Youbet posts profit for '04

Youbet.com, the online account-wagering company, had net income in 2004 of $1.4 million before taking a tax allowance, compared with a net loss in 2003 of $4 million, according to financial statements released on Monday.

This was the first time that Youbet.com has posted a profit for the year.

Revenue for the year increased 20.5 percent, to $65.2 million from $54.1 million in 2003. Operating expenses increased 11.7 percent, to $64 million from $57.3 million.

The company claimed a $3.25 million income-tax benefit for 2004 that increased its net earnings to $4.6 million, or 15 cents per share, compared with the $1.4 million net profit on operating income.

In 2004, Youbet.com was unable to offer wagering on tracks owned by Magna Entertainment, including Santa Anita Park and Gulfstream Park. Late in 2004, Youbet.com signed an agreement with Magna restoring the signals to the service for 2005.

Many of Youbet's most popular tracks, including those owned by the New York Racing Association and Churchill Downs, are offered through a licensing agreement with Television Games Network, a competing account-wagering service. The licensing agreement awards the vast majority of betting revenue on the tracks through Youbet to TVG.

In 2004, Youbet paid TVG $14.4 million in licensing fees, according to the financial statements, its second-largest line-item expense. Commissions to racetracks were the largest line-item expense at $26.2 million.

In addition, Youbet announced Monday that it would offer a non-wagering site in mainland China beginning in March.