theScore reports record betting activity in Q2 but counts the cost of US expansion and IPO

Image source: Score Media and Gaming

Score Media and Gaming has posted its results for the three and six months ended February 28, 2021, with betting activity on its theScore Bet app achieving record levels despite the firm showing a net loss of $17.57m.

Addressing the financial highlights, the report quoted total revenue for Q2 F2021 at $5.6m, with record Q2 media revenue partially offset by negative net gaming revenue of $2.4m. Media revenue in the quarter was $8m versus $6.8m year-on-year, representing a 17% year-over-year increase.

Q2 gaming handle came in at $81.6m, while gross gaming revenue was $0.4m. When taking into account promotional costs and fair value adjustments on unsettled bets, this resulted in negative net gaming revenue of $2.4m.

EBITDA loss in Q2 F2021 was $12.9m compared to an EBITDA loss of $8.6m for the same period last year. According to the firm this was primarily the result of additional expenses incurred in connection with the ongoing expansion of its gaming operations and costs and professional service fees related to the recently completed US initial public offering.

Chairman and CEO John Levy told investors: “We achieved record gaming handle and another quarter of solid media revenue growth in our fiscal 2021 second quarter. The strong second quarter results highlight theScore’s ongoing momentum and our users’ active, growing engagement with our mobile offerings. 

“Second quarter handle of $81.6m on theScore Bet grew 491% year-over-year and 46% over the first quarter. We also recorded our highest-ever second quarter media revenue, with 17% year-over-year growth driven by our compelling content as well as our outstanding North American reach and audience engagement.”

He continued: “Following the launch of theScore Bet in Iowa in mid-February, our mobile sports betting platform is now live in four states as our market rollout continues on schedule. 

“We’re successfully building our user base and leveraging our media audience, while simultaneously welcoming new users to our platform as demonstrated by the year-over-year and quarterly sequential increases in gaming handle this quarter, including a nearly 200% increase in our New Jersey handle compared to the year-ago period. 

“Through our recent agreement with Caesars Entertainment we now have sports betting market access in Illinois, the sixth most populous US state.” 

Levy added that during the second quarter, the company raised US$186.3m of gross proceeds through its US IPO which it intends to deploy towards the ongoing build out of its integrated sports betting and media technology platform. 

“The new capital provides additional resources to further execute on our strategies to integrate sports betting and content to drive deep user engagement and expand our market access,” he said.

“We will continue to enhance our media and betting ecosystem through investments in technology to further develop user personalization, unique betting offerings, and in-game prop bets, which are expected to be a significant driver of US sports betting growth. 

“At the same time, we are working to expand our access into new US states while continuing our preparations for the anticipated legalization of single-game sports wagering in Canada.

“We are very encouraged by the recent momentum in support of Bill C-218, which would legalize single-game sports betting in Canada. Our popular brand and dominant Canadian market position will enable theScore to participate as a market leader in what is expected to be a very large addressable market, including in our home province of Ontario.”

On the outlook, Levy advised: “Our unique combination of media and betting is a powerful differentiator in a growing marketplace. We intend to leverage our position as the only digital sports media company in North America that operates a sports betting platform to further grow our US business and capture meaningful market share in Canada when the market opens. 

“With our fully integrated sports media and betting experience and technology focus, we are perfectly positioned to efficiently acquire and engage new customers while driving strong customer loyalty and attractive margins which will help drive the long-term enhancement of shareholder value.”