In a mixed second quarter, Ontario-based sportsbook and igaming operator Northstar Gaming reported continued losses despite record revenue results.
Northstar reported growth in revenue, trading volume and gross margin in the second quarter. This comes after the company took over the business by Canadian real estate company Baden Resources.
The business said this was due to customer increases and an increase in betting activity. Despite this, losses amounted to $4.8 million, up only slightly from last year’s period.
Chief executive and chairman Michael Moskowitz highlighted the role that integrated editorial content across gaming platforms plays in driving revenue growth.
Company Insights said its content “is becoming increasingly popular with customers seeking information to improve their betting experience.”
“As the business scales, we deliver improved financial performance through operating leverage and revenue growth is expected to continue to outpace expenses.”
Moskowitz also highlighted how recent mergers and acquisitions will support the company’s future growth.
“We expect our ongoing marketing and product initiatives to continue to support growth for the rest of this year and into 2024,” he added.
“The acquisition of Slapshot Media, which we completed in the second quarter, was a crucial milestone in our goal to expand the NorthStar Bets brand outside of Ontario by the fall and further strengthen our existing infrastructure and content.”
High costs push Northstar into the red in the 2nd quarter
Northstar recorded CA$4.6 million in the three months ended June 30, compared to CA$527,000 reported by the business in the same period of the previous year. The business’s revenue came from a handhold of $160.1 million.
Despite the reported revenue growth, the operating costs were also high and consuming any potential profits.
The company’s marketing costs fell from CA$4.6 million a year ago to CA$2.6 million, with a resultant increase in the company’s general and administrative costs.
These amounted to CA$3.8 million, more than double the CA$1.3 million reported in the same period of the previous year.
Overall costs rose 17% to 6.4 million, compared to CA$5.5 million reported in the second quarter of 2022.
This resulted in the company’s loss falling slightly from CA$5.6 million to CA$4.8 million from the previous year.
The trend continues in six months
For the six-month period, the business reported revenue of CA$8.3 million. During this time, Northstar’s costs rose to CAD 16.2 million with a listing cost of C$2.8 million.
This resulted in a loss of $13.5 million in the six months ending June 30. He did not pay taxes in three or six months due to losses.
Northstar announces new financing worth C$10 million
Northstar also announced new financing worth C$10 million today. This financing, which will expire in September, will be financed through the issuance of shares and the signing of a new debt agreement.