PointsBet Cost of US Entry Revealed
Revenue numbers for US regulated PointsBet have been stellar across the board as the wagering firm enters a new market by way of Iowa.
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The relative newcomer to the industry, with its roots in Australia, reported revenue ahead by 173% to AUD$25.6m. Strong top line growth was driven, said the firm, by a 254% increase in registered clients to 123,180, a 244% lift in betting turnover to AUD$567m, and a 174% jump in its net win to AUD$28.2m.
The cost of entry presents a less rosy picture, however.
From our friends at SBC:
A sharp increase in operating expenses, partly attributed to the expansion of its new US operation, led to an EBITDA loss of AUD$32.7m on a normalized basis and an operating loss of AUD$37.2m on a statutory basis. Ultimately, the firm reported a normalized loss after tax of AUD$34.4m and a statutory loss after tax of AUD$41.9m.
The company’s US gross win in the reporting period was US$1.54m whilst its client promotional costs for the period were US$2.06m, thus resulting in negative net revenue of US$0.515m for the period.
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CEO Sam Swanell stated in his report to investors: “PointsBet is on the starting line of the nascent US sports betting opportunity. It is estimated that if all 50 States legalize online sports betting, the market revenue opportunity will be US$17.3bn per annum. Pending favorable legislation, PointsBet already has market access agreements for 10 US states with a combined population of approximately 81 million, with those states representing an estimated sports betting revenue market of US$4.6bn per annum.
“The team is laser focused on the clear opportunity ahead and is structured in such a way to deliver maximum economies of scale as we enter new markets. Through our in-house technology platform and one team global structure, PointsBet will benefit from operating margins that deliver a competitive advantage for the long term.”
The company's primary market in the US to date has been New Jersey, a state where FanDuel and Draftkings occupy nearly three quarters of the overall sports betting market.
This month, PointsBet launched its new retail sportsbook in Burlington, Iowa at the Catfish Bend Casino.
The partnership will include the launch of both premium retail and mobile sportsbook operations in Iowa, following proper licensing afforded by the Iowa Racing and Gaming Commission. PointsBet and Catfish Bend Casino will work in tandem to build out a multi-faceted sports entertainment venue centrally located on the Catfish Bend property, including a sports bar, multi-screen video and odds display wall, and additional casino gaming options. The unique non-smoking venue will also welcome sports bettors and fans alike to participate in unparalleled viewing parties during major sporting events.
“PointsBet is thrilled to announce this partnership, enabling us to create a first-class sportsbook for Iowa’s sports bettors at one of the best casino resorts in the Midwest,” commented Johnny Aitken, PointsBet’s U.S. CEO. “Catfish Bend Casino’s executives - Gary Hoyer and Rob Higgins - are two of the most progressive and forward-thinking operators in the industry. We knew they were the perfect match for PointsBet’s long-term vision of gaming in the U.S. from day one.”
PointsBet will bring its best-in-market proprietary technology, modernized and premium brand mentality, expert trading practices, and proven growth marketing strategies to Iowa’s emerging sports betting market.
“We couldn’t imagine a better sportsbook to bring to Catfish Bend Casino and the state of Iowa,” said Gary Hoyer, CEO of Great River Entertainment, the parent company of Catfish Bend Casino. “The potential legalization of sports betting in Iowa opens an exciting new opportunity for recreational and avid players, and PointsBet’s unmatched dedication to bettors makes them the ideal partner for our brand and go-to-market plan.”
PointsBet hopes to launch its mobile platform in the state soon.
- Aaron Goldstein, Gambling911.com
