PointsBet Earnings Call Highlights Influencer Deals, Market Share Target

Posted on May 3, 2021
Written By on May 3, 2021

Marketing was a continued focal point for PointsBet in fiscal 2021 third quarter.

PointsBet executives discussed the company’s third quarter on a conference call Thursday evening. Along with its marketing efforts, Managing Director and CEO Sam Swanell also detailed US sports betting expansion expectations and the US iGaming opportunity.

The Australia-based company reported a global handle of $704.2 million, with a net win of $50.5 million. Those are year-over-year increases of 236% and 246%, respectively. Net win percentage stayed relatively consistent at approximately 7%.

The quarter ended with a loss of $21.3 million. The company has a cash balance of $255.1 million with no outstanding debt.

Highlighting PointsBet marketing

Swanell said the company is excited about its Australian brand ambassador deal with NBA Hall of Famer Shaquille O’Neal and global ambassador deal with golfer and influencer Paige Spiranac.

The presentation cited a US quarterly marketing expense of $33.3 million. The company’s Australian marketing expense was $10.5 million.

Swanell also touched on the company’s NBC partnership. The NBC Sports Predictor app helped generate more than 325,000 leads.

CPA below $500 per new user

Swanell was also pleased with the cost per acquisition per new user dropping below $500. He said without the big daily fantasy sports and casino databases of some competitors, that is a reasonable number.

“We’ve been talking for a long time that’s a number we’re comfortable with,” Swanell said. “Given our brand is in the early stages of grown and recognition, it speaks to our excellence. There’s a lot of money being spent and our ability to keep our shape and maintain discipline while trending toward 10% [market share] aim is great.”

By comparison, one analyst believes US entries like FanDuel Sportsbook, DraftKings Sportsbook, and Barstool Sportsbook will trend closer to $200 on CPAs because of those built-in marketing database.

Big year-over-year US growth for PointsBet

In the US, PointsBet took $375 million in wagers, up 431% year-over-year.

The company secured a net win in the US of $20.8 million, a 716% year-over-year increase.

Active US users were up 461% year-over-year to 127,470. That is a jump of 87% since December 31, 2020.

State of PointsBet states

Now live in six states, the investor presentation highlighted the company’s market share in two states:

Those two states made up 40% of its global handle in the third quarter. Australia made up 47%.

State-by-state third quarter PointsBet handle:

  • New Jersey: $155.3 million
  • Illinois: $128.4 million
  • Indiana: $34.2 million
  • Colorado: $24.1 million
  • Michigan: $18.1 million
  • Iowa: $14.8 million

Also in the quarter, it secured access to Mississippi and Pennsylvania through an expanded deal with Penn National Gaming. It now has market access in 16 states, including the untethered mobile markets of Tennessee and Wyoming.

The company aims to be live in 18 states by the end of 2022 calendar year. Swanell also expects to be live in Canada.

iGaming presents a big opportunity

PointsBet executives expect big things from iGaming, with Michigan expected to be the first state to launch soon.

New Jersey will come soon after.

Bank of America projects a US and Canadian iGaming opportunity of $5.9 billion. Morgan Stanley places the opportunity at $5.1 billion.

Significant acquisition for PB

On March 16, PointsBet announced its $43 million acquisition of Banach Technology.

The move likely helps bolster its in-play betting potential. Banach’s executive team, largely former Flutter Entertainment employees, joined PointsBet.

The company expects the US sports betting in-play market will reach 75% of bets within three years. It is approximately 20% according to some estimates.

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Pat Evans

Pat Evans is a Las Vegas-based reporter covering sports business. Evans previously worked at Front Office Sports and the Grand Rapids Business Journal. He has authored two books: Grand Rapids Beer and Nevada Beer.

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