Announcement PDF Q4 FY23 INVESTOR UPDATE 31 July 2023 BetMakers Technology Group | ASX:BET Disclaimer This shareholder update is dated 31 July 2023. The material contained in this document is a presentation of general information about the activities of BetMakers Technology Group Limited (the Company or BET) as at the date of this update. All monetary figures quoted within this document are in Australian dollars ($AUD) unless otherwise specified and provided on an unaudited basis. The document is not a prospectus, product disclosure statement or other offer document under Australian law or any other law. The information is provided in summary and does not purport to be complete. You should not rely upon it as advice for investment purposes, as it does not take into account your investment objectives, financial position or needs and does not include all information which an investor may require to assess the performance, risks, prospects or financial position of the Company. These factors should be considered, with or without professional advice, when deciding if an investment is appropriate. To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of this material is accepted by the Company, including any of its related bodies corporate. This update contains “forward-looking statements”. These can be identified by words such as “may”, “should”, ”anticipate”, “believe”, “intend”, “estimate” and “expect”. Statements which are not based on historic or current facts may be forward-looking statements. Forward-looking statements are based on assumptions regarding the Company’s financial position, business strategies, plans and objectives of management for future operations and development and the environment in which the Company will operate; and current views, expectations and beliefs as at the date they are expressed, and which are subject to various risks and uncertainties. The forward-looking statements contained within the update are not guarantees or assurances of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company, which may cause the actual results, performance or achievements of the Company to differ materially from those expressed or implied by the forward-looking statements. For example, the factors that are likely to affect the results of the Company include: general economic conditions in Australia and globally; exchange rates; competition in the markets in which the Company does, and will, operate; conduct of contracted counter parties; whether and climate conditions; and the inherent regulatory risks in the businesses of the Company. The forward-looking statements contained in this announcement should not be taken as implying that the assumptions on which the projections have been prepared are correct or exhaustive. The Company disclaims any responsibility for the accuracy or completeness of the information contained in this update, including any forward-looking statement. The Company disclaims any responsibility to update or revise any information in this update, including forward-looking statements to reflect any change in the Company’s financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based, except as required by law. The data projections or forecasts included in this presentation have not been audited, examined or otherwise reviewed by the independent auditors of the Company. You must not place undue reliance on these forward-looking statements. © 2023 by BetMakers Technology Group Limited. All rights reserved. | 2 WE SIMPLIFY BETTING Our mission is to power excitement, growth and sustainability of wagering globally. Q4 FY23 Review $24.8m +5% vs Q3 FY23 Q4 FY23 cash receipts from customers $99.1m FY23 Cash receipts from customers +6% vs FY22 1 $26.9m 2. -6% vs Q3 FY23 39% vs Q3 FY23 $41.0m2 1 2 Operational cash outflows Q3 FY23 OBJECTIVES SCORECARD ✔ Reduce and normalise the cost base ✔ Simplify the global operating model ✔ Drive operating scale through technology Deliver on the current opportunities: Continuation of strategic operational review – further execution during Q1 FY24 ✔ New markets – International fixed odds ✔ New clients – Caesars & Rikstoto Net decrease in cash outflows from operations ✔ Complete or nearing completion ✔ Commenced and progressing Continued execution toward positive cash flow generation from operations 30 June 2023 cash balance Operational Cash Outflows is derived from the Appendix 4C, calculated as “Net cash from / (used in) operating activities”, less “Receipts from customers”, less “Income taxes paid”, less $0.7m in one off restructuring costs paid in Q4 FY23 30 June 2023 cash balance includes $9.6m of restricted cash (customer funds held on deposit in relation to Global Tote and ADW operations). Net ‘unrestricted’ cash balance at 30 June 2023 of $31.4m Reduce and Normalise the Cost Base As announced on 31 May 20232, the Company embarked on a strategic restructure of global operations and technology to normalise the operating cost base. In Q4 FY23 the Company took concrete steps to streamline and consolidate key software offerings and to leverage technology monitoring and reporting capabilities, to normalise staff and operating overheads. o Reduced headcount by 15%3 to 485 with further reductions underway (projected to normalise at approximately 4404). o Adjusted the global operations, simplifying and streamlining its structure. o Introduced tools and automating various aspects of our operations to improve efficiency, productivity and reduce operating costs. 1 Operational Cash Outflows is derived from the Appendix 4C, calculated as “Net cash from / (used in) operating activities”, less “Receipts from customers”, less “Income taxes paid”, less $0.7m in one off restructuring costs paid in Q4 FY23 See ASX announcement dated 31 May 2023, “BetMakers executes strategic operational restructure” Compared to headcount as at 31 December 2022 4 As per management forecasts reflecting the current headcount, and the expected further reduction in headcount as a result of completing the global efficiency program 2 3 © 2023 by BetMakers Technology Group Limited. All rights reserved. | 5 Simplify the Global Operating Model Restructuring management to better align business focus and streamline internal communications and delivery: o Matt Davey appointed to the Board as President and Executive Chairman With a deep knowledge of the US gaming and wagering market, and a proven track record of growing company value, Matt will provide strategic direction, oversight and prioritisation. o Jake Henson appointed Chief Executive Officer Jake will focus on driving the operational excellence of the business and optimising profitability. REFINED SALES FOCUS ON CORE PRODUCTS: ○ Global Tote – digital and new systems ○ Managed Trading Services ○ API and Data solutions ○ Embedded turn-key racebooks o Todd Buckingham appointed Chief Growth Officer Todd, a founder of BET, will focus on developing and executing on international strategy and opportunities. o Chelsey Abbott appointed Chief People Officer Chelsey has been leading the People & Culture division of BET for 2 years and is critical in executing the strategic restructure and streamlining resources for optimisation and growth. o Christian Stuart departs as North American CEO US operations are now further streamlined into the relevant business divisions. MATT DAVEY JAKE HENSON TODD BUCKINGHAM CHELSEY ABBOT © 2023 by BetMakers Technology Group Limited. All rights reserved. | 6 Drive Operating Scale Through Technology The Company has commenced the consolidation of legacy technology and streamlining of product suites and customer offerings to allow more focused development investment, and improved product offering for customers and more operating margin to the business. o Streamlining of platform MTS offering – migration of Australian platform clients to a standard version o Consolidation of tote wagering platforms o Utilising full stack platform offering to drive turn-key embedded racebook solutions o Consolidation of racing data offerings – DynamicOdds, Form Cruncher and Punting Form © 2023 by BetMakers Technology Group Limited. All rights reserved. | 7 Deliver On the Current Opportunities The Company expects to deliver revenue growth by realising the revenues from the products already built and the customers already contracted. Key contracted opportunities include: CAYMANAS PARK During Q2 FY23 the Company launched fixed odds betting in Jamaica, at Caymanas Park1. BetMakers is currently facilitating fixed odds wagering on-track and is working closely with our local partners and regulators to i) expand the content offering available for fixed odds wagering ii) expand fixed odds accessibility to Off-Track shops, and iii) launch a domestic digital platform (expected launch Q2 FY24). DISTRIBUTION OF PENN ENTERTAINMENT CONTENT In April 2023 the Company executed a non-binding term sheet with Stronach Group’s 1/ST Content for distribution of BetMakers’ Global Racing Network’s (“GRN”) race meetings into international wagering markets2. This commercial relationship commenced 1 May 2023 and is providing extended distribution and monetisation of GRN’s North American thoroughbred content. 1 2 3 RIKSTOTO BetMakers is contracted as the tote technology and services provider for the country of Norway under a 10-year agreement with Norsk Rikstoto3. BetMakers is continuing to work with the client to design and develop the wagering solution (expected launch Q3 FY24). US FIXED ODDS See next slide for further detail. CAESARS PARI-MUTUAL AND RACING SERVICES See slide 10 for further detail. See ASX announcement dated 31 January 2023, “Q2 FY23 Quarterly Activities Report and Appendix” See ASX announcement dated 3 April 2023, “North American Racing and Key Management Update” See ASX announcement dated 23 May 2022, “BetMakers selected as new tote provider in Norway” © 2023 by BetMakers Technology Group Limited. All rights reserved. | 8 US Fixed Odds Opportunity o Core product established (technology, hardware and content solution): ➞ Launched Monmouthbets, the USA’s first web and mobile apps for fixed odds thoroughbred betting. ➞ Expanded fixed odds-eligible content with racetracks from the USA, Caribbean, and South America (including domestic deals signed with Penn National Gaming and Parx Racing). ➞ Deployed fixed odds betting to self-service retail terminals, increasing points of sale at Monmouth Park. o Focus on scale: ➞ Build out the app offering to include more functionality, and broader product offering by markets and bet types. ➞ Focus on being the content delivery partner, and not the content owner. ➞ Remain at forefront of new markets – active discussions with various US States regarding legislation or promulgate regulations, to permit fixed odds wagering on horse racing. ➞ Work closely with operators and content media providers to expand distribution and awareness of the product. © 2023 by BetMakers Technology Group Limited. All rights reserved. | 9 Caesars Racing Partner UPDATE o BetMakers signed an Agreement1 to become the exclusive provider of Pari-mutuel racing services for Caesars Entertainment Inc’s brick-and-mortar retail sportsbook locations in Nevada. o Under the Agreement1, BetMakers will provide middleware and software servies to connect Caesars’ William Hill Liberty platform into relevant pari-mutuel pools. o At the start of FY23, BetMakers launched the initial venue at Council Bluffs (Iowa). o The Company is progressing the technical approval process in Nevada. o A field trial will be undertaken at 2 of Caesar’s Nevada venues. Following successful completion of the field trials, a wider roll-out will occur - deploying the middleware software solution into the remaining 26 Nevada locations. This is expected to be completed in Q3 FY24. 1 See ASX announcement dated 23 December 2021, “Caesars Sportsbook names BET Racing Partner in Nevada” © 10 2023 by FY24 Strategic Focus CONTINUE TO RATIONALISE THE COST BASE DELIVER GROWTH FOCUS ON CAPITAL MANAGEMENT o Extract further efficiencies o With the operating model o The company has cash on the during Q1 FY24. o Simplify the operating model. o Deliver positive operating cash flows and a solid foundation to support growth. o Retire legacy technical platforms. addressed, return to a focus on revenue growth. o Deliver on the key opportunities we have contracted. o Focus on our strengths - providing world leading racing and betting technology and service solutions. balance sheet and no debt. o Market conditions are challenging, with limited capital, margin pressures, increased competition, and revised valuation metrics. o Take an opportunistic approach to strategic capital allocation. © 2023 by BetMakers Technology Group Limited. All rights reserved. | 11 Q4 FY23 4C Review Pursuing positive operating cash flow and establishing a sound foundation to maximise future growth: o Cash receipts from customers of $24.8m (+5% vs Q3 FY23) o Operational cash outflows of $26.9m1 (-6% vs Q3 FY23) o Negative $2.1m in normalised net cash from operations2 o Further cost efficiencies to be unlocked in Q1 FY24 1 2 Operational Cash Outflows is derived from the Appendix 4C, calculated as “Net cash from / (used in) operating activities”, less “Receipts from customers”, less “Income taxes paid”, less $0.7m in one off restructuring costs paid in Q4 FY23 Normalised new cash from operations is derived from the Appendix 4C, calculated as “Net cash from / (used in) operating activities”, less “Income taxes paid”, less $0.7m in one off restructuring costs paid in Q4 FY23 © 2023 by BetMakers Technology Group Limited. All rights reserved. | 12 Q4 FY23 4C Review o Receipts from Customers of $24.8m (+5% vs Q3 FY23). o Results of strategic operational restructure: ➞ Product manufacturing and operating costs (-10% vs Q3 FY23) - focus on managing and right-sizing of systems and cloud environment costs. ➞ Staff costs (-4%2 vs Q3 FY23) - reduction in the use of third party contractors during Q3 and progress made on company restructuring during Q4. ➞ Administration and corporate costs (no change vs Q3 FY23) - reduction in use of third party advisors during Q3 and inflated travel costs during Q4 as a result of operational strategic review. ➞ 1 Overall operational cash outflows of $26.9m (-6% vs Q3 FY23). o Investing activity cash flows include: 1 2 ➞ PP&E, primarily related to funds paid in relation to the development and construction of the new BetLine betting terminals and other on-track and in-venue hardware. ➞ Payments to acquire businesses relates to the final payment towards the purchase of TexBet ($1.375m) and $0.9m of historical due diligence costs. ➞ ‘Other’ predominantly relates to the movement in customer funds held on deposit in relation to Global Tote and ADW operations. AUD'000 Q4 FY23 Receipts from customers Product manufacturing and operating costs Advertising and marketing costs Leased assets costs Staff costs Administration and corporate costs Income taxes paid Government grants and tax incentives Other (provide details if material) Net cash from / (used in) operating activities 24,841 (8,154) (183) (582) (15,822) (2,845) (249) – (50) (3,044) Property, plant and equipment Payments to acquire businesses Payments to acquire intellectual property Other (provide details if material) Net cash from / (used in) investing activities (1,625) (2,276) (8,273) (12,174) Proceeds from exercise of share options Other (provide details if material) Net cash from / (used in) financing activities – – – Cash and cash equivalents at beginning of the period Net cash flow Effect of movement in exchange rates on cash held Cash and cash equivalents at end of the period 56,164 (15,218) 96 41,042 Operational Cash Outflows is derived from the Appendix 4C, calculated as “Net cash from / (used in) operating activities”, less “Receipts from customers”, less “Income taxes paid”, less $0.7m in one off restructuring costs paid in Q4 FY23 Comparative Q4 staff costs are net of $0.56m one off costs incurred in relation to the operational strategic review © 2023 by BetMakers Technology Group Limited. All rights reserved. | 13 FY23 4C Review AUD'000 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY2023 Receipts from customers Product manufacturing and operating costs Advertising and marketing costs Leased assets costs Staff costs Administration and corporate costs Income taxes paid Other (provide details if material) Net cash from / (used in) operating activities 23,770 (6,967) (247) (414) (17,688) (4,313) 54 (112) (5,917) 26,903 (10,452) (499) (711) (17,324) (3,772) 48 (111) (5,918) 23,569 (9,057) (174) (602) (15,867) (2,828) (35) (29) (5,023) 24,841 (8,154) (183) (582) (15,822) (2,845) (249) (50) (3,044) 99,083 (34,630) (1,103) (2,309) (66,701) (13,758) (182) (302) (19,902) Property, plant and equipment Payments to acquire businesses Payments to acquire intellectual property Other (provide details if material) Net cash from / (used in) investing activities (2,077) (1,650) (5,821) (690) (10,238) (2,384) (2,810) (787) 9,577 3,596 (1,076) 1,196 120 (1,625) (2,276) (8,273) (12,174) (7,162) A (6,736) B (6,608) C 1,810 D (18,696) Proceeds from exercise of share options Other (provide details if material) Net cash from / (used in) financing activities 2,580 (10,680) (8,100) 90 (416) (326) - - 2,670 E (11,096) F (8,426) Cash and cash equivalents at beginning of the period Net cash flow Effect of movement in exchange rates on cash held Cash and cash equivalents at end of the period 87,550 (47,024) 516 41,042 A $5.7m relates to funds paid in relation to the development and construction of the new BetLine betting terminals and other on-track and in-venue hardware. B $0.3m relates to deferred payments in respect of the Form Cruncher acquisition, $2.8m relates to payments to acquire Punting Form, $2.75m relates to payments made toward the purchase of TexBet, and $0.9m relates to due diligence costs. C $5.8m relates to the Year 1 Penn Entertainment content rights acquired and $0.8m relates to the Sportschamps IP rights acquired. D Relates to the movement in customer funds held on deposit in relation to Global Tote and ADW operations. E Predominantly relates to funds received from Waterhouse VC upon the exercise of share options. F Predominantly relates to funds used as part of the on-market share buyback. © 2023 by BetMakers Technology Group Limited. All rights reserved. | 14 INVESTOR QUESTIONS Email: investors@betmakers.com © 2023 by BetMakers Technology Group Limited. All rights reserved.