Two Way raises cash, betting launch nears
Australian interactive TV gaming company Two Way has raised A$1.05 million ahead of the launch of its horse racing gambling service on pay-TV platform Foxtel next month.
The fresh funds were raised via a placement of just over 19 million shares at 5.5 cents per share “to professional and sophisticated investors”, the company said. Two Way has recently instituted cost-cutting measures, including reducing third party licence costs by A$1 million a year by 2009, staff costs by A$2 million in 2008, and moving offices. The pay-TV wagering site will be the company’s flagship service.
Two Way’s CEO, Ben Reichel, said: “The Board is very pleased to have successfully completed this share placement, given the difficult conditions in the capital markets. It is a testament to the potential of the business, with our pay TV wagering service due to launch in Victoria in April 2008. We are grateful for the ongoing support from our investors.”
The company already operates internet and mobile internet betting sites and also has contracts with Foxtel, Austar and Sky New Zealand for interactive games on those platforms.Around 30,000 subscribers pay A$6 a month (A$7 for Foxtel subs), which Two Way shares with broadcasters. Bu the company is hoping that its betting service will be the real moneyspinner.
Linked to Foxtel’s Sky Racing channel, the wagering service is contracted to launch in Victoria and New South Wales. Betting company Tabcorp will pay a percentage of its revenues to Two Way until A$5.6 million has been recouped, then the fee will be split 50/50 with Foxtel. Two Way is forecasting that across its first five full years, the service wil capture a “sngle digit percentage” of the wagering turnover in NSW and Victoria, which was A$4.6 billion and A$3.5 billion respectively in 2006.
Two Way received approval from the Victorian government to launch the service on Foxtel in the state in February but has yet to be given the go-ahead by NSW. A recent presentation to investors said the company was “actively exploring deployment of wagering service around Australia” but many states are reticent to let gambling into punters’ living rooms.
The company is, however, in preliminary discussions with operators on other interactive services, such as sports betting.