They’re not sleeping on the giant opportunity coming soon.
The launch of single-event sports betting in Canada is a big deal, and among the operators poised to benefit the most is theScore, a company whose early days saw it provide ticker-tape-style scores to a cable TV audience.
So, on Monday the Toronto-based operation officially known as Score Media and Gaming (SCR.TO) announced its filing for an initial public offering in the United States.
The company, in a news release on Monday, said it intends to list its shares on the Nasdaq exchange under the symbol SCR, adding that will retain its symbol on Toronto Stock Exchange.
There will be 5 million of theScore’s Class A shares offered for sale through a syndicate of underwriters led by Morgan Stanley, Credit Suisse, Canaccord Genuity and Macquarie Capital.
What Benefits are Customers Receiving?
Already serving some US markets through its theScore Bet platform, theScore brings sports news and information via its mobile app. According to the release, it also “creates and distributes innovative digital content through its web, social and Esports Platforms."
With theScore Bet available in Colorado, New Jersey, Indiana and Iowa, theScore looks to expand its footprint in North America.
"We believe a U.S. listing would benefit our business and shareholders as we seek to further execute on the growing opportunity in the rapidly developing North American sports betting market,” John Levy, theScore’s chief executive officer said in a Feb. 11 news release.
Recent financial disclosures indicate New Jersey wagered $931 million in November 2020, with 93.6 percent of bets being placed through online or mobile betting – a near-16 percent jump from October – to set a US national record, according to Deloitte research.
There are 24 US states that have passed various sports-betting legislation in the wake of the landmark 2018 decision by the US Supreme Court to overturn the ban on single-game betting outside of Nevada.
In Canada, the progress of federal legislation to legalize single sports betting appears unstoppable, with legalized sports-betting to be implemented as early as May or June.
Last week, Bill C-218 passed a vote in the House of Commons and was set to be reviewed by the House of Commons’ Justice and Human Rights Committee.
Deloitte estimates that, if enacted, within five years the sports betting industry in Canada could grow from $500 million to nearly $28 billion in legal-market wagering.
theScore’s Story to Date
Levy started theScore in 1994, buying a TV station, SportsScope, that aired only text-based sports data all day. Levy was encouraged by the success and sold his family’s Hamilton, Ontario, cable business to devote all his energy toward the channel.
As a Yahoo!Finance story puts it: “There was a time when Rogers Communications and BCE Inc. didn’t own every sports channel in Canada. Levy set the company up as a viable third option offering a different kind of sports television, focused on second-tier live events (such as college basketball and pro wrestling) and top notch commentary around more popular but incredibly inexpensive games.
“He moved away from the ticker tape and brought in a host of bloggers and opinion-makers to offer the insight and personality that was lacking from the mainstream options. Why pay for expensive rights when you could show highlights and provide a level of detail to the coverage that wasn’t widely available?”
Levy’s station became a target of mega-companies looking to secure sports TV rights, and Rogers bought the TV station for $170 million in 2012.
But Levy kept the app.
The Path Forward for theScore
The company said the offering will be priced “in the context of the market with terms, including price per share, to be determined at the time of entering into an underwriting agreement with the underwriters.”
The revenues generated are expected to be directed to “fund working capital and other general corporate purposes, including the continued growth and expansion of theScore Bet’s operations in the United States and Canada,” according to theScore company release.
Success is not assured, however, with DraftKings, FanDuel and Penn National Gaming in the mix.
Others including publicly listed Canadian competitors Bragg Gaming Group (BRAG.TO) and FansUnite Entertainment (FANS.CN) are, like theScore, bullish on the opportunity these new markets could bring.
Levy’s gamble hinges on hopes of a relatively quick turnaround, given that theScore posted a net loss of $12.6 million for the three months ending Nov. 30.
But Levy says the company’s media revenue has never been stronger than it was in the last quarter at $10.6-million (a figure primarily driven by advertising sales in Canada and the US).
“Our new fiscal year is off to a stellar start, including our best-ever quarter for media revenue, exponential handle growth on theScore Bet, and yet another record period for our esports operations,” he said in a company release.
“We continue to deepen our market-leading media and betting integrations and achieved year-over-year handle growth of 535% on theScore Bet.”
And as Canada’s sports market looks to open up betting, Levy is eager to monetize what has been reported to be 3.9 million average users and their 458 million monthly user sessions.