Betmakers Technology Group Ltd

ASX:BET

Earnings Call Transcript

[Jane Morgan, executive]

Very good afternoon, everyone. I'm Jane Morgan, the Investor and Media Relations Manager for BetMakers Technology Group Limited. Today, the company released Q4 FY 2022 quarterly activities and Appendix 4C report. On the call today, I am joined by our CEO, Todd Buckingham; our CFO, Anthony Pullin; and our COO, Jake Henson. With that, I'll hand over to Todd Buckingham to run you through the presentation.

[Todd Buckingham, executive]

Thanks, Jane, and thanks everybody for joining in today. It's a pleasure to give you this update. And so we're going to give you an investor update today with our quarterly activity. And given it's the fourth quarter, we wanted to highlight some of the full year numbers and achievements of the business. We'd also like to give you some color on where the business is heading with our strategic focus heading into FY '23. Look, Q4 has been a significant one for BetMakers with the culmination of executing a number of key deals and strategies towards the back end of FY '22 to really set the business up for the exciting '23 moving forward.

Some highlights for Q4. As you see there, $26 million in cash receipts for Q4, obviously, a good achievement for us to crack the annualized $100 million in cash receipts. And obviously, that transfers across to revenues as well. So we'll talk a bit more on that. But 194% increase from the Q4 corresponding period last year. And more importantly, it's a 20% uplift quarter-on-quarter. Again, cash flow positive from operating activities, exciting for us to get that. Anthony will cover off on more -- in more detail over the next couple of slides.

Some key deals that we did selected for -- to power the wagering tech and trading in a new venture with NTD Pty Limited. And for those of you who have been following us over the years, we have finally launched fixed odds into the United States with our New Jersey offering on course. Another exciting announcement is that we launched the Monmouth app. We launched it this week. So they'll be betting online for the first time in the United States for fixed odds betting on thoroughbred, so an exciting achievement for the business this weekend coming up.

Update to our managed trading services agreement. That's going to be significant in the segment that's obviously the fastest growing in the year this year, and we'll cover off that in more detail. We're also selected as a new tote provider in Norway. There's a bunch of deals that we've done through our tote business, and this is an exciting one for us as well. For our GRN segment, we signed a deal with Penn National Gaming for the data and vision content distribution into the international markets. Again, it really sort of gets that part of the business accelerated moving forward. Closing cash balance for the quarter -- for the year of $87.6 million.

But before heading over to the numbers with Anthony, we wanted to touch on a couple of our investments that we've made this year. We started the year significantly with a bank balance of about $110 million, $115 million. And we're looking at ways to deploy this capital. While we kept a close eye on the number of opportunities across the market, we've chosen to be really conservative and concentrate on what we feel are low risk and within our control as investments. Firstly, we invested heavily in our tote business. We spent circa $16 million on terminal hardware, upgrading significantly to allow our customers to modernize and future-proof that business. And this has really allowed us to future proof this division of our business as well.

The global tote is a steady ship at BetMakers. We see this as our underlying consistent revenue stream with very good EBITDA margins. I mean investing in this technology has allowed us to sign longer-term deals, moving away from the traditional 1- or 2-year extensions to now signing 5- or 10-year deals as evidenced by our Norway and Monmouth Park extensions. The new terminals have started to roll out, which is exciting for us into the U.S. market and now continue to roll out throughout 2023.

The second major investment that we did that you'll see in our numbers was to close the deal with the NTD, which was our advisory fees to the tune of $15 million. Well, closing the NTD deal was a significant one for BetMakers. Financially, it obviously stacks up with the ability for us to earn circa $300 million over the next 10 years and beyond. And while we had decent minimum revenue numbers built into the contract, we expect this to hit our annual caps quite quickly, which can quickly grow into in excess of $20 million a year and by year 10, more like $40 million.

In addition to the financial benefits that deal has, there's significant support to the model that we have developed, the outsourcing tech and trading, a model we feel can be transformed in the global markets. While this model is somewhat out there already, we feel the deal gives us -- gives BetMakers the opportunity to create a B2B solution that's competitive with Tier 1 operators globally. This will allow the global operators to come out of the blocks with focus clearly on customer acquisition and engagement.

Thirdly, we've spent a great deal -- we haven't spent a great deal of money at this stage, but we've announced a share buyback. We feel the business is in a very strong position from a balance sheet and a P&L perspective. And given this, we feel we can create some shareholder value by deploying some of that capital into the share buyback as we feel the business is great value at the current market given the position of the business now and the deals which is front of us in 2023.

I'd like now to invite Anthony Pullin to take you through the financials.

[Anthony Pullin, executive]

Cheers, Todd. If you've got the presentation in front of you, I'll sort of run through Slides 4, 5 and 6 in a little more detail. Todd's covered off on some of the highlight numbers. But starting with the Q4 cash flows. So we've generated $26.2 million in cash receipts from customers. This is an increase of 194% on Q4 FY '21 and 21% on Q3 FY '22. We also generated positive cash flow for -- sorry, positive cash flows from operating activities during the quarter of approximately $400,000.

To highlight some items from the quarterly cash flows. First, in the operating activities. We spent approximately $2 million on accelerated expenditure. We have a number of contracts which are signed, announced, and we're working to get into the market as soon as possible. Jake will take you through a few of these later in the presentation. But the costs, which we've highlighted here, are directly related to accelerating the delivery of those products, which are currently not generating any revenue for us.

Staying within operating activities. We also have about $500,000 of nonrecurring third-party adviser fees. Within the investing activities, Todd just touched on a couple of these points, but we spent approximately $5.6 million during the quarter on BetLine hardware at least in the U.S. And we also made the $15 million advisory payment in relation to executing the NTD wagering deal.

If we go to the next slide, okay. Here we have the annual cash flows. I guess before I get into the numbers, we try to keep our financial reporting relatively simple and transparent. As a business, we don't capitalize any staff or staff development costs. We put them all through the P&L. Hence, we feel that our cash flow position for the year is a relatively good indicator of the company's underlying profit and loss. So for the full year FY '22, we've recorded $93.3 million in cash receipts from customers, which is up 325% compared to FY '21. Once again, diving into some of the operating activity cash outflows, we've highlighted approximately $4 million of accelerated or nonrecurring costs during the year.

Into investing activities. Once again, we've already touched on this. We spent $16.7 million in U.S.-related hardware. This investment has acquired us -- sorry, acquired us a significant amount of hardware. Moving forward, we expect to see that cost reduce looking forward to FY '23. Based on the current contracts we have and expected pipeline, we'd expect that CapEx to be closer to $6 million. Moving forward into FY '24 and beyond, we would probably see that return to a steady state CapEx investment of approximately $3 million per annum. Lastly, we finished the year with $87.6 million in cash on the balance sheet and no debt. So feeling we're in a pretty good position to execute on our strategy during FY '23.

If we jump to the next one, please, Jane. Okay. In terms of revenue overview, once again, as I mentioned on the previous slide, we feel that our cash flow is a pretty good proxy for our profit and loss of the business. So just to highlight, from a revenue perspective, our full year revenues of $91.6 million, up 370% over prior year. Second half revenues of $48.1 million, which is up 10.8% on the first half. And our Q4 FY '22 revenue run rate is in excess of $100 million, which, as Todd mentioned, is quite a good milestone we're proud of here in the company.

From the graph, you can clearly see that a lot of the growth in the last year has come from the expansion of the platform managed trading services products, which falls within that Global Betting Services division as well as the integration of the Sportech's Racing and Digital assets, which is flowing through the Global Tote division.

Jake will cover off on the operational performance of these divisions a little later. But now I'll hand back to Todd to run through the team and company footprint. You're on mute, Todd.

[Todd Buckingham, executive]

Thanks, Anthony. Obviously, it's been a busy year here at BetMakers in bringing people on, and we are very pleased to add 2 people to the Board, Anna Massion, who's previously run investment portfolio in gaming stocks and is now executive on a number of boards, including Playtech. She brings to the board some industry knowledge, extensive industry knowledge and global contacts, in particular, through the U.S. Exciting to have Anna onboard. And Rebekah Giles, a leading lawyer here in Australia that sits on a number of boards, including the Greyhound Racing New South Wales Board. Rebekah brings strong credentials across -- in compliance and corporate governance and rounds out our Board nicely.

A couple of key management personnel who we've brought on. Sam Adams, Chief Legal Officer; Christian Stuart, to head up our North American market as a U.S. CEO comes out of the Caesars digital business. And recently, Dan MacDonald has been promoted as Chief Digital Officer to deliver on some key projects such as the NTD Go Live.

So if we move on to the global footprint, Jane, you can see there from the business, BetMakers is well positioned globally. We're in over 30 countries, 45 regulatory licenses, employees now up to close enough to 500 employees. So we've got a really good footprint in the business. And when Jake covers off on the business units, you'll get an understanding of how moving forward our strategy is to connect these jurisdictions and this global footprint into each other. So really exciting times for us moving forward.

So I'll hand back over to Jake now, and he will take you through the key parts of the business.

[Jake Henson, executive]

Thanks, Todd, and hi, and thank you, everyone, dialing in. Jane, if you just want to roll forward to this slide to start off with. As touched on, I think, in our last presentation that went out to market, going forward, these will be the segments that we report within and also in terms of our strategic initiatives and overview of activities that also will fall into one of these 3 buckets.

Jane, if you just roll to the next slide, which is 11 for anyone at home. Global Betting Services. Now this division experienced really healthy growth throughout the period. And importantly, we saw a further diversification of our revenue base due to many new clients coming onboard. As Todd mentioned, also the finalization of the Tarpin deal and the subsequent increase in our gross margin.

Another highlight here is the annualized turnover of the combined platforms in the U.S. and Australia now exceeding $2 billion, a great milestone for a growing business. Going forward here, the theme is really focused around execution. And that execution is due to the strong pipeline we have of contracted deals, not only here in the Australian market but also in new markets, Canada and New Jersey. So we see the new NTD consortium deal and other contracted deals here in Australia is vitally important to that growth, but we see also some upside with new markets and the work we've done with regulators through software and platform approvals to get our new customers live in those markets, laying the foundations to onboard new business throughout the second half of this year.

A few other key areas to note here within this division. Certainly, as Todd touched on at the start of the presentation, as part of the fixed odds rollout in New Jersey, we're going to be morphing that offering to more and more of a digital reach. Certainly, the Monmouth bets app in online and also throughout our BetLine terminals on course getting the product in front of as many punters as possible. The final thing to call out will just be upgrades to our digital offering in general in this platform division, both for Australian and North American customers. This is expected to kick off in Q4 of this year and into Q1 of next year. We see this as a catalyst for further growth, both with new customers and also helping our existing customers grow, and therefore, our revenue base.

Jane, if you can scroll down to the global tote slide. Todd touched on it off the top. It's certainly a strong and underlying core of our business, the global tote. It delivers a strong margin, a very diverse global network, and it covers premium racing jurisdictions in both hemispheres that really underpin our strategy and tie in nicely to the other 2 divisions. The big focus for us here has been around signing long-term partnership deals. These longer-term partnership deals allow us as a business to invest in those customers, which Anthony touched on, but it also allows us to tie ourselves to the upside in these markets and new revenues that we're able to create through our investment.

I think this is a really good endorsement for what we're putting to our customers and noted there is the extension with Monmouth Park the deal with Norway. We've also secured other deals with Finland in that region. The Caesars contract and a few others noted there in the presentation. These are customers buying into our vision and they're the customers that we want to support with our investment. And hopefully, we both succeed, sorry, off the top of that.

Upcoming plans here and focus, I guess, to look forward to for the rest of this year center around 2 key things that I'd like to point out. One of those is our B2B co-mingling hub. For those of you not familiar with that terminology, that's essentially connecting the racetracks that we currently service from a pari-mutuel perspective to more customers around the world, be that through a direct link or setting up a subpool of their racing.

With the business now licensed in the jurisdictions Todd noted and customers betting from around the world, we see a huge opportunity in connecting those customers, leveraging that liquidity and creating new revenues for the racing businesses. And the other obvious one here is the rollout of the new tote deals announced through the period, particularly the Norway deal. So that will be a big focus for the team and deliver some strong growth going forward.

Moving on to the final divisional slide, the GRN. Steady growth here for the year. You can see a slight drop off in this half just due to some seasonality, and that's really tying into the racing calendars globally and the Southern Hemisphere versus Northern Hemisphere racing. Big focus for the next 6 months here is around executing on the rollout of the PNGI content that Todd touched on off the top. Penn have 10 new tracks that will come into our suite from North America. Importantly, they race all year round, and they play a pretty critical role in that calendar from North America, particularly in the later months of the year when some of the calendars are not racing. So we're definitely working hard behind the scenes to get that up and running and extend that content into new wagering places around the world so that we can capitalize on that in the last part of this year.

Further to this, our strategy here is certainly around securing more content and proving out that model. And that content could be through partnerships with racing bodies or rights holders. And obviously, for us, that ties into the distribution of the content, but also further deployment of our race-day services and integrity services, which is something to look out for in the second half of this year as we expand into new jurisdictions.

And with that, I'll just pass back to Todd, who might round out this presentation with the major focus areas for those 3 units.

[Todd Buckingham, executive]

Yes. Thanks, Jake. And that's -- we just do want to cover off on this. There's a lot in the presentation, and we want to sort of point out some key things for you to look at as investors. And our focus in '23 is on execution. We set the business up quite well. We've got some really good opportunities, really good deals that we have signed that we'll see the benefit of in 2023. Those things in GBS, which are Global Betting Services, obviously, the launch of the NTD platform is using our proprietary next-generation platform here in Australia. We're doing a lot of work on that and going to be excited to launch that. The business that we will be obviously launching before the end of the year. So we're looking forward to that going live.

We've got another 9 contracted platform operators in the Australian market here, 2 of them have already gone live. So another 7 before the end of the year. That's on -- I think we did 8 in the start of the first half of this year. So another 7 to go live to sort of put us over 25 platforms in the market here in Australia. So we're pretty excited to get those out. We're going to expand the BetMakers proprietary, that next-gen platform that we're building currently now. We're rolling that into the U.S. market. The first -- our first platform obviously goes live with MonmouthBets this week. So a great achievement to move our technology from Australia and move that into the U.S.

From a global tote perspective, key focus is, obviously, as Jake pointed out, the global tote hub, getting that going, connecting our customers globally, getting them betting on each other's products and building liquidity from a global sense. Our continued rollout of the BetLine terminals will allow us to do those long-term contracts that we're looking at, build that stability in the business. And then integrating our GRN content, so things like the Penn and getting that into our customers into our network of tote customers globally and our network of fixed odds bookmakers as well.

From a GRN perspective, what to look out for, obviously, the expansion of New Jersey and the rollout of fixed odds, not only in the New Jersey market, but in the other U.S. states as well. There's a lot to do there. It's been a slow moving beast, but we're really excited about that now that we've got things moving.

Deployment again of our proprietary racing, integrity and reporting platforms, everybody that looks at that platform and what we can do, gets excited about it. So there's some really good opportunities for us to partner up with racing bodies globally and get that into other markets outside of Australia.

And then the real focus for the growth of that part of the business. We've now got 12,000 races from the U.S. North American market that we're going to distribute internationally. And those partners, Penn Gaming, Monmouth, Kentucky Downs, putting it into our network of operators in Australia, in Europe, in Asia. It seems that it is going to be a key focus for us moving forward into FY '23. So these are the things to look out for. We'd like to give you a moment to send through some questions. And obviously, we're here to answer those and have a chat.

[Jane Morgan, executive]

Wonderful. Thank you, guys. Thank you for the update. We have had a few questions come through. And again, we encourage shareholders to use the Q&A function at the bottom of your screen to send any further questions, but I will kick off with the first one. A question here from [ Scott ]. So how is the partnership going with Caesars? And how is the integration going to the rollout outside of Nevada?

[Jake Henson, executive]

Yes, I'll tackle that one. I mean speaking more broadly about the deal, there's a lot of bespoke elements that went into it. So it just had some staff internally with a lot of experience in racing. We worked pretty collaboratively with them to develop basically their own terminal UI and execution point. So it's going really well. Obviously, early days, and the idea was to scale up volume and capacity as we get on. But yes, really pleased with how everything is going and certainly anything material that spawns from that will be announced, and we'll circulate as soon as we can.

[Jane Morgan, executive]

Thanks, Jake. There's been a few questions that have come through about this. But -- so does Bet own 100% of the website, monmouthbets.com? And if so, it assumes that, Bet can get 100% of the profits generated from the bets placed online?

[Todd Buckingham, executive]

Yes. I'll grab this one. Look, we -- any technology that we've built, regardless of who we're building it for we own, it's our proprietary technology. We own the IP of it. And that's no different for MonmouthBets in regards to the technology. The actual license is owned by Monmouth Park and it's them that goes online. And we're just a B2B supplier. So our commercial arrangement with Monmouth Park is that the same as our bookmakers here in Australia. We look after the tech. We look after the trading, and they look after the customer acquisition. So we don't get 100% of the profits. That would be very nice, but we don't. But we do look after the tech, and we do -- we are exposed to the growth of that business and the success of that business as well.

[Jane Morgan, executive]

Thanks, Todd. Just staying with that. So previously, Bet has asked for AOI, sorry, for online bookmakers for New Jersey, but the racing focus has been to MonmouthBets. So how are these negotiations progressing with these online bookmakers to offer these fixed odds products in New Jersey?

[Todd Buckingham, executive]

Yes, it's a good question. And the feedback really is about they want to see something working, which is why we're focused on getting live at Monmouth, getting through the regulations, getting that kicked off and now going online. We're building out the app so that we can show the operators what it -- how it works. And obviously, the tracks that want to build a revenue stream, they can -- they've got access now to deliver that to a customer. So MonmouthBets will be the first one. And obviously, we'll show people what it does and how it works. But at this stage, that will be -- that's the first online operator that's going to go live.

[Jane Morgan, executive]

Thanks, Todd. And so are there any other countries in South America looking to partner with Bet?

[Jake Henson, executive]

Yes, I can cover that one off as best I can. Obviously, we've got some existing partnerships there that investors would see from previous presentations and things like that. We actually see it as a massive growth market, and there's a huge opportunity in linking up a lot of the handle through this area. So I think we touched on it in the global tote slide around our B2B co-mingling hub. We see this as an opportunity to deliver a lot of revenue to Latin American racing in general. And that's probably the main bit of focus in that area, particularly speaking to that part of the world.

[Jane Morgan, executive]

Thanks, Jake. Again, a few questions just on NTD and the go live date, I'm not sure if you want to comment on that one.

[Todd Buckingham, executive]

Yes. We cannot comment when they're going to go live. What we do know is that the tech is going to be ready for spring carnival. So whether the guys want to go live and they've got their stuff sorted out will depend on them. So yes, it's coming along quite well, and everyone's pretty excited about it. When you see the website, everyone seems to get excited. So I think that's ticking along nicely.

[Jane Morgan, executive]

Todd, I'm just going to stick with NTD on this one. I'm sorry, we've got quite a few questions coming through. So are there any other further discussions about other opportunities occurring with Matt Tripp and News Corp deal? And will the NTD partnership be taken outside of Australia?

[Todd Buckingham, executive]

Yes, at this stage it is focused on Australia as far as I know. We've been assisting them with any opportunities that come up. And obviously, we're looking to be the tech and trading partner and anything that can accelerate that or build that into a bigger and better solution that we're interested. We've -- in our negotiations, we really focused on making sure that, that was an opportunity for us that we could expand the agreement that we've got with them. And obviously, we're going to support them as much as we can. They'll be a key partner for us here in the Australian market at this stage.

[Jane Morgan, executive]

Thank you. And there's just another question that's come through. Are we in discussions with Colorado about fixed odds?

[Todd Buckingham, executive]

Yes. Colorado is an interesting one. It's a market that we think will open up after New Jersey. I think that there's all eyes on how this is going to work this weekend in terms of the online offering. Colorado has put regulations in place so they can allow fixed odds. There needs to be commercial deals done in place and sign-offs from the Horsemen Group and the track that's listed there in Colorado, which is Arapahoe Park. So look, I think those discussions are going on between those parties. And obviously, we're there to help out where we can, and we're pretty keen for that to open up as soon as possible.

[Jane Morgan, executive]

We've got a question here from [ Jeffy ]. He's congratulates us on a great quarter, but growth is obviously a focus, but when will we see more scale and cash flow hitting the bottom line?

[Anthony Pullin, executive]

Sure. I think that one's clearly for me. Look, I guess, in the coming year, we hope to see a lot more scale coming through in the business. Up until today and in FY '22, there's been a lot of investment ahead of the curve. We've been building out the team, as you can see in the growth in staff costs over the prior quarterlies and Q4 4C reporting. Building up that team to support opportunities such as NTD, Caesars, U.S. fixed odds, et cetera. We touched on it before. We haven't really seen any revenues come through from these opportunities. So we're confident that we'll start to see these opportunities hit the market, start to generate revenues and then hopefully start to generate some scale and positive cash flows on the back of it.

[Jane Morgan, executive]

Thanks, Anthony. We've got a question here from [ Grant ]. So what are our biggest challenges with regards to technical issues, delivering our service on a global scale?

[Todd Buckingham, executive]

Yes. I think we've been really fortunate here to have a market in Australia that's well developed and probably the most advanced in the world. So while we're testing ourselves in this market, it is one of those ones that you need to get right. We're confident that we get it right here in Australia, then we'll be able to roll that out globally. So I think the challenges that you face in any market are going to be challenges globally. That being said, there's a lot of regulation and reporting and different things that you need to tick off. And those things -- those challenges are the ones that we face when we're rolling out.

We're fortunate that we've got 45 jurisdictions that we're licensing globally. So we've got a lot of experience with that across our tech, whether that's tote or fixed odds or our digital platform. So while we've got some experience in it, every market has its own unique challenges that you've got to face and -- but we've now got the team to be able to handle that.

[Jane Morgan, executive]

Thanks, Todd. Another question has popped up. So just on the mobile betting at Monmouth and the timing of why it's probably taken so long, perhaps if you want to comment on that?

[Todd Buckingham, executive]

Yes. I mean there are challenges that you face from a regulatory point of view and getting people aligned. This is something that we set out a couple of years ago and probably didn't appreciate the enormity of what we're doing, changing the law in the U.S., changing the law in New Jersey has been a massive effort. And obviously, then once you do that, then you've got to go through all of the next stage of things, which is getting your technology right so that you can build it and roll it out and obviously tick all the boxes from the regulators in that market. So they're just probably -- we're there now. We're live this week. So really exciting time for us and a really good effort from the team to actually tick that box.

[Jane Morgan, executive]

Guys, there's also been a few questions that have come through just on the options of dividends and whether there will be a dividend payout.

[Todd Buckingham, executive]

Well, I hope so in the future. I'm a significant shareholder myself. So any dividends that are paid out would be great. Look, we're in a phase of growth. We're building some opportunities across the business. But obviously, in the future, it then becomes a matter of making sure that we're making as much profit as we possibly can. But while these opportunities are there, and obviously, you've seen some really decent growth in our business and to hit $100 million annualized in revenue is a huge achievement, and we're really proud of that, but there's more to go. And so we'll keep putting the foot on the accelerator and entering those markets.

[Jane Morgan, executive]

Again, a few questions just on shareholder buyback. So I'll actually combine the 2, so has [ Chris ] just asked if we're going to be buying back the entire 10%?

[Todd Buckingham, executive]

Look, we -- this is -- as we pointed out before, we see the business value at the moment. We've got to be careful of where we deploy our capital. We've been strategic in that. We've been focused on spending the money in the right way and what gives the best return to shareholders. At this stage, we see value in BetMakers, then we'll be buying back whatever we can. If opportunities come up that we see as another way of adding on to shareholder value, then obviously, we'll be looking at that as well. We don't know where the business -- the opportunities come up and when we need that cash. But at this stage, we're focused on the buyback, and that's our investment strategy at the moment.

[Jane Morgan, executive]

Todd, I'll just further start then. So there was a plan to -- so is the plan to continue share buyback as the share price keeps rising, or was it only attractive option when it was in the 30% and 40% range?

[Todd Buckingham, executive]

Look, what I could tell you is we see the business value at current rates now. And the reason we see it at value is we understand the opportunities that are in front of us. We know that the business is going to be in a better position in 12 months' time than what it is now. And if we see the value now, then we're certainly going to be seeing it as value in 12 months' time.

[Jane Morgan, executive]

Jake, this is one for you, perhaps from [ Jennifer ]. So in GBS, when do we expect the additional 7 contracted clients to launch? Is it by the end of the first half of 2023 or later?

[Jake Henson, executive]

Yes, we anticipate all of those will be live within the next half, so pre-Christmas.

[Jane Morgan, executive]

And look, there's one just on the opinion of the amount of shorts in the stock.

[Todd Buckingham, executive]

Yes. Look, it's probably something that we can't really comment on, Jane. We -- all we're doing is concentrating on the business. What we do know is the shorts have got it wrong. Our business is growing. Our business is moving forward. And if someone wants to take a bet against us, and they're going to end up on the wrong side of the equation.

[Jane Morgan, executive]

Thanks, Todd. A question here just from [ John ]. So after a purely progressive expansion, the retail betting markets in the U.S. and Australia seems to be categorized by OSB's withdrawing or consolidating more so than expanding. So how would you describe the health of the underlying OSB market in Australia and the U.S.? And what does it mean for the demand outlook on that make as service?

[Todd Buckingham, executive]

We've actually found that those are opportunities. When there's consolidation in the market, it comes together, and that creates opportunities at the bottom end of the market. Consolidation and regulatory hurdles and increased taxes and all that sort of stuff means that operators I think they've got to be more streamlined. And then that creates opportunities for us. That's where we come in, and that's where we accelerate.

We're talking to someone earlier on, and we've got 18 platforms in the market at the moment. And they'd be all -- if not all, they'd be most of them would be cash-generating businesses that are profitable. So we know we've got the right model. We know we've got the right model because it works for our customers. It works for those clients, and it works for BetMakers as well.

So look, expanding that out into not only the Australian market, which is where we're seeing the market evolve and obviously come into those challenges. The U.S. has gone through some of those challenges right now where you need to be spinning out money, and not just burning cash, and we see that as an opportunity in this wave and also the next wave when there's consolidation again moving down. But as the markets evolve, then they'll move through these different waves of opportunity and regulation and headwinds and tailwinds. And we've just got to be there at the right time.

[Jane Morgan, executive]

Thank you. Another question has come through from [ Rose ]. So it's on the competitive landscape and in particular, from -- in the U.S. space.

[Jake Henson, executive]

Yes. I can tackle this one I'll give Todd a breather. We've certainly got competitors in certain areas of the business. And if we take it back to the 3 business units, there's competitors in each of those business units. What we're very confident on is our solution that covers all 3 of those and the service we can provide end-to-end to a wagering operator or a racetrack. So basically, either side of that value chain. So yes, whilst there is competitors in the market, we've been working pretty hard to ensure that our full solution is a solution of choice. And as Todd touched on earlier at the moment, most of that growth in that solution, we see as an internal thing, hence, buyback and whatnot, we're obviously also actively looking at what that solution looks like in 2, 3, 4, 5 years and getting ahead of the curve as we have done with this last push with the MTS division. So I think that's a continued focus really.

[Jane Morgan, executive]

Thanks, Jake. Just a question here from [ Neil ]. So is there any update on the position reported in early July regarding interstate fixed odds into New Jersey, the release of that you have requested confirmation of the position from the gaming enforcement in New Jersey? So just a little bit more of an explanation on that.

[Todd Buckingham, executive]

Yes. We haven't -- we've had the DGE working overtime, and helping us out with the launch of our MonmouthBets app. So we haven't had a chance to circle back there. Look, we're -- just to explain that situation, there's rights holders that would like to sell their content into New Jersey. And we don't want to do that exclusively. We want as much content to come into New Jersey as possible. All were there to do is protect the Horsemen and Dennis at Monmouth Park and ensuring that any operators that are operating within New Jersey that want to do fixed odds, obviously, get their agreements in place with the Horsemen. And then we're just asked the DGE to make sure that they clarify that with the operators.

[Jane Morgan, executive]

Thanks, Todd. Just one for Anthony here. So can you disclose how much is the Australian market turnover in revenue has gone through the BetMakers' MTS platform in the second half of FY 2022?

[Anthony Pullin, executive]

Yes, sure. What I can note it is in the presentation, I think across our global platform offering, we're doing in excess of about $2 billion in turnover a year. that's based around -- I think it was June in annualized because regarding the Australian market, the lion's share of that would be related to the Australian market, say, around 85% of that turnover I figure would be derived from the domestic market.

[Jane Morgan, executive]

Wonderful, and another one that's come through from [ Neil ]. So what are the likely cybersecurity risks and any subsequent consequences to BetMakers?

[Todd Buckingham, executive]

Yes, the challenges all the time that we face with cybersecurity and obviously, those challenges. The business has obviously got some things that it needs to do in regards to all of our agreements and stuff. We need to put things in place. And we are doing that. We're continuing to improve. We've built a really good security team out now within the business that handle that. So look, any business online has got challenges with cybersecurity and all we can do is put your best foot forward and put things in place that if things happen that you can get up again really quickly, but it's an ongoing battle and something that we -- is a front of mind for us and something that we need to handle and keep a cross.

[Jane Morgan, executive]

Thanks, Todd. Just one for Jake I see. So do you think Canada is a big market and how are things progressing there to sort of time frames for Ontario bets?

[Jake Henson, executive]

Yes. I think Canada, in general, certainly will be, and that will be driven by the fact that the operators who have invested in North America are already in states, we'll be wanting to achieve scale, so they will be wanting to deploy that service in as many of the provinces in Canada as possible. Ontario being the first of those, of which there's -- I think it doesn't operate, they're already live. And these are big global brands. So we certainly see it essentially providing market size of midsized U.S. states potential. So that part is super exciting. Obviously, there's racing in Canada, both thoroughbred and harness and an existing pari-mutuel revenues and some opportunities there as well. So certainly, it's nice to see that probably kicking off 6 months earlier than a lot had forecasted. And hopefully, that lays a foundation for more regulation and rollout throughout the rest of Canada.

[Jane Morgan, executive]

Thanks, Jake. Another question just to you from [ Benn ] . So are any of the Board lending measures to shorters?

[Jake Henson, executive]

That's a pretty easy one. No.

[Jane Morgan, executive]

Perfect. Another one here from [ John ]. So can you just add to this discussion around key competitors? So who do you most commonly come up against in your 3 business units? And what are the relative strengths and weaknesses of these key competitors versus BetMakers?

[Jake Henson, executive]

Yes. Do you want that one, Todd? Or I can go?

[Todd Buckingham, executive]

You can go in.

[Jake Henson, executive]

No worries. I think one of the things you find when you're entering new markets is obviously always incumbents in those markets. I think as a business, we've always positioned ourselves as trying to create upside, upside for all the stakeholders. That leads us down a path of -- and partnership first model is our first instinct doorways. And we think the sum of the parts for the players in the market if they're working somewhat together, can generally deliver the best results for everyone.

That being said, sometimes you do need to compete. And I think we've proven that we've done a good job of doing that in the markets that we've been established in over the last few years. So I'd say, in terms of the challenges, obviously, incumbents and being the new kid on the block or the growing business that often brings a bit of a target at times. But they're the battle scars that you live with. And obviously, the more you get through, the easier it is and we keep surging forward.

[Jane Morgan, executive]

Thanks, Jake. We've just got time for one more. So do you see the opportunity for taking your Australian clients to the U.S.?

[Todd Buckingham, executive]

Yes. Well, that's I mean Jake, do you want to talk on.

[Jake Henson, executive]

Sure. Yes. I think the success of the Australian market in general and obviously, it's the model that we've deployed has certainly had our customers thinking not just about the U.S. but other markets in which they can obviously lean on some of their scale in our technology. There's obviously 3 or 4 licensed wagering operators in Australia who are now live in some way, shape or form in the U.S. That probably looks like a dozen, I think, if you fast forward 2 years.

So yes, I think there's certainly opportunity for us to help those guys out. And speaking more broadly, we're certainly cheering to the Aussies in their quest for market share over there because I think there's a lot of learnings from our market that can succeed over there and hopefully, we're positioned to be a part of that journey for the operators that do it.

[Jane Morgan, executive]

Well, thanks so much for that, Jake, and 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. Should we miss any questions, please feel free to reach out via the contact details on the bottom of our ASX releases. I'd like to look forward to hosting you again soon. Thanks so much.

[Todd Buckingham, executive]

Thanks very much for joining us.

[Anthony Pullin, executive]

Thanks.