Betfair Reports 2013 Losses of $75 Million

Impairment on asset values led to losses for operator of leading betting exchange.

After making more than £50 million in fiscal year 2012, Betfair lost more than £50 million in fiscal year 2013.

England-based Betfair, the world leader in betting exchange technology and owner of U.S.-based advance deposit wagering platform and racing channel TVG, reported the £49.4 million ($75.4 million) loss in its annual report released June 27. The report covers the fiscal year ending April 30.

The Financial Times reports an £82 million ($125.2 million) impairment on asset values, which included charges related to "weaker-than-expected outlook for acquired businesses as well as a writedown of the value of its technology."

Betfair reported underlying revenue of £387.0 million ($590.8 million), which was flat compared with 2012; and underlying profits of £38 million ($58 million), down 16.1% compared with last year.

Regulation of the betting exchange, including the company's withdrawal from Spain as well as negative impacts in Greece, Germany, and Cyprus, proved to be a drag on revenues. Betfair chief executive officer Breon Corcoran said the year proved to be one of transition for Betfair, which recently launched fixed-odds wagering it hopes will attract new customers who may have been intimidated by the exchange.

"This is a solid set of results in what has been a year of transition for Betfair," Corcoran said. "Revenues lost as a result of changing regulation have been largely replaced with regulated, more sustainable revenues."

TVG reported fiscal year revenues improved 5% compared with 2012 with $48.2 million in revenues contributed from wagering and $9.8 million from television operations.

In March, TVG entered into a five-year exclusive agreement to offer ADW in New Jersey through the 4NJbets platform, the only licensed online horse wagering site in the state. Since taking over that platform, TVG has modernized the product offering, helping drive increases in wagering volume.

Betfair said TVG registered $4.4 million in profit (EBITDA) compared with a $1.4 million loss last year.