Good morning, everyone. I'm Jane Morgan, the Investor and Media Relations Manager for BetMakers Technology Group Ltd. Today, the company has released the FY 2022 annual results, along with an investor presentation. On the call today, I am joined by our CEO, Todd Buckingham, our CFO, Anthony Pullen, and our COO, Jake Henson. With that said, I'll hand you over to Todd Buckingham to run through the presentation, which was lodged on the ASX today.
Thank you, Jane. Welcome and thank you to everyone for joining the presentation for BetMakers FY22 results. This year's been a real breakout year for us at BetMakers. We've established ourselves as a global company which now operates across more than 30 countries across the world. We've almost 500 staff now and working in 11 offices located in eight different countries around the world. I'd like to acknowledge the entire team across our business for the amazing effort this year. I know that when people look at businesses, they tend to look at the numbers to judge how well a company is going, and we certainly have achieved some remarkable growth on the financial metrics this year. However, I feel our biggest achievements this year has been assembling an alignment of our BetMakers team from across the world.
We've been able to bring together an outstanding team of people to drive this company forward. Some of those we've added Rebekah Giles and Anna Massion to our Board of Directors, who have a wealth of knowledge and experience across legal, governance, and global gaming. We've been able to assemble an amazing, talented group of young executives as well, that have a wealth of experience. Over the last 12-18 months, we've added key members to our executive teams, such as Martin Tripp, Dan MacDonald, Sam Adams, Rajen Sanjanwala, and also Christian Stuart as our U.S. CEO, along with Chelsey Abbott, who leads our P&C team. I say young because I'm the old guy on the team. I say experienced because this generally is all they've done.
They've been around the online wagering industry since online wagering started. These guys have been amazing addition to our team and along with the rest of the BetMakers team, they'll help capitalize on the opportunity that we have created. Beneath our execs, we have been very fortunate to assemble an extremely talented team of people that are helping to drive the business, and I'm excited to see the personal growth of these men and women in the future as they continue to deliver results for BetMakers. I mentioned that in FY 2022 was a breakout year for us at BetMakers, and I truly believe this. We've created foundations that will set us up for many years ahead. We're now seeing the benefits of all the hard work that we've put in over the years.
We have products that are market leading in their own right, but now have the foundation to pull these products together and deliver solutions that we believe can change the industry. A product that will allow our customers to have an edge over their competitors. Our deal we announced previously with News Corp is testament to this. This was a landmark deal for the company as we were appointed the exclusive technology and trading provider for the consortium in a deal that's potentially worth more than AUD 300 million in revenue, over the initial 10-year term. Although we signed 10 years, we expect to be working closely with betr team for many more years than that. We're excited to work with them and their acquisition of TexBet and help them accelerate their market entry.
Some other deals that we executed this year that we'd like to highlight. From Global Tote, we're selected as the tote provider in Norway on a 10-year deal, and we extended our Monmouth Park deal, tote deal for a further 10 years. We agreed to be the tote interface for Caesars casinos across a number of states, including Nevada. We've already launched that deal with Caesars in Iowa. Some other things, we actually launched fixed odds thoroughbred racing in the United States. I know this has been a long time coming and we're excited about it, but there's lots more work to do. Another key thing is we finalized the development and completed our agreement with the Managed Trading Services product.
We'd like to thank the Waterhouse team for helping us get this product off the ground. It will underpin some amazing opportunities for our company, and completing this deal ahead of schedule and the fact that it's outperformed our expectations means that BetMakers gets to receive the benefits much earlier than we anticipated. We've now got 22 platforms live in the Australian market, another seven to go this year, including the betr launch. It's a very successful product and with a major adoption across this market. Look, I understand that our share price performance hasn't been reflective of the success of the company, and I would like to thank our loyal shareholder base that have ridden the wave during this period.
We also feel that the share price is not reflective of what we've achieved as well, and this is the reason that we've announced our share buy-back. We've had some challenges around the timing of this buy-back as we've been in blackout periods due to the accounts going out. We can assure you that we think BetMakers is good buying at the current price, and we'll be back on the boards buying when we're in a position to do so. As I mentioned, 2022 was a great year for us in product development, and we've certainly got the momentum which is strong moving forward. We also did a pretty good job on our numbers, and I'd like to hand over to Anthony to take you through those highlights.
Thanks, Todd. Jane, if you can flip to the next slide. Perfect. Good morning, everyone, and thanks for dialing in. I'm Anthony Pullen, the CFO here at BetMakers. If you joined our 4C webinar about four weeks ago, I don't think there'll be too many surprises in the results we're presenting today. I'll run through them, and through some of the key takeaways. As Todd mentioned, it's been a huge year for the company, and I think that's clearly reflected in the numbers we've reported.
Revenue of AUD 91.7 million, which is up 371% on the prior year. A lot of this growth is a result of the strong domestic traction we're seeing in our platforms and Managed Trading Services business I've mentioned, and also reflecting the full 12 months of owning the racing and digital assets we acquired from Sportech. The gross profit of AUD 66.3 million is up 550% on prior year, representing a gross profit margin of 72%, which we feel is sustainable based on the current product mix. Adjusted EBITDA of positive AUD 2.2 million.
In coming to this figure, we've excluded share-based payments of AUD 71 million, which I'll cover in more detail shortly, and deal costs of AUD 16.5 million, of which AUD 15 million represents the advisory payment in relation to executing the NTD wagering deal. Also worth highlighting, within the adjusted EBITDA figure, there's approximately $5 million of costs we've incurred relating to growth and specialist advisory fees. These are costs that we've incurred during the period, which we see as relating to accelerating the business growth. Third-party advisor fees, which we don't expect to be recurring, and also investments we've made into new business where we don't have the corresponding expected revenue as yet.
I think it's also worth to be completely clear with everyone, we take a pretty conservative approach in our staff costs, and we expense them all in the period in which they're incurred. We don't capitalize any of our staff costs, and so the amortization you're seeing going through the P&L relates to booked assets which we acquired through various transactions such as Sportech and Dynamic Odds, et cetera. If we can go to the next slide, please Jane, and I'll quickly run through the share-based payment expenses. It is quite a material amount. We wanted to provide a little bit more context as to how we're getting to this figure under the accounting standards. Simply put, when we look at the fair value of.
We need to look at the fair value of the equity instruments as at the grant date. The total expense we need to recognize is simply the fair value of each equity instrument multiplied by the number of equity instruments which are expected to be issued. We then recognize this total expense across the expected life of each grant tranche, which we have to reassess at each reporting date. As you can see, the biggest contributors to the expense in FY 2022 relate to the Tripp strategic deal performance rights, which vested on the NTD deal signing, and the Waterhouse performance rights, which vest based on the revenues we generate under the associated commercial deals. As at 30 June 2022, we've recognized all the expense in relation to the strategic deal and the Waterhouse agreements.
Looking forward, we don't expect to see any further expense in relation to these two tranches. The share-based payment expense should reduce significantly in the future. Or not for you, Jane, but if our listeners look at the back of the presentation, we've also got an abbreviated balance sheet and cash flow in the appendices. I won't go through them now, but just to highlight, we finished the year with AUD 87.6 million cash and no debt. Jane, if we can jump forward now to the GBS slide. One more. Yeah. Perfect. As we've noted before, we look at business and report across three key divisions being Global Betting Services, Global Tote, and Global Racing Network.
I'll just jump through each of these divisions quickly to give a bit of an overview on the financial performance of the year and where we see them heading. Firstly, we've got Global Betting Services. This division generated approximately AUD 40 million in revenues for the year, and up 179% on the prior year. This growth has primarily been driven by our domestic platforms and Managed Trading Services operations. We're seeing really good traction here in Australia. Todd mentioned at the beginning, but we've seen the number of active clients more than double during the year just gone.
We're continuing to invest in this division and expect strong growth into 2023, FY 2023, both on the back of further domestic growth, which includes the NTD deal, and also in overseas markets where we feel they could also benefit from this product. On the next slide, we've got the Global Tote division. This is really a large portion of the racing and digital assets we acquired from Sportech at the end of FY 2021. Hence, we're seeing a full year of operations in FY 2022, which contribute approximately AUD 47 million in revenues. We see this division as a strong core of recurring revenues for the company. The contracts tend to be longer term in nature and far less volatile.
In saying that, we had a really good FY 2022, and we've executed some key deals, such as in Norway and Caesars. Looking forward, I think our forecast for FY 2023 and our focus is really around consolidating those gains we've made through FY 2022, and continuing to build out our tote integrations and co-mingling opportunities. I think we expect to see the results come through in full, probably more in FY 2024 and beyond. Lastly, we've got the Global Racing Network division. This is work we're doing with the racing bodies to distribute their content for fixed odds wagering. Similar to Global Tote operations, this is about building up our content offering and the bookmaker integrations for fixed odds. You know, deals such as our national distribution deal, which we announced.
I think it was end of June. Those types of deals feed right into this division, as does a large contingent of our U.S. fixed odds model. We did about approximately AUD 4.1 million in revenue for FY 2022 in this division, and while off a small base, we expect to see strong growth into FY 2023. I'll now hand across to Jake to run through the strategic focus for FY 2023.
Thanks, Anthony, and thanks everyone for tuning in. General theme across the focus for the divisions is certainly around execution. Thanks in part due to the deals that were completed throughout the last reporting period, and execution of those deals, and that pipeline, we feel sets us up strongly for growth going forward. Speaking more specifically about a few of the divisions within the GBS division, there'll be the launch of the NTD platform and also the onboarding of other contracted MTS partners. We also are really keen to expand the BetMakers' new proprietary next-generation software, and we believe that this will deliver new growth opportunities and new deals that will help fill the pipeline for 2024 and 2025.
In the Global Tote division, it'll be the launch of our Global Tote Hub. It will be the rollout of our BetLine terminals, which are fitted out with custom proprietary BetMakers software that enables us to deliver products beyond just the pari-mutuel solution, but also fixed odds sports and racing for our partners. Basically enable them to fit out a white label solution in venue or at a racecourse. Also the further integration of our Global Racing Network content via the Hub, setting up pools for that wagering. Also important to call out here the execution of the Norway tote deal, which is a significant build that is a 10-year deal. The focus for our team here is on getting that all wired up and into place.
We can start recognizing revenues for that moving forward. Finally, on the GRN side, this has expanded quite quickly in the last three to four months as highlighted by Anthony and underpinned by the Penn National Gaming content. Our focus for us is certainly on delivering that far and wide over the next 12 months, and also acquiring more content to add to that mix. Certainly the rollout of fixed odds within New Jersey and other states will tie into this as well as we deploy our reporting, integrity, and distribution services into these markets and ensure that the horsemen, the regulators, and all the participants can benefit from the growth of what we think is a very exciting segment.
With that, I'll hand back to Jane or Todd, because I'm sure there's some questions that we'll work through.
Thank you for that, gentlemen. We have had lots of questions come through, and we do encourage webinar attendees to use the Q&A function at the bottom of the screen. I might kick off with you, Todd. Was the buy-back strategy implemented to combat the high level of shorting? And if so, why has the buy-back stalled only after three days of buying back shares?
Mute, Todd.
You're on mute, Todd.
Thank you. To be fair, the buy-back is purely based around the value of where we see BetMakers. We've done an amazing job this year of executing on some deals, and we've got some, you know, very strong thoughts around where the company is going. Obviously, we've ticked off those deals, and if we execute on those, then we're gonna see some good growth in the business. We see the value of the share price at the moment as good value. We'll be on the boards when we're able to. We've had it stalled in regards to, you know, we did a few days, and then the market stayed ahead of us.
Obviously restrictions around what we can and can't do in terms of the share buy-back. Obviously we hit a period before accounts that we couldn't do any buying as we were in a blackout. We're back out of that next week, and hopefully we'll be starting to buy again.
Thanks, Todd. Jake, one for you. Are we expecting more deals to come through that will add to the growth outlook?
Yes, certainly. I think a lot of the presentation and theme from us is around execution. That's because we have signed a lot of deals throughout the previous period. The other exciting thing for us is, with those deals, the investment and growth of a lot of our new solutions. I've obviously called out the next generation platform as well as the BetLine terminals and what we're doing there as well. We expect that to drive more opportunities and more business. The other thing with that, I think as you've seen throughout the period, BetMakers has been able to sign long-term partnerships with global players and serious global businesses, and we believe this is a good endorsement of what we're pulling together and will help obviously drive that sales and partnership network.
Todd, I'll head back to you for this one. What is the update on the U.S. and is it still part of strategy?
Yeah. Yeah, certainly Jane. There's no doubt that the U.S. has taken us longer than we've anticipated. We're still 100% committed to the U.S., and we still feel this is one of our greatest opportunities as well. The industry over there is working itself out, and we're literally in at the ground level. This year, our key focus for the U.S. is unlocking this opportunity, and when it does, we'll certainly be ready. I believe we're in a very early stage of the U.S. sports betting market, and it's very similar to what Australia was some 10 years ago. Our advantage or BetMakers' advantage is that we've been able to experience what unlocking a market looks like. We've lived through it. We've built products in this market, and we've competed in this market.
The team we've assembled not only understand this, but we're preparing for it. New Jersey is the pioneer state in regards to sports betting, and obviously now, with the launch of fixed odds on thoroughbreds, and we've put our flag in the ground there, and we're very grateful for how welcoming they are and have been to all of us here at BetMakers. I think the sports betting market and the racing market, in particular, will evolve. When the industry understands the opportunity that lies ahead, we'll see some amazing growth throughout the U.S., and obviously, we've positioned BetMakers to be part of that story as well.
Thank you. Just staying with the U.S. now. Do we have figures on the number of downloads, from the Monmouth Bets app?
Yeah, the app hasn't launched in Monmouth yet. It's just the Monmouth Bets mobile site and website. The app will launch over the next month or so. That's where we'll sort of introduce more content, so out-of-state content onto the app. We'll be able to give you some more updated figures towards the next quarterly.
Just on to the News Corp Betr app. When do we expect the News Corp consortium to launch the Betr app?
Yeah, I'm happy to take that. Look, yeah, we're working very hard on the app, on the application. Betr is keen to launch as soon as possible. There's some things to tick off, obviously, from regulatory and compliance and also the development of the app. You know, we expect it to launch before Spring Carnival, and we're working hard to make that happen.
Thank you. Anthony, there's a couple for you that's come up. Do you see further improvement of the gross margin of 72% going forward? Can you comment on the company costs? Do you see this flattening out in the future?
Yeah, sure. On the gross margin, 72%, somewhere around about mid-70s, I think is about right for our current product mix. Then in terms of additional costs and flattening out, I guess that's speaking more to EBITDA margins today and into the future. With regards to flattening out, look, I think there will be some growth going into the future because we, as a company, certainly haven't finished growing. I think the more important point is the cost base we've got today is to support the business for what we think it'll look like in 6 to 12 months. We think as this pipeline comes through, as Jake spoke about earlier, we definitely hope to see some leverage start coming through in FY 2023 at an EBITDA level.
Thank you. Just another one for you, Anthony. Do you have company guidance for this current financial year?
No, we haven't put anything out there. I think there's four or five analysts which are covering the stock at the moment. What they have put out there in terms of their projections, I think we're quite comfortable with. That's probably the best indication.
Thank you. Just another one. Roughly, what percentage of the 2022 bad debts have rolled on from 2021? What contracts do these overdue accounts relate to?
Yep. With regards to provisioning for bad debt, we generally look at anything, you know, start providing for it sort of 60 days or older. Luckily enough, there's actually not many customers at all, which we're concerned about, and those which are somewhat in arrears are still actively engaged with us and, you know, sort of working through a payment plan. In terms of exactly who they are, I don't think that's relevant for this webinar.
What is the relationship with the NYRA? The media reports would suggest that the NYRA are trying to set up their own system. That would negate any requirements of BetMakers. Maybe perhaps one for you, Jake.
Yeah. You go, Todd. Yep.
I'm happy to jump in on that. The NYRA announced that, yeah, they've joined up with CDI as a customer of United Tote and bought some of the tote for that. It's quite exciting for us that they're talking about bringing the product and integrating with the sportsbooks. That's the evolution of the market that we're talking about. That's what we need. You know, we need these tracks to understand the opportunity with these sportsbooks, and that's where we feel is. Once this starts to roll and these guys are starting to talk like that, then they'll realize that that's where the opportunity is.
Obviously we're there to assist with the operators like we do here in Australia.
Thanks, Jake. One for you. Can you please put a little bit more color around expectations for other states to introduce fixed odds wagering probably over the next 6-12 months, and even more so when New York might introduce?
Yep. Certainly we've seen a bit of a catalyst in the last six months, and certainly off the back of launching the product both on track and online. States get a lot more active in their discussions around fixed odds and obviously how they can structure legislation or regulation to ensure that everyone within the state participating in horse racing is rewarded as part of that. As a business, we're in discussions with those horsemen's groups as well as regulators, to ensure that the path they're taking is in line with our learnings in other markets, to ensure that everyone is rewarded and it's sustainable. There's various states that have pari-mutuel betting at the moment currently, as well as fixed odds sports betting.
They'd certainly be logical places where the rollout could occur.
Like everything in the U.S., there are some intricacies between markets. New Jersey, for example, was structured as a racing bet, which sits outside of sports betting legislation. The reasons for that were that was because we thought that was the best way to ensure everyone in market got appropriate returns and had appropriate control over their content and what the bookmakers were doing. It's definitely been a catalyst. The exciting thing is there's 35 states that bet pari-mutuel in the U.S. and there's growing past 25 that are now sports betting fixed odds. The pipeline is quite strong for what could roll out.
Thanks, Jake. I'll stick with you for this one. A webinar attendee just stated that they believe there's over 30 sportsbook operators in New Jersey. Apart from PointsBet, have any other sportsbooks signed up for the BetMakers fixed odds offering?
Not as yet. That will obviously be announced, if and when anything is material in that space. Our focus has been on launching through the partners at Monmouth Bets and Monmouth Park. That's obviously been a long process, but happening on three fronts. To roll out the on-track solution and the integration into point of sale was part one. The website and responsive was part two, and then the mobile app's part three. We believe that's the best way to roll out this product, is to give all the players in the state a sample of how it can look with Monmouth Park. Then obviously for us, it's about acquiring the content and the rights to really accelerate that.
From there, the operators will chime in when they're ready.
Anthony, I might hand to you for this one. How many BetLine terminals have been built and currently in operation, and how many more units will be purchased and in operation globally by the end of the financial year 2022, 2023?
Yeah, sure. Obviously, a significant investment for us over the last 12 months. I think we invested around about $15 million into hardware, primarily for use in the U.S. market. The BetLine terminals, I think we purchased about 3,500 pieces of hardware, and we've probably got about half of that in transit or on the ground in the U.S. already. Internally, you know, our next wave of execution is taking those pieces of hardware out on track and making a decision as to where we place them. Looking forward to FY 2023, we're expecting that CapEx investment to reduce to about $6 million for FY 2023, and probably around about $3 million thereafter on a sustainable CapEx investment basis.
If there is any sort of deviation from those expectations, then we'd expect to see significant contracts supporting that additional investment.
Thanks, Anthony. Todd, I'll hand to you. As a management team, how do you measure your performance, and what metrics as shareholders can we view that help assess how the business is tracking?
Yeah. It's thanks for the question. It's basically off Jake's slide that he went through, the strategic execution of the deals that we've got in the market. You know, we've got our list of internal executions that we need to do and KPIs, but they're all based around making sure that those deals get into the market and are successful. That's how we measure ourselves. Obviously, you know, this year we've done a really good job in terms of increasing our base. Last quarter, we ticked over to annualized revenues of AUD 100 million per year. An amazing achievement for our business and growing so fast. We'd call that success. Moving forward, it's all about execution.
Getting the deals that we've announced and getting those into the market, and we'll see opportunities create off the back of that as well.
Thank you. Gentlemen, bear with me. There's quite a few coming through. Jake, to you now. What is the plan for Swopstakes and FormCruncher?
Yep. Speaking to both those, Swopstakes is a product that we've been integrating into our B2B environment. Reason behind that is obviously our acquisition of the product. We see great global application for the technology, the bet type. It's new, it's innovative, and it gets in front of customers that potentially aren't betting on horse racing yet, but will in the future. The logic behind that is there, and for us, it's about integrating into our suite so we can apply it to the mass market. That is through embedded technology for international sports books, but also into our platforms domestically. With that, obviously there's certain licensing and regulation that we need to go through to ensure that's all set up. We've been working through that.
On the FormCruncher side, that business is deployed within the B2B ecosystem. It has been for quite some time now. It's powering some of the content throughout our Managed Trading Services division, but also our proprietary pricing and ratings engine, which we use for our MTS division. Already fully integrated, and helping us drive new business and existing revenue.
Thanks, Jake. Todd, one for you. Any merger discussions in the pipeline, and is BetMakers looking at the Tabcorp eBet business?
Yeah, no, not at this stage. Yeah, we've got a lot in front of us on the deals that we've announced. Again, we're just concentrating on that at this stage.
Wonderful. Look, gentlemen, I think we've actually covered all of the questions there. Thank you all for joining us today for the BetMakers Investor Webinar. A copy of today's recording will be available on our website and across our social media platforms in the coming days. If we have missed any questions, please feel free to reach out via the contact details on the bottom of our ASX for announcements. Thank you all for joining us.