TopBetta Holdings Ltd (ASX: TBH) saw its share price soar 42% to 27 cents yesterday, with nearly 12 million shares changing hands.
For a company with a market cap of just $26 million – that's a lot.
TopBetta is an online betting company with its primary asset being a wholesale tote product (The Global Tote) which enables licenced wagering operators, including corporate bookmakers and tote operations around the world to participate in a global pool. International thoroughbred racing will be the first pooled products launched, and will be followed by sports and other racing fixtures.
TopBetta also aims to introduce social gaming into sports betting including things like 'fantasy sports'.
Yesterday TopBetta announced that Ladbrokes, the leading British bookmaker with more than 2 billion in annual revenue had signed on as the first wagering operator to back The Global Tote. The company also announced that it had received approval from Racing NSW for NSW thoroughbred horse racing.
Clearly, investors are excited about the disruptive element of The Global Tote as well as the potential for punters anywhere in the world to gamble on events anywhere. The social media aspect also appears highly promising given the success of the likes of Facebook and Twitter.
TopBetta is growing clients at a fast clip, with more than 7,500 active clients for the three months ending October 31. That's almost 50% more than at the end of September – although off a low base.
Foolish takeaway
TopBetta is not yet profitable, so investing today is still a high-risk play that may or may not work out. There's always the potential for larger players to throw many millions of dollars at creating a competing product too.
