Youbet To Open Oregon Hub a Month Early
Updated: Saturday, July 28, 2001 8:26 PM
Posted: Thursday, July 26, 2001 10:51 AM
Youbet.com will begin handling bets through its new Oregon wagering hub in August, a month earlier than expected.
The California-based Internet wagering company is opening the new hub as part of its joint venture with the TV Games Network. Once the hub is operating, Youbet.com customers will be able to wager on the 20 premier racetracks, including Del Mar and Saratoga, that were offered through TVG's hub and previously unavailable because of exclusivity contracts.
Youbet.com is now beta testing the Oregon hub.
"We are on track to officially launch our hub operations in August...because of the strong success of our testing," said Robert Fell, Youbet.com's chairman and chief executive officer.
Youbet.com (Nasdaq:UBET) reported a record handle of $28.4 million for its second quarter ending June 30. The record was reached without the availability of TVG affiliated racetracks, which handle about 45% of the United States wagers on Thoroughbred racing.
The company expects to report revenue of $1.7 million for the quarter compared with the second quarter of 2000 when revenue was $1.5 million. Second quarter net loss will be about $3.2 million, or 17 cents per common share. Youbet.com reported a 17 cents per common share loss during the second quarter of 2000, excluding a one-time extraordinary gain of $3.3 million.
Youbet.com now handles less than 1% of the $16 billion wagered in the United States annually on Thoroughbred racing. If the company increased its market share to 3%, or a handle of about $500 million, then earnings before interest, depreciation, taxes, and amortization (EBITDA) would be about $5 million, according to Fell. If market share increased to 5%, the Youbet.com's EBITDA would rise to about $15 million.
"We anticipate bottom line increases will significantly outpace top line growth," Fell said. "Following the opening of the Oregon hub, we expect substantial revenue growth beginning in the first quarter of next year."
Youbet.com still maintains its original wagering hub through the Call-A-Bet network in Pennsylvania, which is owned by Magna Entertainment. The Pennsylvania hub now handles wagers on 61 racetracks in the United States and Canada.
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