Youbet net income declines

Youbet.com, the online horserace broadcast and betting company, had net income of $1.45 million in the second quarter of 2009, or 3 cents a share, according to financial statements released late Wednesday, down 27.9 percent compared to the company's net income in the second quarter of 2008.

Revenues in the quarter were $24.0 million, compared to $21.8 million in the second quarter of 2008, a gain of 10.1 percent. However, Youbet posted sharply higher expenses in track commissions, from $10.2 million in the second quarter last year to $13.8 million in the second quarter this year, in part because of new content Youbet offered as a result of deal struck with TrackNet, a company owned by Churchill Downs and Magna Entertainment Corp. TrackNet has been attempting to drive up rates for its content.

Total handle during the quarter through the online platform was $128.5 million, up 12.9 percent compared to handle in the second quarter last year of $113.8 million. In a release accompanying the financial documents, Youbet officials said that the growth in handle was primarily attributable to the addition of the TrackNet content to the service.

In addition to its wagering platform, Youbet also owns a bet-processing company, United Tote, which generates the bulk of its revenue from a percentage of wagering transactions. Revenues in the quarter from United Tote were $5.8 million, down 16.9 percent compared to revenues of $6.9 million in the second quarter of 2008, according to the financial statements, for a loss from continuing operations of $710,000 in the quarter. The decline was attributable to the erosion in industry-wide handle during the quarter.