It’s another year of losses for PointsBet. The sports betting group has focused on increasing marketing and sales, and that has resulted in losses for the second year in a row.
The Melbourne-based wagering giant spent $240 million on marketing and sales last year. Of that, $162 million went towards the group’s US expansion. PointsBet is available in 11 US states and operates in Canada too. It is the seventh-largest wagering provider in North America and has a 3.7% share in the $13 billion North American market.
Expecting to Capitalize on US Investment
PointsBet’s chief executive, Sam Swanell, said that American sports were perfect for betting, as they came with more breaks in play and were followed by “a sizeable population.” So, it was logical for the group to look at the $13 billion US market as “a once-in-a-lifetime opportunity.”
Swanell pointed out that the $13 billion market included only the existing 11 states where sports betting was legal right now. He predicts a real boom once California and Texas, with their “big populations,” legalize betting.
PointsBet’s CEO noted that it was pretty hard to get US betting licenses, but they managed to get them by entering into “the right partnerships.” He admitted that they had to invest heavily to get to where they are, but that the group had “an opportunity to capitalize” on their investments now.
Swanell was clear in his intention to keep entering new markets but said PointsBet won’t increase marketing spending this year. He defended the group’s strategy of spending big on marketing and sales by saying they had to go from “the bookmaker no one’s heard about” to one of the biggest betting operators in North America.
PointsBet’s losses in 2022 were $267.7 million, up 47% compared to the year before. Revenue increased to $296.5 million, a 52% year-on-year rise. However, EBIDTA, something investors take great interest in, was down 56%, resulting in a $243.6 million loss.
Swanell doesn’t seem all that concerned though. PointsBet’s chief said the betting operator customized its product to meet the needs of American punters and was expecting to capitalize on its in-play or live betting offer, in particular.
Focusing Racing in Australia, Extended Partnerships, and Rebuffed Takeover Offers
In-play betting is still not legal in Australia, so PointsBet can’t count on live wagers to improve its Australian market share. However, it can focus on something that Aussie bettors love – racing.
The racing season in Australia will soon start, and PointsBet is going all-in. Swanell said that punters can expect the group to “do some things around racing,” as that was where PointsBet gets most of its Australian revenue but was careful not to give too much away.
PointsBet refocusing on Australian racing is not the only thing that the Melbourne-based operator has had to think about. In June, PointsBet’s Australian division was the subject of a $220 million takeover offer. Influential betting personality Matthew Tripp and Rupert Murdoch’s News Corp tabled the bid, but the PointsBet board declined the offer.
PointsBet, the only official partner of the NBA in Australia, also extended its partnership with Shaquille O’Neal. The former Orlando Magic and LA Lakers star was first recruited as a PointsBet brand ambassador in 2021.
Lastly, PointsBet also announced that the group will appoint a new chief strategy officer in September. Edward Hartman, a sports media executive, will fill the role hoping he can reverse the downward trend and increase how much PointsBet shares are going for. The former Senior Vice President of Digital Partnerships & Wagering at FOX Sports will have a lot to do, though, as PointsBet’s shares have halved in value in the past eight months.