FansUnite has cited the tightening of regulations in the UK as a leading factor in its decision to sell McBookie, the Scotland-focused sportsbook and online casino.
McBookie was bought by FansUnite in March 2020 and has since delivered three consecutive years of revenue growth under the strategic guidance of directors Paul Petrie and Damian Walker, achieving a gross win increase of 451% and a turnover increase of 305%.
The success of its subsidiary contributed to a 364% year-on-year rise in revenue for FansUnite in FY2022.
But with the landscape changing in the UK, particularly over the last month after the release of the Gambling Act review White Paper proposing an overhaul of its ‘analogue’ laws, including monthly and yearly net loss thresholds, FansUnite is withdrawing from the market.
The Vancouver-based betting and gaming firm leaves having made a significant profit on McBookie, though, after receiving more than $5m in cash, over seven times its record 2022 EBITDA and more than double its purchase price of $2.2m in 2020, $1m of which was in cash.
“This is a great deal and outcome for McBookie and for FansUnite,” said Scott Burton, CEO of FansUnite. “We began a path of streamlining and focusing our business in 2022. With the UK continuing to tighten regulations on gaming operations, we felt it was time for FansUnite to exit the B2C space.
“We will be able to focus more resources on the segments of our business that offer the highest growth potential with good margins, specifically the US marketplace and affiliate opportunities. This sale will strengthen FansUnite’s balance sheet as the company moves towards being cash flow positive.
“I want to thank Paul and Damian for their efforts while they were part of FansUnite and wish them well as they continue to grow the McBookie brand.”
This latest deal further swells FansUnite’s balance after the firm secured a $3.04m non-brokered private placement in March.
Tekkorp Capital bought 13.75m units of the financing in that transaction and subsequently acted as a strategic advisor to FansUnite in the sale of McBookie.