Market Cap $28.6m, Cash $5.8m (approx). Current SP 25.5c.
Topbetta Holdings Ltd has built proprietary technology platforms that combine traditional online racing and sports wagering offerings with a fantasy wagering platform that enables sports fans to compete against each other via online tournaments. Topbetta has recently launched a product called “The Global Tote” which is set to disrupt the traditional Totalizator duopoly held by Tabcorp and Tatts Group in Australia. Industry leader Ladbrokes Australia has recently signed on as the first partner to take advantage of the Global Tote’s superior B2B offering for totalizator products. Effectively, The Global Tote will undercut the 17-25% rake of the big two tote operators, meaning better odds for the punters, and better margins for partner bookmakers such as Ladbrokes whose customers will bet into the Global Tote pools via their respective “best tote” options. It has also received approval from the major regulatory bodies in Racing NSW, Racing Victoria and Queensland Racing etc as further validation of the model.
Topbetta have been steadily growing their active users via the online betting tournaments which are an industry first here in Australia, but extremely popular in the US. They should have a healthy quarterly come out at the end of this month that will show cash receipts from the Spring Racing carnival period and football finals etc.
To date Topbetta has raised its funding at a premium to SP by placement to instos and sophs. IPO Listing price was 20c, and for much of that time prices have hovered just below that mark until the announcement of the Global Tote partnership with Ladbrokes. Huge volumes have traded since, and any trapped holders from the IPO have now had their chance to leave the side exit.
I’m not a great technical analyst but the chart and recent days trading volumes now look primed for the next leg up possibly coinciding with a good quarterly coming up or some other positive news such as further partnerships for the Global Tote or strong account sign-ups for the tournament betting platform. You can read the substantial holder notices to see who is on board and has been buying up in the capital raisings. There are no lowball performance options targets either. Cannacord did the recent raising of $3million @20c/share and get a million shares if the SP trades above 50c for a month. That’s a 100% gain from here and highly achievable in the short term.
Acquisition has long been a part of the Australian wagering industry and with multi-billion dollar merger talk between TABcorp and Tatts, and even takeover rumours of Ladbrokes gobbling up Tabcorp, it will be pocket change if one of the big players gets interested in the Topbetta technology.
This is my first STT tip, so shoot me any feedback or questions if I’ve stuffed something up or missed anything. I have seen TBH mentioned by a couple on here and @mouse said he didn’t really understand the business that well. The best way I can explain it is that it will be like the Uber of wagering. The big incumbents won’t see The Global Tote coming until it is too late and huge volumes will be traded through the Topbetta pools. A reduced takeout rate in a totalizator is massively attractive to professional punters and betting syndicates, and regular joes will be betting into it through their current bookmaker accounts without even realising it. As more corporate partners come on board, the disruption potential is simply massive for a company with a tiny market cap such as this.
