Youbet posts $440K loss

Youbet.com, the online horse racing and account-wagering company, lost $440,000 in the third quarter of 2006 after expenses rose sharply because of the acquisition of the bet-processing company United Tote, according to financial statements released Tuesday.

Last year during the third quarter, Youbet had net income of $1.8 million on revenue of $26.1 million. During this years third quarter, revenue increased 42.3 percent to $37 million, but expenses, largely because of United Totes operation, rose 53.3?percent to $37.4 million.

In a statement, Youbets chief executive officer, Charles Champion, said that legal fees to help with an arbitration proceeding over the fees the company pays to a competitor, Television Games Network, for some racetrack signals were $700,000 during the quarter. In addition, Youbet paid a consultant $400,000 during the quarter, the statement said.

Youbet.com purchased United Tote in the first quarter of this year.

In the third quarter, handle through Youbet increased 9 percent to $118.4 million, compared with $108.1 million in the third quarter of last year. Its International Racing Group subsidiary had handle of $98.4 million in the third quarter, compared with $43.2 million in the same period last year.