Youbet shows a profit

Youbet.com, the online horse racing wagering company, had earnings before taxes of $791,085 in the third quarter of 2004, reversing a loss in the third quarter of 2003 of $617,853, according to financial records released by Youbet late Wednesday.

Revenues in the quarter were $17.2 million, compared to $14.3 million in the third quarter last year. Operating expenses rose from $14.8 million to $16.4 million, largely because of increased commissions to racetracks and Television Games Network, along with increased costs for marketing.

Youbet has posted net income of $845,962 for the first nine months of 2004, putting the company on track to post its first-ever profitable year. Last year through the first nine months, the company had lost $2.8 million.

Youbet's after-tax income in the quarter was $4 million, after the company recorded a $3.3 million non-cash benefit on its income taxes.

The company said that handle in the quarter was $83.7 million, an increase of $11.2 million, or 15 percent, compared to the third quarter of 2003. The company had handle of $82.2 million in the second quarter of this year.

In 2004, Youbet and other account-wagering companies have been unable to offer wagering on tracks owned by Magna Entertainment, including Gulfstream Park and Santa Anita Park. Magna declined to provide its content to other account-wagering companies at the beginning of this year in order to drive business to its XpressBet account-wagering service.