A couple of years ago PointsBet went all-in on penetrating the US betting market. However, with US operations now in the hands of Fanatics Gaming, PointsBet has shifted its focus to the Australian and Canadian markets.
The betting operator provided shareholders with an update on the status of the company after giving the green light to Fanatics Gaming to use the PointsBet platforms in the US. PointsBet will be able to continue to work on its “OddsFactory” technology, which fuels the bookmaker’s in-play betting systems, same-game multis and cashout functions for Australian, Canadian, and US bettors.
PointsBet is Rare and Valuable Says Company CEO
PointsBet CEO Sam Swanell reported to shareholders that companies with the experience and expertise of PointsBet were “rare and valuable” in the industry, especially as the Australian-based betting operator had the “technical capabilities and ability to work in highly regulated markets.”
Swanell pointed out that the betting operator could leverage what it built over the years and provide investors and shareholders with value now and, even more importantly, in the future.
PointsBet hopes for a profitable 2024 in Australia and Canada, particularly as it has grown substantially in both markets in the past five years. What was a US$26-million business in 2019 turned into a company with an expected net revenue of up to US$250 million in FY 2024.
The Australian bookmaker reported a return of US$230 million in FY 2023 (July 1, 2022 – June 30, 2023), a 7.6% year-on-year increase. Gross profit was also up, as it increased by 5% to US$105.7 million. In Australia, the company’s net win increased to US$52.8 million, an 11% increase compared to the same period last year.
PointsBet’s Prospects in Australia and Canada Are Much Better
PointsBet sold its US business to Fanatics for US$225 million, with the betting operator receiving $175 million of those funds already, while the rest of the proceeds from the sale will be completed by March 2024. The change in ownership has already been approved in 8 US states, with the most recent one being Virginia.
PointsBet left the US market because it no longer found it profitable to fight off the challenge of rivals, which required substantial investments in marketing product promotions, while regulatory expenses and steep tax rates didn’t help either.
Swanell thought the betting operator’s prospects in Australia and Canada were much better, with the market structure of the Ontario market being particularly attractive for sportsbooks.
Unlike US states, neither Canada nor Australia requires revenue share agreements to be signed, while the nominal license fees and Ontario’s tax rate of 18% of gross gaming revenue were also reasonable.
Swanell said that would mean “lower capital requirements and higher operating margins” than most US markets where PointsBet used to operate and would result in better prospects “for attractive future economics.”
