Lately board has been more negative than positiveI would like to challenge some of the negative posts I have recently seen on the board:
1. Negative net gaming revenue - theScore bet has only been live for eight months and reported results for six months. At this point in time, it's extremely early to evaluate NGR. Put it this way, handle is equivalent to top line revenue, GGR is equivalent to gross profit, and NGR is equivalent to net profit margin. Would you evaluate a company’s net profit margin six months into launching a business or in this case a new line of business?
2. Abysmal Q3 2020 earnings - I totally agree these will be terrible but I think estimates of 10-15M EBITDA losses are a too high. As revenues drop due to not only betting revenues but ad revenues as well, you must assume operating expenses such as marketing and administrative expense will decline. They also should be able to capitalize more costs pertaining to the development and technological advancement of theScore bet until sports have resumed. This will defer operating expenese to future periods to match revenues. I personally expect an EBITDA loss around 10M next earnings release.
3. Setting and pricing of odds - theScore bet not pricing its odds but using third party to manage risk is better in my opinion. This is not how we or in my opinion any sportsbook differentiates themselves. From my understanding theScore bet differentiates itself from others is via the integration of the media and sports betting app. This has been and will be one of the main reasons I stay invested because otherwise we are just another sports book among many others.
For me what's most important now is when sports resume and as I write this I'm even more confident of sports resuming by July, and even as early as June for some sports. With no fans in attendance, partial lockdown and social distancing measures still in place I fully expect sports media and sports betting to be through the roof. I have recently bolstered my position because I’m expecting a short-term pop once the major leagues confirm resumption.