Youbet posts record profit

Youbet.com, the online horse race wagering and broadcasting company, had net income of $1.3 million in the second quarter of 2005, up $1.3 million from net income of $40,000 in the second quarter of 2004, according to financial statements released by Youbet late Thursday.

The $1.3 million profit in the second quarter was the largest quarterly profit that Youbet has posted in its history. The second quarter includes the three races of the Triple Crown, which annually attract the most betting of any races during the year.

Revenue in the quarter was $23.5 million, up 41 percent compared with revenue of $16.7 million in 2004, according to the statements. Expenses increased 33.5 percent from $16.7 million to $22.3 million.

Total handle in the quarter was $120.5 million, compared with $83.1 million in 2004. Of the second-quarter total, $11.7 million of handle came from betting through International Racing Group, a rebate shop in Curacao that Youbet purchased in the second quarter. The figures from International Racing represented one month of wagering through the shop, translating, roughly, to $140 million in handle annually.

Gary Sproule, the chief financial officer of Youbet, said on Monday that the $140 million estimate would be "consistent" with the company's previous estimate for annual handle through International Racing, which has been cut off by the New York Racing Association because of concerns about the lack of regulation in offshore handle.

Youbet has one of the largest racing menus in the country, largely through an agreement with Television Games Network, a competitor, to offer wagering on TVG's exclusive signals. Under the agreement, TVG is paid nearly all of the revenue from betting on a TVG signal through Youbet.

According to the statement, Youbet paid TVG $5.7 million in the quarter in fees, compared with $4.0 million in the second quarter last year.

In related news, TVG announced Friday that second-quarter wagering through its Oregon-based hub was $114.1 million, up 29.3 percent from $88.5 million in the second quarter of last year. Television households for the company increased 24 percent over second-quarter distribution last year, to 15.5 million households, TVG said.