XLMedia CEO David King has told investors that he is anticipating weaker revenues in H1 of 2023 compared to the year prior due to poorer market conditions in the US.
The sports media publisher, which offers affiliate marketing services for US operators, noted that the beginning of this year faces tough annual comparatives, as New York’s sports betting launch proved to be particularly lucrative in 2022.
Whilst the launch in Ohio did provide a welcome boost at the start of the year, King explained that Massachusetts’ mid-March launch did not offer the huge acquisition opportunity that was anticipated.
He explained to investors at XLMedia’s AGM: “In the US, we saw a strong start to Q1 with the launch of online sports betting in Ohio. However, as seen elsewhere in the market, H1 2023 revenues are inevitably going to be below the prior comparator period of H1 2022, which benefited from the much-anticipated launch of online sports betting in New York.
“The launch of online sports betting in Massachusetts in mid-March, after the NFL season ended, while solid, did not see the spike in revenues normally seen on a state launch.”
Facing adverse market conditions, XLMedia noted that the level of acquisition spend that operators are willing to stump up and are able to make is “not comparable” to H1 of last year, primarily because there are “less generous promotions” that operators have been offering.
Despite near-term drags on the horizon, XLMedia maintains positivity in its long-term prospects, particularly in the US, where it noted that markets are rarely linear.
King added to his statement: “We expect the current softness in the market to continue across the early summer, with a return to significant investment in customer acquisition, and the launch of new products commencing in the run-up to the new NFL season bolstering the second half of the year.
“We also see further opportunity in Massachusetts as the NFL season starts and are anticipating the launch of online sports betting in Kentucky.
“Looking longer term, we can expect to see many more US states legalize online sports betting and online casino. 23 states are yet to legalize online sports betting, including California, Georgia, and Texas, three states are legal but not yet operational, including Florida, and 43 states are yet to legalize online casino.”