Australia-listed race and sports betting operator TopBetta Holdings Ltd has struck a deal to acquire Melbourne bookmaker Mad Bookie.
On Thursday, TopBetta announced that its TopBetta Pty Ltd subsidiary had agreed to terms with Mad Bookie, which will continue to operate under its current brand identity at MadBookie.com. Mad Bookie, which was formed two years ago, boasts a 15k-strong player database who turn over around A$80m per year.
The deal, which remains subject to approval by the Northern Territory Racing Commission (NTRC) and racing bodies, will see TopBetta pay Mad Bookie’s owners $100k up front, with a further payment of either (a) 24x Mad Bookie’s average monthly net gaming revenue over the 12 months following completion of the deal, or (b) $400k minus expenses that TopBetta expects to incur from integrating Mad Bookie’s operations.
The future payment is to be made in either cash or TopBetta shares, or a combination of the two, subject to agreement by both parties.. Should TopBetta elect not to pay the full purchase price in cash, Mad Bookie’s owners have the option of buying the business back from TopBetta for a price equal to TopBetta’s initial $100k payment plus its expenses.
Mad Bookie CEO Brett Luntz said his company “couldn’t be more excited” at joining the TopBetta family and promised Mad Bookie customers would feel the same. Luntz and key staff have agreed to remain at Mad Bookie’s controls at least through the 12-month earnout period.
TopBetta CEO Todd Buckingham said the deal offered the potential to “quickly and substantially increase turnover for TopBetta’s retail business while adding significant revenues due to higher yields and cost savings.”
Buckingham said acquiring ready-made, active databases “makes a lot of sense in an industry that has high customer acquisition costs” and TopBetta would entertain similar opportunities as they present themselves.
TopBetta’s business revolves around proprietary technology platforms that merge online sports and race betting with fantasy wagering in which fans compete against each other tournament-style. A year ago, TopBetta acquired a stake in Australian daily fantasy sports and pool betting technology firm Modern Wagering Systems.