As the digital and sports betting landscape continues to evolve at a rapid pace, NorthStar Gaming stands out with remarkable financial achievements in the third quarter. The company’s strategic initiatives have paid off, with revenues soaring by a notable 135%, reflecting a period of robust growth and expansion.
NorthStar’s success in Q3 can be partially attributed to its original “Insights” content – proprietary editorial features designed to offer players expert advice and guidance on betting strategies and opportunities. Notably, these features seem to resonate well with the gaming community; players who engaged with the content deposited 40% more on average than other players, showcasing the significant impact of informative and value-driven content on user engagement and spending.
Another contributor to NorthStar’s recent triumph has been the acquisition of Slapshot Media, a company that provides marketing and operational management services to sports betting and igaming operators. In the third quarter alone, Slapshot Media was instrumental in generating an additional $200,000 in managed services revenue, underscoring the strategic relevance of the acquisition.
Following the conclusion of Q3, NorthStar leveraged the expertise and resources of Slapshot Media to catalyze its expansion across Canada. Initially only available in Ontario since its launch in May 2022, NorthStar is now spreading its wings, rolling out its offerings through NorthStarBets.com to encompass all Canadian provinces and territories, signaling a major step in the company’s nationwide growth strategy.
Reflecting on the recent financial outcomes, CEO Michael Moskowitz expressed satisfaction with the company’s growth trajectory, particularly in what’s traditionally a slower period for the industry. He emphasized the dual achievement of expanding NorthStar’s customer base while effectively managing costs. Moskowitz remains optimistic about the company’s growth potential, especially as it enters Q4 – a quarter bustling with sports activities and betting opportunities with most major North American sports leagues in full swing.
From a numbers perspective, gaming activities accounted for $4.5 million of the total revenue during the three months leading to September 30th, marking a sizable increase of 125% compared to the previous year. This substantial lift was mirrored in services such as Slapshot Media, which had no comparative figures since the deal was only finalized in 2023.
Wagers placed on NorthStarBets.com were another area of significant growth, totaling $138.0 million, which is an increase of 139.6% year-on-year. This spike in wagers fed into the overall revenue increase during the third quarter.
On the expenditure side, fees for service providers and operator participant fees saw an uptick due to the expansion of NorthStar’s offerings. However, marketing expenses were cut by an impressive 55.8% to $2.0 million, which resulted in a 9.4% reduction in total expenses, bringing them down to $5.8 million.
Notably absent from the disclosed financials were specifics on taxes and other financial details. However, NorthStar did reveal a net loss for Q3 of $4.2 million, which, though substantial, is an improvement from the $6.1 million loss incurred in the same period the previous year.
In terms of year-to-date performance, the figures are striking. Gross gaming revenue soared by 420% to $13.0 million, inclusive of $12.6 million from gaming activities and the remainder from managed services. Total wagers on NorthStarBets.com also skyrocketed by 500.3% to $434.6 million.
Looking at the broader financial landscape, while certain costs like service provider fees have risen, the company managed to lower marketing expenses. Nevertheless, increased outlays in areas such as public listing costs pushed total expenses to $22.7 million, a 65.7% rise from the previous year. Consequently, this led to a net loss of $18.0 million, which is wider than the $13.6 million loss from the past year.
In light of the financial report, Moskowitz detailed how the company’s strengthened balance sheet, strategic partnerships, continuous innovation in product offerings, and the brand’s development across Canada, give him confidence in the company’s growth for the remainder of 2023 and into the following year.
The announcement of the Q3 results comes at a time of changes within NorthStar’s executive team. Jennifer Barber, the Chief Financial Officer (CFO) since June 2022, will leave the company on December 1st to pursue another opportunity. Stepping into the interim CFO role will be Chin Dhushenthen, the current Vice-President of Finance and Compliance, ensuring a smooth transition and stability in NorthStar’s financial leadership.
