“The global gaming market is evolving,” said Champion during a conference call with analysts that discussed fourth-quarter and year-end financial data for 2006. “Their public statements indicate that the venture’s purpose is to expand the delivery of horse racing content, and not limit it.
“Churchill’s earnings release yesterday made note of the need for an open business environment that rewards distributors of racing content who are most successful in competing for, and servicing the needs of customers,” he continued. “We agree with that sentiment, and with one of the largest, most active player bases in the industry, we feel that Magna and Churchill’s best interest will be best served by making their content available to our parimutuel wagering audience, just as they have in the past.”
Youbet reported a $5.1 million loss in the fourth quarter of 2006, some of which was due to $2.3 million in what was termed non-recurring operating expenses. Included in the one-time expenditures was a “favorable” arbitration payment of “less than $1 million” the company made to TVG in the fourth quarter, settling what Champion termed a “must-win” legal battle over exclusivity rights.
Total handle grew 62% in 2006 to nearly $763 million, bolstered by the full-year operation of International Racing Group, which Youbet acquired in June 2005. Of the total reported annual handle, $463.7 million was attributed to Youbet and $299.2 million to IRG.
Net annual revenues grew 59% to $44.3 million, augmented by $8.6 million contributed by United Tote, which Youbet acquired in February of last year.
Youbet also announced its intentions of executing a $10 million stock re-purchase effort of not more than 2 million shares, a plan which was approved by the company’s board of directors, and awaits approval from its creditors.
“The authorization reflects the belief that our stocks are selling at below market value,” Champion said.
Youbet stock closed March 13 Nasdaq trading at $2.84 per share.