Webis Holdings PLC Update on USA trading and licensed gaming strategy (5377E)
October 19 2018 - 2:00AM
UK Regulatory
TIDMWEB
RNS Number : 5377E
Webis Holdings PLC
19 October 2018
Immediate on 19 October 2018
Webis Holdings plc ("Webis")
Update on USA business trading operations
and USA licensed gaming strategy
The board of Webis, the Group specializing in pool wagering and
the operators of WatchandWager Cal Expo, the Californian harness
track, wishes to update shareholders regarding the operations of
its principal USA subsidiary, WatchandWager.com LLC
("WatchandWager").
WatchandWager has no option other than to assume, with immediate
effect, the cessation of wagering services to a syndicate (who are
unable to be named under confidentiality restrictions) following a
commercial dispute. Consequently, WatchandWager have refunded the
syndicate's player balances, totaling approximately US$ 10.0
million. In the absence of any new deposit funding, under
regulation, no further wagers can be accepted from this syndicate.
While this development will have no effect on the year-end 2017
financial statements due to be published in November 2018, the
board anticipates that the reduction in gross margin for the
financial year ending in May 2019 will be approximately US$ 0.8
million. Post refund, the current cash on the Webis Balance Sheet
stands at just over US$ 3.1 million.
Following this development, WatchandWager are in the process of
streamlining the operation and implementing additional business
efficiencies. With the continuing support of Webis and its
principal shareholder, WatchandWager will concentrate on
implementing the following strategic objectives: -
-- Secure replacement business-to-business clients.
WatchandWager have successfully taken on a number of new clients
and are in advanced discussions with a number of other potential
leads. While these initiatives alone are unlikely to replace gross
margin in the short-term, the early indications are that the
current client base is both wagering successfully and growing in
scale. This strategy does have the benefit of removing the primary
business risk, being that of concentration and over reliance on one
single entity;
-- Continue to renew and acquire further US state regulated
gaming licenses and increase meaningful customer content.
WatchandWager have identified the US states in which it wishes to
trade and is currently in the process of making license
applications;
-- Continue to develop and expand the Cal Expo racetrack
operation. WatchandWager will implement a number of new initiatives
for the forthcoming season starting in November 2018, including
selectively increasing prize money to attract additional horsemen,
hence growing the field sizes for the benefit of players;
-- Seek suitable strategic partnerships and associations to
broaden the business-to-consumer offer, including adding further
content to the watchandwager.com app and website. The consumer
client base is developing in line with plans and is already showing
an increase in gross margin on the previous year; and
-- Position WatchandWager to take full advantage of the
anticipated regulatory change to allow sports betting in
California. The fact that WatchandWager is licensed with a
regulated settlements process and operates a racetrack, means that
it is entirely compliant to commence sports betting as soon as
state legislation allows.
The board will continue to update shareholders as to progress of
the State of California's adoption of sports betting
legislation.
Ends
For further information:
Webis Holdings plc Tel: 01624 639396 Beaumont Cornish Limited Tel: 020 7628 3396
Denham Eke Roland Cornish/James Biddle
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END
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