Good afternoon, and welcome to the XLMedia PLC interim results investor presentation. This is a recorded presentation, investors will be in listen-only mode. Questions are encouraged, can be submitted at any time via the Q&A tab situated in the right-hand corner of your screen. Click Q&A, simply type in your question, and press Send. The company may not be in a position to answer every question received during the meeting itself, however, we'll review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. Now I'd like to hand you over to David King, CEO. Good afternoon, sir.
Good afternoon, everyone, and welcome to the half year results update. I'm David King, I'm the CEO, and I'll talk you through the business and the strategy update, and then I'll hand over to Caroline Ackroyd, the CFO, who will talk you through the financial results, and I will then briefly return to talk you through the next steps and the rest of the year. I think, as you know, our purpose remains to operate a small number of selected brands, create great content, engage with the audience through brand and through search, to meet their needs in search, and fulfill those needs, and consequently introduce them to relevant advertisers, which then enables us to generate revenues. Let me just run through briefly the business highlights, but before we get to the numbers, a short recap.
So, we remain with a very clear focus on Sport and Gaming, with North America and Europe as our primary markets, with owned and operated and quality partner sites as our vehicles to engage with audiences. We continue to deliver strong margins, and we have returned Europe to growth. And again, just as a gentle reminder, we are live in about 19 states in the U.S., and there are still 21 states that are yet to legalize online sports betting in North America, and of course, that presents an opportunity, and they include California, Texas, and of course, Florida, the three largest states in North America. Also, an opportunity in North America, of course, remains the 45 states odd that have yet to legalize online gaming.
So we are primed to participate in that growth, in that opportunity when it comes. Financial highlights, continuing revenues, just so everybody is clear what that is, that excludes the Personal Finance business, which we sold, Blue Claw and other assets that we have sold or exited, and therefore it reflects the business that we have now and the business that we go forward with into 2024. Now, while revenues were down against H1 2022, as anticipated, and indeed, as we have previously indicated, there would not be linear growth period on period or indeed, year on year, particularly a result of the nature of the North American market, and I'll say a little bit more about that. Importantly, across the two years, we have delivered growth in our continuing revenues, up 18%, across the two years.
Now, as I said, I'll say a little bit more. New York was obviously a very significant impact in 2022, and we'll come on to a couple of slides that show that impact in a moment. There was a very substantial pent-up demand when New York went live in January 2022. There was also a new operator in the market who was buying market share and the competition then with that operator, which meant we were up, we were up over 400% between 2021 and 2022 in U.S. sport. That is the primary reason why we've seen a revenue fall from H1 2022 into H1 2023. Operators are now more focused on profitability rather than market share.
Plus, of course, the fact that the state launch in New York was much larger than the equivalent state launch in 2023. We will, of course, continue to benefit from state launches, and I very much see that as the sort of the incremental periodic profits that can be generated over and above the sort of underlying profits that come from the recurring revenues that we drive in the remainder of the business. In terms of EBITDA, well, again, across the two years, we were up 92% against 2021, but of course, down against 2023 for the reasons that you can see. North American Sports revenue was down about 45%, for the reasons I've already described.
And as a consequence, the reduction in revenues in North America are the reason why we've seen a reduction in period-on-period profits. But as I say, that was anticipated and had previously been indicated to the market. The next slide, the continuing business showing the 18% growth. On the right-hand side of this chart, you can see the reconciliation between the headline group revenues and then the continuing business revenue that I've already described to you. And you can see here the half-on-half performance on the sheer scale of the spike that we had already reported in 2022, that you saw as a result of New York launching. And you can see, therefore, that there is-...
underlying growth, although the individual states and the number of states that launch in the North American market in any particular period obviously has a very significant bearing on the overall period-on-period growth. Now, as you know, in the North American market, it remains primarily a CPA market, so that means there's a one-off acquisition payment for introducing a new customer. And state launches remain very important to us, but that combination of CPA nature of revenue and state launches means that it's important for us to continue to build recurring revenues. They remain small at this point.
However, and I think importantly, we do have a balanced portfolio in the sense that we are starting to see growth, as I, as I said, in our European assets, and that's an important part of building our recurring revenues, while we still enjoy benefits of spikes, albeit, they don't happen in every single half. The next page, the RMP trends, I think, again, to give you the flavor of the new customers that we deliver. And you can see back in, 2021, you can see the size of number of RMPs, and you can see again, the impacts of the activity in H1 2022. Again, I think the chart tells the same story as you've already seen. But importantly, as you can see, we have an underlying trend in growth in, customers that we deliver to the market.
It's important part of our overall journey is to continually deliver new customers to operators, and included in that is slowly building up the number of customers we deliver that are delivering and will deliver future revenue share. We did see changes in operator activity in the market, and that did impact RMPs and, of course, revenues on the previous slide. Change in operators spend patterns. One operator participated at the beginning of the year, but then temporarily exited the market and is now coming back into the market very shortly. I'll say a little bit more about that in a moment. The other operators, as a whole, generally targeting their spend. One operator, for example, not spending at all on acquiring customers in New York.
Majority of operators taking customers where they come in New York, but not actively pursuing them, largely because of the local tax rates that already exist in that marketplace. We run on to business mix, then. Again, there's been a slight change in the mix. Obviously, the growth in Europe and the impact of the period-on-period reduction in North American sport, while retaining sport as 74-odd% of the business. You can see that Europe has obviously grown as a proportion of the overall business, as you would expect. And, as a result of that, of course, you can also see that the hybrid revenue share component of our business is obviously increased as a proportion of the business, as has owned and operated in our entire European portfolio being owned and operated.
But we remain sport-led, we remain U.S.-led, and at the moment, we remain CPA-led because of the relative weight of the North American market. But of course, we are extremely pleased with the performance in our European business. We've now got that as we overall back into growth, led by our three main brands, Nettik asinot, a casino brand, WhichBingo, a bingo brand, and Freebets, a sports brand, all showing period-on-period growth in the European market. Now, important thing about those are, when you introduce a new customer, not only do you benefit from the initial upfront payment in the European market from that customer introduction, you also benefit from the future profit shares from that customer's activity with that operator over the lifetime of that customer spending. So we're building future revenue share, or as it's often referred to, future tail revenues.
That's a very important future component from the activities we've had in the period. Our strategy remains, as we have described it, around three areas: our sports media brand, particularly in North America, sports, our Saturday Down South brand. We think this is extremely well-placed for when recurring revenues, when revenue share becomes a more significant part of North America. At the moment, as I said, it's principally CPA. But as we cut up, we talk to the audience before, during, post, and between games, when there is more revenue share opportunity with more operators. We believe that will be an opportunity to grow our recurring revenue streams.
And then, just as a note, of course, Saturday Down South is a very, very strong college brand, and there is information to suggest in the North American market that up to 40% of betting is around college football. At the moment, of course, as I said, we then enjoy participation in the bet, we enjoy participation in the marketing. Sports betting, obviously led by our Freebets brand and Sports Betting Dime in North America, both in growth period-on-period, as Sports Betting Dime was up 13%, period-on-period, as a result of our renewed focus on this national North American Sports brand. Together with our partners in North America, we think we have a balanced portfolio, owned and operated, and media partners reaching the relevant markets.
Of course, in our gaming brands, which are almost entirely based in, in Europe, we again have two growing brands, which represent nearly 50% of the revenues from that market. In North America, we continue to expand our new partner footprint, as we said we would. Excuse me. We now do offer a, a broader spectrum of opportunities for, for bettors, in the sense that we provide daily fantasy sport, which is legal in most states, and is technically not deemed to be betting, but is an introduction to the sort of concept, as, as a new opportunity that we, engage with. And of course, as I said earlier, we've entered revenue share with a number of operators in that market, albeit that's relatively small at this point. bet365, Betway, excuse me, Hard Rock, and, PointsBet.
We're focusing on a smaller audience now, a more high-intent audience, with a view to improving the conversion rates that we can deliver from the resources we direct to it. In Europe, I won't repeat it, but we are clearly seeing very strong growth, and we expect to see that continue in Free bets, and iGaming, the focus on these two core brands, WhichBingo and, Nettikasinot, we expect to continue to see further strong growth. To summarize this for you on this slide, on slide 11, obviously, we are in the game of building out sustainable revenues. We're basically looking at North American CPA as one-off revenue, and the rest of the business is largely, repeatable, and therefore we treat it as largely recurring.
We have put in place new partnerships in order to maximize revenues from new state launches, and we continue to grow our audiences in order to serve those audiences through that route. I won't read through every single one of these, but if I just point to the middle right, we've expanded our footprint in Freebets, and we expect to be able to expand that further. We have launched a racing widget in Freebets, which we've seen very strong performance from, and we've got Tom Bellamy as an ambassador for our racing. And as a result of that, we are seeing very, very strong performance at all the major racing events, such as Cheltenham, where we see a very significant pickup in our new customers.
Let me hand over now, if I may, to Caroline, and she'll run us through the numbers.
Thank you, David. For the half year, we generated GBP 28.8 million in continuing group revenues. This actually excludes our Personal Finance assets, which were held for sale at the end of the financial year, and those have subsequently been sold in this half. Adjusted EBITDA for the half year was GBP 6.9 million. This declined period-on-period, as we expected, as this half includes state launches in Ohio and Massachusetts, which were smaller in size than New York, Louisiana, and Ontario. Our cash balances reduced from GBP 10.8 million at the year-end to GBP 7.4 million, and this was due to cash funding required for earn-out considerations for CBWG and historic taxes relating to 2016-2020, which were paid in the half year and amounted to GBP 2.8 million.
Our discontinuing activities of the business, which included the Personal Finance assets, resulted in total group discontinuing revenues of GBP 0.6 million and the associated loss of EBITDA of GBP 0.4 million. Moving on to the progress we've made in our Sports and Gaming segments. Sports remains a significant percentage of our overall revenues, at 74%, with North America being 76% of Sports revenue, and that's in line with the group's focus on being sports-led in the U.S. While we continue to rebuild our European casino assets and diversify into iGaming in the U.S., the Sports vertical generated GBP 21.4 million. That was down 37% period on period. We continue to make progress in the U.S., although the revenues are impacted by those state launches.
U.S. Sports generated $16.2 million from both its owned and operated websites and its media partnerships. To break that down further, we generated $12.2 million from media partnerships and $4 million from owned and operated websites. Both our U.S. owned and operated websites and media partnerships have declined period-on-period, as I've explained, largely due to those states' launches, which were smaller customer acquisition opportunities for operators, particularly given the relative sizes of those state launches, New York being the fourth largest state versus Ohio being the seventh largest state. We did, however, see strong performance with our new partner, cleveland.com, in Ohio, which was signed up in the prior year.
However, MassLive launch in Massachusetts was dampened due to the late launch date being at the end of the NFL season in March, and some uncertainty of how affiliates would operate in the market. European Sports grew overall, revenues improving to GBP 5.2 million in the half, including. That includes revenues from it, which remain from a slimmed-down sub-affiliate network. Europe remains the main gaming region for the group, with revenues of GBP 7 million, and this accounts for around 90% of the Gaming revenue in H1 2023. Gaming revenues declined by 14% period on period to GBP 7.4 million, and that's largely impacted by the decline of tail revenues from those websites, which were originally affected by the Google penalties and are no longer in operation.
However, we are now seeing growth against H2 2022, so believe the E.U. Gaming vertical will grow year-on-year going forward. Just as a reminder, the business has made no acquisitions during the last financial year, so we treat all of our revenues generated as organic growth from our owned and operated websites across all our verticals. Just moving on to the core revenues split by market. In the U.S., we generated $30.2 million in Sports revenues and $0.4 million in Gaming revenues. Period-on-period, the U.S. vertical declined, as I previously stated, around the state launches, but there's also been some shifts in the market. As David has mentioned earlier, an operator temporarily left the market and is expected to be back in the H2.
We have seen some positive traction in Sports Betting Dime, one of our sports websites, sports betting websites, which grew revenue by 13% in H1 2023, and total unique visitors by 120% period on period. Also, for our Saturday Down South brands, we've expanded the revenue and diversified that into daily sports fantasy offers. European Sports revenues improved to GBP 5.2 million, and we've seen some positive growth from our primary website, which is freebets.com, which grew by 37% period on period. Gaming revenues declined by 12%, largely due to those tail revenues as previously discussed. However, our marquee brand, Nettikasinot, grew by 5% and WhichBingo more positively by 38% period on period. Moving on.
The U.S. market has continued as a largely CPA-led market, whereas the Europe market continues to operate as a mixture of fixed, hybrid, and revenue share deals. As a result, CPA revenues accounted for 59% of core revenues, declining from 67% in the prior period. Revenue share has increased to 41% of the total revenue, and this is largely due to an overall decline in the U.S. revenues as a percentage of total revenues. As the U.S. market continues to develop, we have started to see some hybrid revenues and revenue share deals offered and expect this to grow as a proportion of revenues over time.
However, we continue to drive high-quality RMPs for our customers, and therefore our CPAs have remained strong over the period, with U.S. rates remaining at $350, and E.U. Sports and E.U. casino gaming growing period-on-period. Our gross margin over the total business was 48%, which was slightly below our expectations, and this was mainly impacted by the North America Sports vertical. Just as a quick reminder, gross margin is defined as a margin, as a percentage of revenue after deducting associated content, technology, and marketing and people costs. North America Sports generated around 31% of gross margin for the half year. It's mainly impacted by the factors that I've already explained. E.U. Sports gross margin performed above expectation at 70%, and that's impacted by strong performance over the racing festivals and on-site content conversion.
The gaming gross margin was 76%, and again, benefiting from the strong growth on Nettikasinot and WhichBingo new customer acquisition. Cost reduction or cost management. Our operating sales and marketing cost base, if you exclude our media partner revenue share, the transformation costs and the share-based payments fell from GBP 19 million- GBP 13.8 million, and that's from continuing operations, providing cost savings of over GBP 5 million, GBP 4 million of those on a sustainable basis. Operating costs of GBP 12.7 million included around about GBP 1 million of reorganization costs and GBP 0.4 million of share-based payments and has reduced from GBP 19.4 million in the prior period, prior period. We have significantly made progress during the year to reduce staff costs from GBP 11.3 million- GBP 8 million, with overall headcount reducing from 193- 167.
We're now realizing the full year benefit of moving roles from those costly jurisdictions and removing the unnecessary management layers that are in the organization. The group has continued to make investment in its technology in H1 2023, incurring around GBP 1.6 million in operating costs in this area, but it's still down 43% from GBP 2.8 million in the prior period. We have reinvested in technology platforms. We've upgraded our website infrastructure last year, and we're continuing to replace legacy technology for data platforms in our finance billing systems. Sales and marketing costs were GBP 2.5 million, a decrease of 19%. The reduction in the costs relates to us rationalizing our content freelance costs, some paid and social marketing costs, in order to optimize these costs on a year-on-year basis.
Moving on to our adjusted EBITDA, which is growing consistently, although not on a linear growth, as David has already mentioned. In H1 2023, we've also seen the changes in the market with operators shifting their investment from acquisition to showing profitability, profitability, and some operators temporarily leaving the market and reducing their customer spending, which has ultimately impacted our adjusted EBITDA period-on-period. Our transformation costs in the half year reduced to GBP 1 million versus the prior year period at GBP 3 million. These costs relate to the closure and sale of those loss-making activities in the period. Moving forward, we now anticipate a much lower requirement to invest in transformation projects as legacy technology is near completion, and those loss-making activities have been removed from the organization.
We have recalibrated our cost base with cash savings of GBP 5-6 million and are now in a strong position for growth. Our cash balances declined by GBP 3.4 million from the GBP 10.8 million cash at the year-end. We generated cash of about GBP 3.4 million in the period. We also received GBP 2 million of funds from the sale of Personal Finance assets. The main reasons for the decline in the overall cash related to funding the GBP 3 million earn-out and further payments have been made in relation to the settlement of the historic taxes with the Israeli tax authorities of GBP 2.8 million. In addition, we've invested in capital projects to replace our data warehouse and build out improvements on onsite conversion. Moving on.
Just as a reminder, in the half year, we paid GBP 3 million of earn-out payments for CBWG, and we expect to make a further deferred payment to Saturday Football in H2. Next year, we're expecting to make earn-out and deferred payments of GBP 7.5 million in 2024. We continue to take a very prudent approach to ensure we have sufficient cash to continue to fund acquisition payments and provide sufficient headroom for investment in organic growth. The business is also considering putting a debt facility in place to support working capital purposes, but also to look at future capital considerations. Thank you.
Okay. Thanks, Caroline. If we then move on to delivering H2. So as I think we've made very clear, H1, obviously, period-on-period, suffered from the huge spike that we saw in H1 2022, and as a result, was down period-on-period, as Caroline has explained. We also saw one of the main operators temporarily exit the market, which further exacerbated the period-on-period comparison. So H2 2023 does not have the same comparative spike with which to battle. And therefore, in delivering H2, there are a number of core components that will enable us to meet the management expectations that we have set.
Kentucky, which launched on the twenty-eighth of September, we have a new partner, which we announced on that day, WDRB, a local TV station, which will enable us to maximize revenues, albeit in an extremely competitive marketplace, in Kentucky, in the state launch. We expect to see a small spike from the revenues in Kentucky. You'll recall last year we had Kansas and Maryland. I think perhaps the single most largest potential impact on the H2 results, relative to H1, and indeed relative to last year, is the decision by PENN to exit the Barstool brand and to invest in ESPN BET, and they are due to return to market in November with a significant spend anticipated as part of their building of their market share.
So that is those two things are very important components of our delivery of the full year and in particular of H2. Obviously, as always, the NFL season itself and the Premier League, and indeed now the racing in the second half of the year, all important parts of delivering that underlying revenue stream. We've signed new partners for the future. So more about perhaps getting out of H2 into 2024, WRAL for North Carolina, when that goes live. I'll say more about that in a moment.
We've signed with the Atlanta Journal Constitution, a very important brand in, based out of Georgia, which would give us a particularly large footprint in the Georgia market when that ultimately goes live, but in the meantime, gives us a reach beyond their immediate geography that allows us, again, to access more audience and ultimately potentially convert more players into customers for our partners. Our E.U. brands that we spoke a little bit about, the growth in those brands period on period, and is expected to continue, and it is continuing into H2, and is a very important part of ensuring that we deliver the full year expectations.
And then, of course, the period-on-period cost reductions that we've talked about, the GBP 4 million of sustainable cost savings that Caroline has referred to, we expect, obviously, to continue to benefit from those savings into H2. It's these things that are essential to our full year delivery, and as I say, a new operator coming into the market with a or an old operator coming back into the market, perhaps being the single largest impact, combined with the benefits that we've already backed, in inverted commas, around cost savings. If we think then a little bit more around moving into 2024, I've already given the game away a little by mentioning North Carolina and WRAL. Very important, we don't know the exact timing.
We very much expect and hope WRAL will go live in January, February time, in order to catch the benefit of the NFL season. As we saw with Massachusetts, a state that went live in March, and to some extent had the opportunity around March Madness, but the arrangements around its go live were such that it was a very, very disappointing new state launch, perhaps the most disappointing we've seen. We don't expect the same thing to happen with North Carolina. We actually think it's just that it's going to deliver a very significant one-off spike, once again, to supplement the underlying recurring revenues and profits that we have. Revenue share, we've spoken a little bit about that in the past. It's a core part of our medium to long-term strategy.
We have, as we've already said, signed up a number of operators. We're talking to some of the bigger operators. Some are not interested in doing it at this moment. But where we can, we will. And of course, just so everybody's very clear on this, instead of taking $300 or $350 per new customer, we'll take a much smaller upfront payment and then participate in the ongoing profits that the operator makes from those customers that we introduce to them.
Therefore, again, that's a reason for having a working capital surplus, because there is a timing change of when we receive our cash, and that allows us to do more revenue share deals, which are for the loop, for the overall longer term benefit, because we will see more revenue and ultimately more profit from those customers we introduce to those operators. Launching online casino in the U.S. is also an important part of our strategy. It takes time to get that right, and we are working with operators to spec out a new site that we will anticipate launch, I suspect, late this year or potentially early next year. Will take time for that site to actually gain traction, build its Google authority and build its audience.
But, we think that's an essential part, bearing in mind that 2024 is unlikely to see any new online casino, states go live, but 2025 onwards may well. And therefore, this—by building out this brand now, we'll be in a position to take advantage of that opportunity when it comes. Similarly, I think in the U.K., we think, and we have, identified an asset that we believe is important to refresh and renew our portfolio in Europe, rather than relying solely on, the two core brands we have and the satellite brands that we also have, like Kasino.se with a K and Kasinot. We are going to launch, again, probably early next year, a, a U.K.-focused, casino brand.
And again, with that to build, and it'll take time to build, we won't say instant revenues of significance, but again, it's part of us taking a bigger, longer term view of our assets. So obviously, building on the success into 2024, we see no reason why the three main brands we currently have in Europe, Freebets.com, WhichBingo, and Nettikasinot, should not continue to grow period on period. They have very strong offerings in their individual markets. They are not huge in their own right, and therefore, contraction in the absolute market doesn't necessarily impact on those assets' capacity to grow and take market share and deliver significant growth.
Clearly, the significant and very substantial growth we've seen from a couple of them in the period is not something we will see forever, but we certainly expect to see very strong growth above the market growth on those assets in 2024. We'll continue to invest in our data tools. We use those very effectively around our core assets, such as Nettikasinot, WhichBingo, by way of example. The tools which allow us to rank the way in which we put different books in front of potential new customers using our own internal algorithms to allocate different metrics against those brands, working out which brand to present, where in the list of options that we give to our customers. By way of example, the first two weeks of applying it to WhichBingo, we saw a 9% increment.
Obviously, it goes up and down a bit, but we saw a 9% increment in conversions. So people clicking on and then clicking through, up 9%. So these are very important tools, and as we refine them, we would expect to see further improvements in our conversion rates. And it goes without saying that we will continue to focus on cash management and cost management in order to get the right size of cost base to reflect the nature and shape of our income streams. So, I'm going to stop there, if I may. Thank you very much for listening, and now we'll go ahead.
Fantastic. David, Caroline, thank you very much indeed for the presentation. Ladies and gentlemen, please do continue to submit your questions, just using the Q&A tab situated on the right-hand corner of your screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. David, Caroline, as you can see, we've received a number of questions, both pre-submitted and throughout today's presentation, and thank you to all the investors for submitting those.
David, if I may just ask you to click on that Q&A tab, and where appropriate to do so, read out the question and either give your response or direct it to Caroline, and I'll pick up from you at the end. Thank you.
Okay. I mean, the first question is about revenue share. I've just talked about that, so I won't. There's nothing to add on that subject. We have a question about expecting to see growth in Europe. I think, again, the answer is yes. As I said, the three premium brands, we expect to continue to see growing, and we will be rolling out the, also the conversion tools that I described around, which bring the Nettikasinot to other assets, and therefore would expect to see improvements. So I think the answer is, we expect to see further growth in our European assets, and indeed, we're looking at how we might roll Freebets out into new markets.
I think you might have noticed on one of the slides that we have trialed it in Ireland to take advantage of Premier League and learn from that, and take advantage of the racing in Ireland. Early stages, very small at this stage, but we think Freebets.com has opportunities into a wider marketplace. Why did you exit casino— I beg your pardon. Why did you exit Casino.se, given you want to remain in Casino? I think Casino.se is a great domain name, but had suffered a very severe penalty. So those of you who remember it, we obviously all our Casino brands, back in 2020, went into penalty, and the last one came out of penalty in April 2022. That was actually Casino.se, one of those brands.
I think the revenues included in the first period of the first six months were around $200,000 for Casino.se, plus a small amount for Casino.pt and Casino.gr . Probably up closer to $300,000 in total, approximately. So very small revenues, and we had a offer, as I think you're all familiar, of $4 million for those assets. So we judged that the revenue stream and the timeframe to get that kind of return would be very significant, and that we were in a position to retain some of the tail revenues included in those revenues, which indeed formed the bulk of the revenues, while realizing significant value through the sale. So we did the sale. We launched Kasino.se, and we are generating a very small number of new customers.
But, of course, critically, we are also protecting the small but and declining tail, but nevertheless, an important profitable stream. So it's half touched on the next one, but let me pick that one up. Your RMPs seemed lower than expected. Can you say more about the impact of ESPN BET? Well, so ESPN BET, I think, as I say, I said something about this in the presentation. PENN Entertainment used to run a book through Barstool, which, as you all know, was a very important customer for us in 2022, and indeed, was continued into January 2023. That brand was rested for a period of time, impacting half one and early stage half two.
And PENN then announced, I think you'll be aware, about a month and a half ago, perhaps two months ago now, that they had done a licensing arrangement with ESPN to use ESPN BET, which they will pay $150 million a year for the license. And they also announced a very substantial investment in marketing. So, we, having been a very important affiliate for Barstool or for PENN, who, as I said, operate the Barstool brand, we are remaining in close contact with PENN, and are expected to participate as a significant affiliate for them in the launch of ESPN BET when it comes in November.
And of course, critically and importantly, we are anticipating that will continue into 2024 in a way that, it was a more staggered expenditure in 2023. So we expect a more even pattern of activity. Just looking down the question. Have you stopped spending on transformation? Caroline, do you want to answer that one?
Yeah. So as I kind of explained in the presentation, so transformation is significantly reduced and relates largely to the exit of the Personal Finance assets and closure of our marketing agency, which was the external clients on BlueClaw, and some other kind of rationalizations across the group. The majority of that has occurred in H1. There will be some ... A smaller amount of costs that occurs in H2, and that's just because those assets, the Personal Finance assets that we sold, we supported the buyers with some services which ran through into H2, but it will be significantly less in H2, and ongoing.
Okay. Thanks, Caroline. We've had another question in: Where does XL see its own value, and how can it be increased? I think this is obviously a reference to the drop in the share price that recently occurred as a on announcement. I mean, clearly, our trading update went out in July at the same numbers in it that has recently, you know, been reiterated in these numbers, and we have reconfirmed that we expect performance to be in line with management expectations. So we were not anticipating that this there would be this outcome in terms of a further drop. We think the business has got two components to it. It's got the recurring revenues that I described in Europe, and it's got the underlying profitability from the North American business.
Then, as I said to you, I think earlier, it enjoys the spikes, the profitable spikes that come from state launches. Different people use different terms to describe them. But they obviously create a short-term, one-off profit boost and cash boost. But they are, as I said, a number of times, i.e., it's not going to be linear. I think we have to look at the business. We look at the business, certainly, as underlying and spikes. So there are two parts to it. So, and the way I look at valuing the business is very much what does the underlying business generate? And in 2022, you'll recall that we actually are the only company that I'm aware of, at least, call it quantifying the spike, i.e., the benefit of state launches.
We quantified, you'll remember, in 2022, that there was about GBP 10 million of revenue, approximately, from the spike effect, with a GBP 4 million-GBP 5 million EBITDA effect. We made GBP 16 million in that year. And so one assumes there's GBP 4 million-GBP 5 million, then we made GBP 11 million-GBP 12 million, what I'll call, core underlying, let me find the right term for that, and then GBP 4 million-GBP 5 million of spike. So I think of the business as having a very strong core cash generation, core profitability, and then I see it as periodically benefiting from these spikes.
I think over time, we're trying to get the market to understand that two components and start to value the business based on the underlying profitability, and then, then getting some value for the opportunity to participate in state launches. So I think, I don't think that's reflected personally in the current valuation, but we're gonna work very hard to get that message across, and enable investors to start valuing, as I say, the core, plus the plus the spikes. I've had an email in before the meeting with a few other questions, so I'll pick up a couple of those, if I may. Why didn't the forecast for Personal Finance and casino come through? What lessons have been learned from this? Well, this is a story we've talked about many, many times before.
Casino assets were, as you will recall, put into penalty in late March 2020, which meant those sites effectively became pretty much invisible to the potential consumers. And the last asset, as I said earlier, came out of penalty in April 2022. So there was a very severe decline in revenues. And the reason those assets were put into penalty was because they were literally 3,000-odd sites with very, very thin content that provided no value. It was judged by Google, having changed their rules, that it was no longer a value added to the customer, and therefore, they deranked those sites. We have said, and I'm afraid, forgive me for repeating it many times, that we don't run any sites of that kind. We run a very small portfolio of branded assets with high-quality content.
We don't have any bought backlinks, and we are very careful to remove questionable backlinks, or toxic backlinks, as they're referred to, to ensure our sites are no longer at risk of any type of concern that Google may have that would ultimately cause them to be deranked. So I think that is an issue of history. I feel I might have said that a number of times. That is the case. It no longer has a bearing on how we run the business. We now run the business with a risk and risk management, as a maximum focus for avoidance, rather than taking the extreme risks that perhaps generated the cash cows of history. And in Personal Finance, the same story is broadly true.
We had a small number of sites in this case, but they fell foul of the EAT Rules, the Expertise, Authority, Trust rules. That they were judged not to offer the customers sufficient expertise or authority in the recommendations that were being made, and as a result, they lost significant rankings, and as a result of that, significant revenues. As I say, we've learned some while ago from this, we run our business in a very different way. As you can see from the strategy, we run a small number of brands in regulated markets with a risk management program around our SEO, our backlinking, to ensure that we never suffer those kind of penalties ever again. Sorry, I'm just trying to find the other question. Excuse me. Here, here we are. Here's another one.
It was also said that how well Sports Betting Dime is developing, for example, and the CPA rates are still over $350. Why are we not seeing any positive development? I guess this question came in before we'd just done the presentation, because I think you'll notice in the presentation that Caroline acknowledged that Sports Betting Dime was up 13%, half on half, and that indeed unique visitors were up 120%, period on period. So I think perhaps that, as I say, was a question that had not yet heard the presentation. And then we have another question. This I think is probably the last one. In the past, quality has always been talked about when it comes to the new XLMedia.
Now, in Europe, most people are only talking about WhichBingo and Freebets. In Finland, do you have problems? Does Freebets stand for quality? I think I've sort of answered that already. All our brands seek to be of the highest quality that they can be in the type of markets in which they operate, and the type of purpose which they have. So we attempt to offer quality content, and where we can, value-added services. So, for example, I think I've said this before as well, in our casino sites, we offer services to customers who are struggling to get a response from an operator to act as a middleman and to engage with the operator on their behalf and get a response from the operator for that customer, and we've successfully achieved that on a number of occasions, and that is available.
We do talk principally about WhichBingo and Nettikasinot and Freebets, because they are the three premium brands around which we are putting our primary resource. We think they are the ones that can grow the fastest and deliver the most value to shareholders. And, excuse me, we do run, of course, as you know, a small number of what I refer to as satellite brands, Kasino.se, with a K, as we've mentioned, has not, in our European markets. And we continue to roll out the tools that I defined to improve conversion rates to those assets. They remain small, but our objective is obviously to grow those slowly from their relatively modest bases, but again, applying the same level of quality and care in delivering those assets.
So, unless there's been another question come in, I've asked, I haven't answered. Yes, I have. Have we got another one? Sorry, we're just discovering whether there is a further question or quality.
Do you see cash balances increasing in H2?
Do you see cash balances increasing in H2? The answer to that question is that we expect to see cash balances coming out of H2 increasing on the basis that the profile of spend of operators is going to be geared more heavily towards the back end of the year, and therefore, cash balance at H2 will be prior to collecting cash from November and December trading, which will largely fall into January. So yes, we expect to continue to have a solid cash balance by the end of the year, but with more cash coming in in the early part of January. I think that's the last questions of this conference call. So thank you very much, everyone. Do I hand back to you?
David, thank you very much indeed. And of course, any further questions come through, we can review those, and we'll put responses back out on the Investor Meet Company platform. David, perhaps just before redirecting investors to provide you with their feedback, which is particularly important to you and your team, I could just ask you just for a few final closing comments, please.
Well, look, I think, as I say, I think we're trying to be as open and transparent, as clear with you as we can possibly be. We have been ever since Caroline and I have been on board, in terms of giving you the visibility of the nature of the fact that this business, because it's so heavily weighted in North American CPA, will not be linear when there are, and that's a very important part. I emphasize the need to understand the underlying relative to the spikes, and we will continue to implement the strategy that we've outlined to grow recurring revenues, to diversify revenues, and to control our costs with a view to seeing a growth in shareholder value over time. So thank you very much.
Fantastic. David, Caroline, thanks indeed for updating investors today. Can I please ask investors not to close the session? You should be automatically redirected to provide your feedback in order the team can better understand your views and expectations. Only take a few moments to complete, and that's greatly valued by the company. On behalf of the management team of XLMedia PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.