FansUnite Entertainment has reached an agreement with UK-based sportsbook DragonBet to migrate off its Chameleon Gaming platform as part of a strategy to streamline its business operations.
DragonBet will migrate off the white label betting platform on or around 3 September. This is despite the Welsh-facing brand having only joined the platform last year under a deal with FansUnite.
The migration comes after FansUnite in May agreed to sell the Chameleon source code to Betr. Under the deal, Betr is paying a total of $7.4 to take ownership of the platform.
FansUnite said the combined impact of the sale and DragonBet migration will result in approximately $7.1m (£5.6m/€6.6m) in annualised cost savings.
These savings include reductions in salary and selling, general and administrative costs. The business said these will be reflected in its financial results once the wind-up of operations of the Chameleon platform completes.
FansUnite added that it expects to generate positive cash flow in the fourth quarter of 2023 as a result of the strategic plan. This approach will see FansUnite increase its focus on the affiliate segment, which generated $23.0m of $27.3m total revenue in fiscal 2022.
Hutchings confirms Hutchings’ exit as CTO
Meanwhile, FansUnite has announced co-founder Jeremy Hutchings will step down as chief technology officer. Hutchings will leave on 30 September to pursue other opportunities, in response to the new focus on the affiliate segment.
FansUnite said Hutchings will be available to consult on its plans to monetise the Chameleon source code through potential further sales.
“Firstly, I would like to thank my co-founder Jeremy Hutchings for his contribution to FansUnite as he played an integral role during the early stages of the company and we look forward to watching his future success,” FansUnite CEO Scott Burton said.
“Additionally, we are pleased to have reached an agreement with DragonBet. This allows them to grow and will enable us to achieve roughly $7.1m in cost-savings.
“These transactions advance our efforts of streamlining our business operations and put us in a position where we can expect to generate positive cash flow in Q4 2023.”
Costcutting strategy pays off in Q1
FansUnite has seemingly already felt the benefit of its new approach. In Q1, the business said efforts to reduce costs and streamline operations helped cut net loss.
The strategy launched last year with the idea of focusing on its affiliate-centric businesses, primarily Betting Hero. Plans are now in motion to expand the brand by providing additional services through Hero Research and Hero Hotline.
This also led to streamlining certain business units to maximise cost efficiency and improve overall revenue growth. Certain strategic assets such as BetPrep and McBookie, as well as Chamelon, were sold as part of this. It also secured additional funding from Tekkorp.
As for Q1 impact, revenue was understandably lower, with the CA$8.7m posted being 10.3% down from the previous year.
However, cost of revenue was 13.2% lower at $3.3m and expenses were reduced by 1.7% to $11.6m. Comprehensive net loss for Q1 was $6.3m, in contrast to $11.2m last year.