Betmakers share price slips despite new $20 million deal

The Betmakers Technology Group Ltd (ASX: BET) share price has fallen into the red this morning. At the time of writing, it is down 2.17% to 45 cents.

This comes after the company announced today it had amended a key contract that lifts its minimum revenue cap by $20 million over 10 years.

The betting technology provider rejigged its agreement with NTD Pty Ltd that will see the minimum cap on the annual fee it receives increased to around $100 million over the next decade.

Betmakers supports M&A of its clients

The new terms were struck as part of a deal between Betmakers and NTD for the acquisition of O’Shea Bookmaking Pty Ltd (trading as TexBet). TexBet is a long-standing client of Betmakers.

NTD will acquire TexBet and Betmakers will contribute a total of $2.5 million in two tranches towards the acquisition.

It will also help migrate customers on TexBet to the NTD platform. Betmakers will also provide supervisory support in relation to the trading until the TexBet customer base is fully migrated to the NTD platform.

In exchange, Betmakers won’t only see its minimum revenue cap with NTD lifted. It will also own the intellectual property for the betting platform technology currently owned by TexBet.

The net gaming revenue (NGR) generated from the TexBet customer base will form part of the NGR used to calculate the annual fee payable to Betmakers under today’s revised agreement.

Original agreement with NTD

Betmakers’ subsidiary, OM Apps, was awarded an exclusive agreement with NTD in April this year for a new wagering venture.

The original agreement included minimum revenues of circa $80 million to Betmakers over the 10-year contract. The maximum revenue to Betmakers stands at more than $300 million.

Betmakers will also be paid a platform establishment fee of $2 million. The original agreement also provides it with a launch development fee of $500,000 a month between signing and the go-live date (expected to be October this year).

Betmakers share price snapshot

The Betmakers share price has fallen 62% over the past year and 45% this year to date, but at least it isn’t alone. Other gaming shares have also fared badly. The Pointsbet Holdings Ltd (ASX: PBH) share price has fallen by 60% over the past 12 months and 42% so far in 2022.

The post Betmakers share price slips despite new $20 million deal appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group Ltd and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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