Youbet Q1 2006 Same Track Core Handle on Path to Grow 25%
biz.yahoo.com
Thursday March 23, 7:00 am ET
Company to Launch New Customer Acquisition and Retention Programs
Today's Investor Conference Available via Webcast
WOODLAND HILLS, Calif.--(BUSINESS WIRE)--March 23, 2006--Youbet.com, Inc. (Nasdaq:UBET) Chairman and CEO Charles F. Champion will tell investment analysts today that the pari-mutuel wagering company's Q1 2006 same track core handle is on path to grow 25% over last year and that total core handle growth will be in line with previously disclosed expectations.
Due to changes in content mix, and with seven racing days remaining in the first quarter 2006, Youbet's core handle is expected to achieve year-over-year growth in the range of 15%-17%. Year-over-year handle growth at Youbet's pari-mutuel rebate subsidiary, International Racing Group (IRG), is expected to be 50% due to the acquisition of a new substantial high volume customer.
The benefit of the improved handle will be partially offset by an increase in marketing expenditures associated with two new customer acquisition programs that are scheduled to be launched next month. Youbet plans to increase its full-year marketing budget to $2.5 million. In addition to these increased Q1 marketing expenses, the company will record expenses associated with its recent acquisition of United Tote.
According to Champion, the improvement in core handle is the product of continued strong growth in Youbet's customer base and increases in wagering by the age 21-40 segment.
"Even with these positive handle trends, we continue to focus on expense management to exploit the leverage inherent in our business model," Champion said, "and we expect further operating leverage to occur throughout fiscal 2006 as we realize additional synergies in connection with the United Tote acquisition."
At the company's inaugural investor conference, Champion will preview two new marketing initiatives. Youbet.net, a learn-to-play, play-for-points website, and Youbet Advantage, a customer loyalty building program for subscribers, are designed to increase handle through customer acquisition and account usage incentives.
The increased marketing dollars for the year are being deployed against targeted demographic and age segments where Youbet has had considerable success mining new business in the past. The company will use branded media channels to reach generation Y prospects. These younger customers have been the source of 40% of Youbet's new customer count since 2004. Once they become customers, they show the highest propensity for increasing their online and phone wagering volume. Last year the age 21-40 segment increased its wagering by 50%.
"We have proved that we know how to attract new fans for the sport and acquire new customers by delivering the excitement of live racing to the marketplace," said Champion. "What is more, we have become adept at evolving these new customers -- through targeted incentives -- to consistently higher levels of wagering, often at higher yields.
"Youbet.net and Youbet Advantage are logical extensions of those successes," he continued. "These programs are contemporary approaches to account building that we expect will bring new customers to Youbet. Just as important, we believe that they will help develop new fans for our sport and new patrons for our track partners."
Youbet.net is a mirror image of Youbet.com. Visitors to the site will be able to handicap and bet on live races -- with points, not real money -- and win travel to premier racing events, tickets to tracks, vacations, and other prizes. TV and print ads to drive traffic to the site are scheduled to begin in April.
With Youbet Advantage, customers will be rewarded for their betting volume and their loyalty to Youbet. Subscribers who enroll in the program will earn points with each wager. Points can be redeemed for gifts including a selection of event tickets, merchandise, travel opportunities and more.
"Based on our track record with younger audiences, we believe the odds are good that we can develop high affinity traffic at Youbet.net and then, with our superior features and Youbet Advantage, convert visitors to customers who will stay with us for their betting life," Champion said.
At the conference, Champion will reveal that Youbet's IRG subsidiary is engaged in a limited single customer test of computer program wagering that is being monitored by the Oregon Racing Commission (ORC). The test is designed to verify that program wagering, where host tracks may elect to accept so-called robotic wagers, can be conducted within a transparent regulatory framework.
"The U.S. racing industry needs a way to capture its share of the pari-mutuel handle generated by computer-based wagering," Champion said. "We are quite pleased that the ORC has chosen to work with IRG in this important test program."
Youbet's live analyst day webcast starts at 8:30 a.m. PST, Thursday, March 23 and is available at youbet.com (select "About Youbet.com"). |
