Place your BETs

Nick Maclean

Surrey Asset Management

Betmakers (ASX: BET) is a provider of data, technology and software tools to wagering operators and racing bodies globally. Amongst other things its products include data provision, tote and fixed odds services, digital platforms and data and trading solutions. Unlike Pointsbet (ASX: PBH) or Tabcorp (ASX: TAH), the company is focused on the B2B segment of the market.

Some interesting events have transpired over recent months which has increased the markets interest and is reflected in its very strong share price appreciation. Firstly, in December of 2020 the company announced the acquisition of Sportech. Secondly, in February 2021 Matt Tripp who is a leading Australian online bookmaker, participated in a capital raising to invest in the company while joining as a strategic adviser. 

By acquiring Sportech the combined business will have operations in over 30 countries, have 200+ bookmaking, racing, sport and digital customers and be comfortably EBITDA positive on a revenue run rate projected by the company to be $62m.  

While BET has been building out its offering, the objective is to provide full turnkey solutions for clients, effectively outsourcing many technology, information and trading services for them. In a world where traditional on course and in store bookmakers have to go online and information flow is constant, we believe this is a compelling proposition:

Fig. 1 - Betmaker's key value propositions for users (Source: Supplied)

On a regional basis the US market looks exciting. Sportech has given it the opportunity to distribute racing content such as betting markets, data and vision in over 36 states. As we see from data coming out of companies such as Pointsbet, the potential US market is large particularly should fixed-odds betting roll out. 

With $100m in cash on its balance sheet, Matt Tripp invested and onboard as an incentivised strategic partner and Tom Waterhouse also offering his expertise as a very large shareholder, we continue to see plenty of upside optionality in earnings from current levels.

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Surrey Asset Management Pty Ltd (Surrey AM), [ABN 16 620 265 821 Corporate Authorised Representative No. 1263417 of Specialised Investment and Lending Corporation Pty Ltd ACN 149 520 918 (AFSL 407100)(Trustee)] believes the statements contained in this document, to the extent it is aware, to be reliable & accurate at the time of its production. However, the information in this document is general in nature and does not take into account your personal circumstances, financial needs or objectives. Statements contained in this document are not general or personal advice and should not be considered as a recommendation in relation to an investment in the Fund or that an investment in the Fund is a suitable investment for any specific person. You should seek independent financial/legal advice and read this presentation in conjunction with the relevant Information Memorandum available on our website prior to acquiring a financial product. Past performance and/or forward-looking statements are not a reliable indicator of future performance. Except as required by law and only to the extent so required, the Trustee, Surrey AM, its directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information contained in this document, or for any negligent misstatements, errors or omissions.

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Nick Maclean
Portfolio Manager
Surrey Asset Management

Nick Maclean has 20 years experience in financial markets. Prior to founding Surrey Asset Management which is a high conviction, long only Small & Mid Cap Australian Equities Fund Nick most recently worked for Cooper Investors.

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