At least one NJ sportsbook saw some benefit from the absence of major sports in Q2 as PointsBet ramped up its New Jersey sports betting market share to 8.7% of all online bets.
That was up significantly from the 5.7% taken by the firm in the first three months of the year.
How did PointsBet increase NJ sports betting share?
The company pointed to its “non traditional” markets that replaced core sports, with a focus on competitions like darts, table tennis and eNASCAR.
“We made the most of those second-tier sports,” said PointsBet CEO Sam Swanell.
He added that some of the competitors also shifted their focus to online casino during the shutdown, leaving a little less competition.
In total, PointsBet took $31 million in bets in Q2. That was down around 13% year-on-year, but the market share figures suggested PointsBet was hurt less than other operators.
“Relative to our peers, we were able to grow within that smaller market,” Swannell said.
However, he warned that market share might slip back to around 6% as other operators started ramping up their spending again. The operator continued to run on tight margins, with a net win margin of just 2.6% in New Jersey. That was good for $0.8 million in net win for the quarter.
New focus away from the Garden State
Away from NJ, PointsBet took $2.1 million in handle from Indiana and $0.6 million from Iowa.
And looking ahead, Swannell suggested that NJ might be deprioritized, as PointsBet looked to build a 10% market share in other states.
The CEO singled out Illinois sports betting as a major opportunity, where PointsBet plans to launch online and retail by the end of August. Indeed, the recent end of remote registration could play into the operator’s hands, with its partner, Hawthorne Race Course, situated just eight miles from downtown Chicago.
That compares to around 300 miles for the DraftKings sportsbook at Casino Queen for example.
PointsBet will also fit-out 3 branded off-track betting establishments throughout the Chicago Metropolitan area, where customers can bet and sign up for the online product.
Offering an alternative to the DFS giants
Swannell bluntly offered market strategy for the Australian upstart.
“Indiana and Illinois are really the target states for us going forward,” Swannell said. “And we’ll be looking to execute a more well-rounded brand strategy. We want to introduce to the market that there’s alternatives to FanDuel and DraftKings, and that PointsBet is here.
“That’s not something we’ve been able to do on a large-scale in New Jersey, and that’s one of the reasons we are confident in our ability to hit our target market share in those states.”
Swannell said the operator been limiting its spend in NJ to date for two reasons:
- It didn’t have an online casino product live
- A lot of the media dollars would be “wasted into New York and Pennsylvania,” where PointsBet is not live.
The exec was also asked by analysts how PointsBet could compete with the likes of FanDuel and DraftKings when it had less than $70 million on the balance sheet and those two giants had just raised a combined $2 billion.
“We’re certainly not naive to the equations around marketing investments,” Swannell replied. “And at this stage, we’re aiming for a 10% market share in the states in which we’re going live into. The pace at which those states legalize and our aspirations of business will dictate how much cash we need.”
Shares in PointsBet fell by around 7.5% on the Australian Stock Exchange following the trading update.