Youbet losses slow in 2002

Youbet.com, the online wagering company for horse racing, lost $8.9 million in 2002 on revenues of $10.2 million, company officials said late Monday.

The 2002 loss was a $5.9 million improvement on 2001, when net loss was $14.8 million. Revenues in 2002 were up $4.4 million, or 75 percent.

Chuck Champion, Youbet.com's chief executive, emphasized that the company had positive cash flow in the fourth quarter of $226,000, the first time that Youbet has taken in more money than it has spent during a quarter. Still, operating loss in the fourth quarter was $1.2 million, compared with a $5.5 million loss in the fourth quarter of 2001, when cash flow was a negative $4.5 million.

Handle through Youbet was $163 million, up 72 percent over 2001, when handle was $95 million. Champion said that handle grew in every quarter through 2002, topping out at $50 million in the fourth quarter.

Champion was brought in to head Youbet in the middle of last year in order to rein in spending and move the company toward profitability.

Expenses were cut by $4.4 million in 2002, the company said, from $17.4 million to $13 million.

"I feel comfortable reporting to our investors, clients, and industry friends that Youbet's turnaround is in place and that management believes that our competitive positioning and financial improvement will continue in 2003," Champion said.

With agreements with several of its competitors, including Television Games Network and Magna Entertainment, which operates the XpressBet account-wagering system, Youbet takes bets on nearly every racetrack in the country. The bets are processed through a hub in Oregon.