foreign managing director and group CEO of coinspet Sam thanks very much for joining me today no problem at all Tim good to chat this week obviously there's there's only one bit of news that really um I would uh you know ask you about that's that's the the sale to Fanatics um of the US operations uh to get straight into it for some context could you walk us through um to start off with when did you ultimately decide that you that's if you're going to sell the US operations uh look we've we've stated publicly that we've been in discussions with parties exploring our strategic strategic options not just in North America but but you know globally without with Australian business and our Canadian business as well um look it all comes down to what is the right outcome for shareholders value maximizing outcome for shareholders um you know we believe that this outcome is the right risk-adjusted value maximizing outcome for shareholders I mean by that I mean look um we've acknowledged that competing uh in the US is expensive it's a it's a high cost of doing business over there related to the partner fees and license fees that you need to pay the state by state environment and that just does require a degree of scale in order to to I think deliver the economics that one needs to to succeed um so look that it's become increasingly I suppose clear that that's a that's a challenge I think the deal that we've stopped with Fanatics is quite Innovative in a couple of ways because it's not just the headline price of U.S 150 million dollars or Australian 222 million dollars um it's the the structure of the the two stage closing process as well and what that basically means is um poster shareholder vote which we're aiming to have on June 30 um Point spit bar 21 million US dollars is removed from the ongoing funding needs of of the US business so obviously those funding needs are pretty material so what that allows us to do is to collect 150 million U.S less than 21 million dollars that we will contribute that allows us to preserve the capital that we have on the balance sheet um and our last 4C reporting we had over 250 million dollars um on the on the balance sheet and I think we've um we've flagged the market um come the end of the year that we'll have more than 200 million um end of the financial year for us which is June 30. so the deal can be looked at in terms of the price achieved um for selling their us business um but also the cash that we retain on on the balance sheet um and I suppose also the the other element here is we did have some large commitments uh in the US you know our NBC deal you know they were the type of commitments that were so that was a great asset but it's a great asset for a company that has a you know material market share and is heading in the direction that um I suppose allows for a 50 million dollar per random investment to to NBC so you know to achieve the headline price to retain the cash on the balance sheet um to be able to find a buyer who would take on those commitments that was really the aim um when did we decide to do it well it's all about finding a deal at work so you're in discussions if you get to a point where there's a structure that that works and we think this is a structure that maximizes the outcome for shareholders and when you think about at a closing of this deal and we expect this deal to close around in totality the final closing around March next year we're left behind with a business that we've said is going to be uh Break Even heading towards profitability with our Australian business profitable offsetting the Canadian business which is earlier uh earlier stage in a sort of a capital light environment so that really shows you that most of the loss that we or the burn that we were accumulating relates to the US business the U.S business the technology supporting the US business and some of the corporate costs supporting the US business so look we come to this we came to this decision as as what's best for shareholders and we're you know really happy that this is a value maximizing deal for shareholders at this at this point in time were there any other offers on the table because you talked about kind of you know you're in talks and obviously were reports of kind of talks with Fanatics previously as well prior to this confirmation yeah I mean we've we've acknowledged that we've had um various discussions over the journey I'm not gonna I'm not going to get into specifics um but I think you know this having reached the outcome here you know this talks to the fact that the board has explored a range of possibilities and this is the um now this is the optimum outcome that we could achieve um on behalf of shareholders in terms of the structure of that deal headline price retention of cash on the balance sheet and a party that is able and willing to take on the commitments that the business had you've talked about the the climate in the US for operators I guess from the horse's mouth just just how tough is it because there were there were a few Brands who simply just closed the US business and and you know the high cost Associated you know is is it just simply one of the toughest markets out there um yeah I mean look we went in there obviously with um significant aspirations and we had some early traction I think we're probably the only party outside of the US um that that did so you know that got some traction um in these first handful of years of the US market I think obviously the market share that has Consolidated in FanDuel and to a lesser extent DraftKings is is significant and I probably I'm not sure anyone expected them to be as dominant or as strong as they as they have been um so you know from a market share perspective those guys are getting sort of stronger and stronger and they can reinvest that um those those dollars into continuing to grow their businesses but yeah I mean it's uh the fact that it's a we're in 14 states in the US um you know 14 States and the costs that go with the demands of those different 14 States is very different than running one operation that covers 14 jurisdictions you know this this cost is 14 sets of costs involved um the fact that you need to pay partner fees in most instances for your license whether that's a casino or a race track or whatever it may all be um so yeah it is it is expensive as a base slime and to do business and you need a degree of scale to overcome the fact that the unit economics are you know a little bit more challenged and if we compare that to for example the Canadian Ontario Market you know very deliberately you know we've held on to our Ontario business um it leaves us with exposure to a North American Market we believe it leaves its exposure to the most most attractive of our 15 North American markets in that and it has an acceptable tax rate there's no partner fees obviously it has in that single jurisdiction that has eye gaming and sports betting sitting side by side in America we had 14 states only four of which had I came into had 10 states that were sports betting only in the four and with igaming having eye gaming and sports betting sitting side by side obviously allows you know more efficient paybacks and a quicker path to profitability and so we believe you know that Ontario Market you know very deliberately for us we've held on to that we have it's where you recognize that one of the successes we've had if going into the North America Market is the product that we've built you know from scratch and we made the acquisition of Bannock Technologies which accelerated Us in the live betting so we have this Market leading you know little top tier live betting capability we have a eye gaming capability we can exploit those in the Canadian Market um and in Ontario in particular in a structure where we believe that the unit economics are more favorable and that's the path the profitability is clear you've kind of knocked off one of the questions that I had that I was going to ask you know that the rationale behind keeping the Canadian business but to maybe follow on from that is does that mean then long term you know the Australian and Canada businesses are a focus and and U.S us is sold off now but Canada you're kind of there for the Long Haul absolutely I mean one of the um one of the realities of the US and Canada you know when we were setting up and getting live in those 15 jurisdictions is it's a big gum it's a big effort you know it's a big demand in terms of resources and focus um you know our Australian business has been ebitda positive for the last three years um we really believe that we've um increased Focus that we've started to provide on it in the last 12 months you know we've we've finally delivered some you know product improvements that are focused on the Australian business we've delivered some promotional efficiency type um introductions that are really driving the performance of the Australian business so now we believe that with the greater Focus that comes from removing you know that U.S business the Australian business can continue to flourish and equally we think the combination of Australia and that favorable environment that is Ontario Canada that's you know that's something that we're comfortable with that combination I suppose a lot of our technology Baseline expertise and a lot of our trading expertise sits in our Australian business so we'll leverage that um into into our Ontario business our Ontario presence in terms of head count is very light so that combination I suppose of the head office presence um in Australia from technology and trading perspective um really driving performance in Australia but also in Ontario so yeah very deliberate to keeping that combination the more advanced Australian Market the more early stage Ontario Market where we're really we're really excited about what we can achieve in those two markets you mentioned you know maximizing shareholder value and obviously you wouldn't have done the deal if it wasn't you know a degree of happiness with it but it has been suggested that for Fanatics perhaps you know it's a bit of a bargain price because all the state licenses that you kind of achieved and you put a lot of marketing work obviously even you know as you say the NBC deal and and signing you know Shaquille O'Neal and things like this you know is I guess it might be difficult for you to say I'm not speaking on behalf of fanatics but you know is that potentially a fair assessment oh God I don't think so I mean again you know we've you know we've um we're comfortable that we have explored all opportunities you know to maximize value for shareholders I'm in the US market you know and then obviously the stat the alternative is was the status quo um for us as a company if we didn't um get away a transaction like this in America and that is they're looking to raise Capital as a loss making company in the current environment where where profitability isn't within touching distance that's a you know that's a very challenging sort of equation um so on the one hand you know we were obviously motivated to um to find a solution to that but we over at over a decent period of time you know we have we have explored a number of of opportunities so I look at it this way you know I think um Fanatics have bought a fantastic baseline from which obviously they're looking to grow you know what if they bought they bought some great technology great product great people Market access you know and in some instances you know that market access and save them some significant upfront license fees but on the negative has to be acknowledged you know they've taken on some big commitments and they've taken on a business that is um you know losing a decent amount of money even though we found a bunch of savings and our Revenue profile has been improving in our loss and burns have been decreasing they're still taking on um you know a profile of a business that in the current environment isn't really popular you know no one wants to be in a loss making business at the moment um with a you know with a a longer Pathway to profitability they've taken on that that business and obviously they have great confidence in their ability to take what we've built and turned into that 10 15 20 market share that they're that they're aiming for um but no I don't I don't agree that you know that this is a sort of a lopsided outcome it's the reality of the world's changed a lot in the last two or three years the types of valuations that were out there two or three years ago you can argue where they were they real I mean our U.S revenue is probably three to four times now what it was when we were at Peak valuation you know so the market is the market they put values on you know on on where where things are at both take into account the macro environment and the and the particulars of the company but now we've got we've got the best outcome that we could for shareholders um they are they are the natural buyer for the business um and um you know I wish them luck in terms of you know taking what we've we've built in and flourishing from here yeah um as someone who's worked with them in in this deal and perhaps I guess as a future Outsider to the market looking in from Canada and Australia you know do you think they you know have us have a strong chance of achieving that market share given you know FanDuel DraftKings uh MGM and and Etc because fnatics has been talked about for a while a lot of anticipation because of the old merchandising business model um you know I guess an objective view from yourself do you think they can achieve and make Headway yeah look I I I probably don't want to provide you know too much commentary on that I think they've got um I think they've got as good a chance as you would expect with let's call it the assets that they're heading off with they've got obviously a good team we think we've given them a great leg up you know with what we're selling to them um it is tough but you know I think um they're well capitalized they have that um those assets I suppose that have been well spoken about in terms of the 95 million database and they've got relationships with the leads Etc so you know I think um I think they've got the right to be optimistic about what they can achieve um but who knows it's it look the FanDuel and DraftKings are already very large you know and and earning significant revenues and um no doubt they'll keep the foot down and and keep trying to maintain that that sort of motor around them a final question for me takes us take us back to points but uh obviously the US operations a big week for for you guys a lot of work and as you've said a lot of conversations during and post deal what's the future future for you guys now you know you mentioned you're focusing on the product when we spoke a couple of years ago there was already that emphasis on on trading and the kind of the uniqueness of the product um yeah what what what are your main plans in in the Australian business and still in the Canadian one as well yeah I mean we we feel again one of the things that we have done well when we set off on that North American journey is what we've built um from our technology and product perspective you know as part of this deal you know Fanatics get sort of um full copy of full access to what we've built and we get full copy and access to what we've built and we go our separate ways at closing so both parties I suppose effectively own the technology and are free to sort of exploit it um we can't enter the US for 18 months and they can't go to Australia for 80 months but other than that we're both parties are free to to exploit the technology so you know we will still continue to be a technology and product LED company now that's one of the things again that attracted us about the Ontario Canadian Market there are restrictions there as it relates to Promotions to get people to sign up accounts the same things exist in Australia we have some restrictions around you know using inducements to get people to open accounts what does that mean that means you know you you it's a more of a Reliance on the quality of product and product marketing and that and that suits us in both of those markets so yeah we've got this fantastic team and this product that we've built you know we'll continue to develop it and with the greater Focus that we can provide on those two markets being Australia and Canada you know we have an expectation that um Alberta will probably join Ontario in the legalized Canadian Market perhaps you know later next year um so we think that that Tam up there in Canada continues to grow it's already past 2 billion I think on the way to two and a half billion dollars of ngr so really attractive Market Australia is a five billion dollar market so there's plenty of time for for us to work with and with a greater Focus the US business obviously as we said it was 14 jurisdictions um a large team very competitive you can imagine it's taken up a lot of thinking and resources on behalf of the points of their group so um you know we're excited to get to get going um in Australia and Canada with a with a greater focus and yes it will be a product-led strategy well Sam thanks much for your time congratulations on the deal I know it's been a busy week for you so hopefully you can you can get some some rest maybe some celebrations in at some point thanks Steve appreciate it cheers thanks very much foreign