UK gambling operator Sportech saw dramatically increased losses last year as the costs of US sports betting expansion mounted and one of its Connecticut retail venues failed to live up to the company’s expectations.
Figures released Thursday show the Bristol-based Sportech generated revenue of £64.8m in 2019, a modest 2% improvement over 2018’s result. Gross profit was up £1m to £46.9m, adjusted earnings rose a similar amount to £7.5m while the company’s pre-tax losses more than tripled to £8.4m.
The tide of red ink came courtesy of a £5m impairment charge on its Bobby V’s Restaurant and Sports Bar in Stamford, Connecticut, as well as costs associated with Sportech’s ongoing efforts to reinvent its US-facing race betting operations to take advantage of the country’s rapid transition to a legal sports betting environment.
Sadly for Sportech, Connecticut’s fractious gaming market shows no signs of breaking the current impasse that is keeping legal wagering from becoming a reality. But the company continues to develop a B2B sports betting platform while conducting a “relentless professional pursuit” of a state betting license.
Sportech’s Venues division reported revenue falling nearly 9% to £28.8m thanks to declines in both wagering and food & beverage sales. The Racing & Digital division, which includes Sportech’s in-venue Bump 50:50 charitable raffle unit, saw its revenue improve 4.3% to £36.5m.
Last year saw Sportech become an associate member of the World Lottery Association following its acquisition of UK-based iLottery solutions provider LOT.TO Systems. Sportech has since launched the pilot of its Rapid Lotto format in South Africa, with the product expected to go live sometime mid-year.
Like virtually every other retail gambling operator on the planet, Sportech has been negatively impacted by the COVID-19 coronavirus pandemic. The company’s Connecticut venues closed their doors on Monday with an eye toward reopening by the end of the month, although the state has since ordered all bars, restaurants and casinos shut through the end of April. Fortunately, the company has £11m cash on hand and no debt.
