption of major professional sports was a 5 percent cashback offer over a 60-day period that began with the placement of a customer’s first bet. The promo was capped at $2,500 and applied whether the bets won or lost.
Levy told analysts turning those negatives into positives will rely on a couple of things. That includes rolling out the app in additional states. However, he said the company sees positive movement.
“I can tell you it isn’t going to take years to get there, and it’s probably not going to happen in the next month or two,” said Levy, according to a transcript on Seeking Alpha. “So, we’re continuing to build, the momentum is working in our favor. And I don’t think I can be any more specific than that. But, we’re starting to see encouraging results as we gain momentum in the states that exist, and hopefully in the new states that come on board.”
One new state where the company is preparing to launch is Iowa. Company executives hope to be in the state within weeks, pending regulatory approval. Iowa, like Indiana, is one of 11 states theScore has access to through a deal with Penn National Gaming.
CEO: Company’s Reach in Canada Unrivaled
However, one market company officials are really excited about is the one in their backyard. They told analysts that there’s cross-party momentum within Parliament to repeal the ban on single-game wagering in Canada this year. That move would greatly expand sports betting in the country, as only parlay betting is currently legal.
With its sports betting app already closely tied to its sports media app, Score executives think they may have an advantage in the Great White North similar to what FanDuel and DraftKings have in US states.
As Founder and CEO John Levy plainly put it: “We have the pole position here.”
I think when we look at the two markets (US and Canada), we look at the dramatic differences in terms of our reach and our brand recognition, and look – everybody in Canada knows theScore,” John Levy said. “Everybody who’s on mobile apps uses theScore. If you add up (Canadian sports media outlets) TSN, Sportsnet, anybody else, they don’t even come close to us.”
The sports media app averaged 3.9 million monthly users. Those individuals averaged using the app 116 times per month, according to company figures.
He estimated the potential of the annual gross revenue for Canadian online gaming between US $3.8 billion and US $5.4 billion.
In the US, company executives said at least 50 percent of theScore Bet users were also using theScore sports media app. The media also gives users the opportunity to place wagers on games, which may increase growth in in-game betting.
Levy Hopes to Score US Stock Listing
Last month, Score Media closed on an equity deal that brought in CAD 46 million (US $36.1 million) for nearly 32.9 million shares of stock. Among the uses the company plans for the proceeds include additional rollouts of theScore Bet in the US and Canada. Company officials may also use some of that money toward user acquisition.
In September, the company earned a listing on the Toronto Stock Exchange, moving away from the more speculative Toronto Venture Exchange. The Toronto market is Canada’s largest, and the eighth-biggest in the world. That said, Score Media (TSE:SCR) executives announced they’re contemplating a listing on an American exchange.
“We believe the potential benefits for theScore, and our investor base may include a significantly larger pool of capital, greater average daily trading volume, exposure to a larger number of US retail and institutional investors, and a potential increase in market valuation,” John Levy told analysts.
The company will hold its annual meeting with stockholders virtually on Sept. 10. At that time, the company will ask shareholders to allow Score Media’s board to initiate a stock consolidation. John Levy said that move is in conjunction with a potential US listing.