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Thursday, Nov 30, 2023

Youbet.com Buys Manufacturer of Bet-Placing Tools

Continuing its efforts to diversify the company beyond online horse racing wagering, Woodland Hills-based Youbet.com Inc., has purchased the privately-held United Tote Company for approximately $34.2 million in cash. The acquisition is expected to be completed within 60 days and it will also include $14.4 million in pre-existing secured debt that remains on United Tote’s balance sheet. The acquisition is Youbet’s largest purchase to date and the company’s executives expect United Tote to play a major role in its future. Founded in 1959, Untied Tote is a manufacturer of machines that accept bets, calculate odds and pay out cash at race tracks all across the globe. Each year the firm processes more than $7 billion a year in wagers, approximately 90 percent of which is in North America. The company has kiosks at 9 racing facilities domestically, including Churchill Downs and New York Racing Association tracks and 11 facilities in Korea, Mexico, Spain and other foreign markets. Youbet Chairman, President and CEO Charles F. Champion said he had high expectations for the acquisition in a conference call to investors and analysts. “There’s a minimal overlap in the two companies’customer bases. We’re focused on the consumers, they’re focused on the business side of things. We’re a B to C company, they’re a B to B company,” Champion said. “We’re focused on gaming on the Internet and they’re focused on manufacturing and content development. Our key asset is our customers, theirs is relationships with the tracks and content. In terms of engineering, our competency is providing software, they develop hardware. And even our distribution channels are different: we’re predominantly an Internet company, they are at terminal kiosks.” In addition to handling wagers at tracks, United Tote has begun developing game content and contest offerings such as Fanta-Bet, a major competition wagering concept that was recently launched at Churchill Downs. With a $20 entry fee, Fanta-Bet players compete for daily prizes as they use “Fantasy Dollars,” to make wagers on racing at Churchill Downs and other featured tracks. These games blend head-to-head competition with the interactive wagering devices increasingly available at race tracks. Champion also expects the acquisition to further entrench Youbet as a force in the horse race wagering industry. “Right now, we have a 35 percent share in our market and they possess 33 percent in theirs,” Champion said. “Most importantly though, it meets our criteria for diversification. We’re currently a domestically-focused sports gaming company. They’re a global gaming and game content company and they have key relationships with key constituents that can enhance our existing gaming relationships domestically and internationally.”

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