Canadian media business theScore saw its net loss increase 59.3% year-on-year in the 12 months to August 31, 2019, after the launch of its new sportsbook product in New Jersey led to higher spending.
Overall revenue for the business’ 2019 financial year amounted to CAD$31.1m (£18.5m/€21.4m/US$23.8m), up 12.0% from $27.7m in the previous year.
theScore noted higher sales in both the US and its native Canada, with revenue from Canadian sources up 28.4% to $13.1m, and other revenue, predominantly from the US, rising from 2.9% to $18.0m.
Towards the end of its financial year, theScore entered the sports betting market for the first time, rolling out its Bet.Works-powered sportsbook product in New Jersey.
The launch had an impact on spending for the year, with total costs for the year ending August 31, 2019, coming in at $40.7m, up 20.1% from $33.9m in the previous 12 months,
Personnel costs climbed from $16.2m to $18.8m, with most of this rise taking place in the final quarter as part of preparations for the sportsbook launch in New Jersey.
theScore also saw facilities, administrative and other costs jump 71.0% to $10.6m, while content spending increased from $1.8m to $2.1m. However, marketing spending was level at $2.5m, while costs associated with the amortisation of intangible assets were down 20.6% to $2.7m.
Higher spending meant net loss increased 59.3% from $5.9m to $9.4m for the full year.
Focusing on the final quarter of the year, when theScore went live with its new sportsbook, revenue amounted to $6.4m, up from $5.1m in the same period in 2018.
Net loss during the three months to August 31, 2019, stood at $4.8m, which is higher than $3.1m last year as a result of higher spending around the sports betting expansion. Earnings before interest, tax, depreciation and amortisation was also worse off at negative $4.1m, which is 70.8% worse off than the loss of $2.4m last year.
Reflecting on the results, theScore founder and chief executive John Levy was keen to focus on the roll out of its new sports betting services, saying the launch in New Jersey, as well as an agreement with Penn National Gaming to go live in 11 other states, presents the business with growth opportunities.
“theScore Bet is live and taking bets in New Jersey, capping one of the most significant quarters and fiscal years in our history,” he said. “Not only did we successfully launch our new sports betting platform in the fast-growing New Jersey sports betting market, but we also secured market access rights for an additional 11 states via a highly-coveted partnership with Penn National Gaming.
“Along with New Jersey, this provides us with potential market access to offer mobile sports betting to about 30% of the US population,” he noted.
Levy added that the business was exploring further opportunities to move into additional states, pointing out that the $40m strategic investment by Fengate gave it the financial might to do so.
“The continued growth of our media business, combined with our unique and differentiated entry into the sports betting space, puts us in a strong position as we enter fiscal 2020,” he said in conclusion.