New Jersey’s sports betting market has so far been a bust for sports media company theScore but the company’s CEO is preaching patience because the betting unit is still in “diapers.”
Toronto-based digital sports media service Score Media and Gaming Inc released its fiscal Q1 financial results on Wednesday, revealing revenue of C$9.2m (US$7m) in the three months ending November 30, 2019, roughly C$300k less than the company reported in the same period in 2018.
The quarter was the first in which the company debuted theScore Bet mobile wagering app, which is currently only operational in New Jersey but aims to go live in Indiana later this year through the company’s partnership with casino operator Penn National Gaming.
The betting returns have so far been minimal, with gross gaming revenue of just C$242k in its fiscal Q1. Thanks to costs associated with the betting app’s launch, the net return from betting operations was a loss of C$26k.
theScore Bet handled around C$8.8m (US$6.7m) of wagers during the quarter, while the overall New Jersey betting market reported handle of around US$1.5b in the same period. Investors reacted negatively to the news, pushing the company’s stock price down 7.3% by the close of Thursday’s trading.
On Wednesday’s analyst call, Score CEO John Levy rejected suggestions that betting app was a dud, saying “we were just born, for God’s sakes … we’re still in our diapers.” Levy also said his company was “not worried about the goddamn competition, we just want to just continue to operate and get people playing more often.”
Company president Benjie Levy said there was “a handful of people who may have gone on a particularly good streak” in November, which had “an outsized impact” on the company’s betting win margin. Levy said he expected margins would eventually normalize as the company’s betting history lengthened.
The company said around three-quarters of betting customers “came directly from theScore sports app” and these sports app users were proving “more valuable in terms of handle, gross gaming revenue and retention than non-sports app users.”
Benjie Levy declined comment on how much the company was paying to acquire the other 25% of its bettors or what percentage of its monthly active sports media users it had converted to betting.
The company announced Wednesday that it is joined the growing list of companies that have signed on as an Authorized Sports Betting Operator of the National Basketball Association. The deal will allow theScore access to NBA data for betting purposes, as well as freedom to use NBA trademarks and logos on its betting app.
