NorthStar Gaming Reports Preliminary Results for Fourth Quarter and Full Year 2023

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Company delivers 103% Revenue Growth in Q4 2023

Toronto, Ontario–(Newsfile Corp. – January 22, 2024) – NorthStar Gaming Holdings Inc. (TSXV: BET) today provided a business update and announced selected preliminary financial results for the three- and 12-month periods ended December 31, 2023(1). All figures are quoted in Canadian dollars.

“We ended the year with our strongest quarter to-date, highlighted by record wagers and revenue as well as accelerating growth in player acquisition and deposits,” said Michael Moskowitz, Chair and CEO of NorthStar. “In the fourth quarter we also solidified our balance sheet and significantly expanded our addressable market.”

Preliminary results for the three months ended December 31, 2023:

• Revenue, including managed services fees, net of bonuses, promotional costs and free bets, is expected to be approximately $6.5 million in Q4 2023, an increase of 103% over $3.2 million in Q4 2022.

• Total Wagers(2) at Northstarbets.ca are expected to be approximately $213.3 million in Q4 2023, an increase of 90% compared to $112.3 million in Q4 2022.

• Gross Gaming Revenue(2) at NorthStarbets.ca is expected to be approximately $7.6 million in Q4 2023, an increase of 85% over $4.1 million in Q4 2022.

• Gross margin is expected to be approximately $2.5 million in Q4 2023, an increase of 127% over $1.1 million in Q4 2022, and represents approximately 39% of revenue compared to 35% of revenue in Q4 2022.

Preliminary results for the year ended December 31, 2023:

• Revenue, including managed services fees, net of bonuses, promotional costs and free bets, is expected to be approximately $19.5 million in 2023, an increase of 242% over $5.7 million in 2022.

• Total Wagers(2) at Northstarbets.ca are expected to be approximately $648.8 million in 2023, an increase of 251% compared to $184.7 million in 2022.

• Gross Gaming Revenue(2) at NorthStarbets.ca is expected to be approximately $22.5 million in 2023, an increase of 208% over $7.3 million in 2022.

• Gross margin is expected to be approximately $7.1 million in 2023, an increase of 492% over $1.2 million in 2022, and represented approximately 36% of revenue compared to 21% of revenue in 2022.

Recent Operating Highlights

• During the fourth quarter, Spreads.ca, an iGaming site owned and operated by the Abenaki Council of Wolinak under the license issued by the Kahnawake Gaming Commission, was rebranded to Northstarbets.com. The Company earns managed services fees from the Abenaki Council of Wolinak for its exclusive management of Northstarbets.com.

• In October 2023, the Company completed a private placement financing of approximately $10.3 million consisting of common shares, warrants and convertible debentures.

• December 2023 was an especially strong month and is expected to yield record highs in wagers, new customers acquired and new deposits in any single month since launch.

• NorthStar was recently included in a Diversified Watch List report from Paradigm Capital showcasing several companies that should be on investors’ radars, a potential precursor to full analyst coverage.

• The ongoing optimization of the Company’s business model led to a significant decrease in cost of acquisition per customer and a more attractive payback ratio on acquired players.

• Readership of the Company’s proprietary Insights content increased 40% year-over-year in the fourth quarter. Players who read Insights content generate significantly higher deposits and wagering, on average, than other players.

“We are very optimistic about our growth trajectory and ability to create shareholder value in 2024,” added Mr. Moskowitz. “We plan to roll out exciting innovations to our product suite that will further differentiate NorthStar Bets as a premium offering uniquely suited for the Canadian market. Continued momentum across our key metrics, together with an ongoing focus on cost management and optimizing our marketing, should deliver increasing operating leverage as the year progresses.”

The Company expects to file its complete, audited financial results for the year ended December 31, 2023 by the end of April 2024. Given the length of time before full results will be available, the Company has elected to announce these preliminary results in the interest of transparency for its investors.

About NorthStar

NorthStar proudly owns and operates NorthStar Bets, a made-in-Ontario casino and sportsbook gaming platform that provides players with a uniquely local, premier user experience. The NorthStar Bets sportsbook provides real-time news, stats, analysis and scores directly in the betting environment along with the most popular online casino games. NorthStar’s subsidiary, Slapshot Media Inc., provides managed services to Northstarbets.com an iGaming site owned and operated by the Abenaki Council of Wolinak.

A Canadian company, NorthStar is uniquely positioned to become a convergence leader in the intersection of sports media and sports wagering thanks to its partnerships and agreements with leading media companies. NorthStar is committed to operating at the highest level of responsible gaming standards.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Non-IFRS Financial Measures

Throughout this document, management uses certain non-IFRS financial measures and supplementary financial measures to evaluate the performance of the Company. The term “Gross Gaming Revenue” is a non-IFRS financial measure and the term “Total Wagers” is a non-IFRS supplementary financial measure. These measures are not recognized measures under International Financial Reporting Standards (“IFRS”) and do not have a standardized meaning prescribed by IFRS and are, therefore, not necessarily comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective and to discuss NorthStar’s financial outlook. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures, including industry metrics, in the evaluation of companies in our industry. Management also uses non-IFRS measures and industry metrics in order to facilitate operating performance comparisons from period to period, the preparation of annual operating budgets and forecasts and to determine components of executive compensation.

Total Wagers

Total Wagers is calculated as the total amount of money bet by customers in respect of bets that have settled in the applicable period. Total Wagers does not include free bets or other promotional incentives, nor money bet by customers in respect of bets that are open at period end. Total Wagers is used to provide investors with supplemental measures of our operating performance and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures.

Gross Gaming Revenue

Gross Gaming Revenue is calculated as dollar amounts bet by customers less the dollar amounts paid out to the customers in respect of such bets which have settled in the applicable period.

Reconciliation of Non-IFRS Measures to IFRS Measures

In Q4 2023, the Company expects to report $7.6 million of Gross Gaming Revenue and has provided a reconciliation to the most comparable IFRS financial measure (Revenue) as follows:


Three months endedThree months ended
Dec 31, 2023Dec 31, 2022

$ million$ million
Gross gaming revenue from wagered games (sports- betting and casino transactions)$7.6$4.1
Bonuses, promotional costs and free bets-$1.3-$0.9
Gaming revenue from wagered games (sports- betting and casino transactions)$6.3$3.2
Sub-total Gaming revenue$6.3$3.2
Other revenue from managed services$0.2
Revenue$6.5$3.2

Cautionary Note Regarding Financial Estimates

The financial estimates set forth above are based on an initial review of the Company’s operations for the three months and full year ended December 31, 2023 and are subject to change. These figures are preliminary and are inherently uncertain due to a number of factors, and remain subject to the Company’s management’s and audit committee’s reviews and the completion of regular financial closing and review procedures and audit procedures for Q4 FY 2023 and FY 2023. The Company’s independent registered public accounting firm, KPMG International, has not audited, reviewed or performed any procedures with respect to the accompanying financial estimates and other data, and accordingly does not express an opinion or any other form of assurance with respect thereto. These financial estimates should not be viewed as a substitute for audited financial statements prepared in accordance with generally accepted accounting principles and are not necessarily indicative of the Company’s results for any future period. Additional adjustments to the preliminary figures presented above may be identified, and final results for the relevant fiscal periods may differ materially from these preliminary figures and will not be finalized until after the Company completes its normal year-end accounting procedures, including execution of internal controls over financial reporting. These financial estimates are intended to provide information about management’s current expectations regarding certain aspects of NorthStar’s financial performance. Reliance on the information presented herein may not be appropriate for other purposes.

Cautionary Note Regarding Forward-Looking Information and Statements

This communication contains “forward-looking information” within the meaning of applicable securities laws in Canada (“forward-looking statements”), including without limitation, statements with respect to the following: financial guidance for 2023 and 2024, expected performance of the Company’s business, expansion into new markets and future growth opportunities and expected benefits of transactions. Specifically, statements regarding NorthStar’s preliminary financial results for Q4 FY 2023 and FY 2023 are considered forward-looking statements. The foregoing are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and allowing investors and others to get a better understanding of the Company’s anticipated financial position, results of operations, and operating environment. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. This forward-looking information is based on management’s opinions, estimates and assumptions that, while considered by NorthStar to be appropriate and reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information. Management’s estimates of Revenue, Total Wagers, Gross Gaming Revenue and Gross Margin for Q4 FY 2023 and FY 2023 as set out above are subject to significant risks including, without limitation: risks related to the Company’s business and financial position; risks related to changes and adjustments to these preliminary estimates resulting from the Company’s management’s and audit committee’s reviews and/or regular financial closing and review procedures and audit procedures; risks associated with general economic conditions; adverse industry risks; future legislative and regulatory developments; the ability of the Company to implement its business strategies; and those factors discussed in greater detail under the “Risk Factors” section of the Company’s most recent annual information form, which is available under NorthStar’s profile on SEDAR+ at www.sedarplus.com. Many of these risks are beyond the Company’s control.

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking statements. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking statements. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents NorthStar’s expectations as of the date specified herein, and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

For further information:
NorthStar Gaming
Corey Goodman
647 530 2387
investorrelations@northstargaming.ca

Investor Relations:

RB Milestone Group LLC (RBMG)

Northstar@rbmilestone.com

1 See “Cautionary Note Regarding Financial Estimates” below.

2 Represents a Non-IFRS financial measure. See “Non-IFRS Financial Measures” below for more information.