PointsBet Q321
The top line
Gross win rose nearly fourfold to A$100.5m (US$78.2m) while net win rose in lockstep to A$64.9m. Net win margin rose by 20bps to 7.2%. Active clients across the business rose from 106k to 286k.
US expansion led the way with gross win rising from A$5.6m to A$45.8m. Australia gross win more than doubled to A$54.8m. US actives soared to 128k from 22.7k. Sequentially US actives doubled QoQ.
On point: The US business is now active in six states – New Jersey, Illinois, Indiana, Iowa, Colorado and Michigan – and handle bumped up significantly to A$482m from A$90.7m in the prior year period. In the year to date gross win hit $63.5m while net win stood at $24.7m. The company claimed market shares across these states at an average of 5.3%, with its best performance in Illinois where it stood at 7.5%. On the earnings call, CEO Sam Swanell said on a seriously buffered (or was that just us) earnings call that PointsBet had achieved over 8% market share in Illinois in February. Talking about the potential end of in-person registration in Illinois, PointsBet noted that its flagship sportsbook at the Hawthorne Race Course was “ideally placed”, just 13kms from downtown Chicago.
Market share and market access: The company reiterated its goal of hitting 10% market share in every US state that it enters. The company is planning to be live in 18 states by the end of 2022. In late March, it agreed market access deals for Pennsylvania and Mississippi with Penn National.
Customer acquisition costs analysis: Looking at the results, analysts at Deutsche Bank suggested the marketing spend (US$33.3m) increased the client base by circa 127,500, implying a CAC of around US$594. This compares with US$625 and US$644 in the prior two quarters. That is only one layer of the customer acquisition expense, the DB team says, and “the true cost is likely to be higher.”
“We believe that operators with large legacy databases will have an advantage in that they are able to blend the costs of acquiring new clients with old. We think the PBH report and the heavy customer acquisition spend speaks to the value of having the legacy daily fantasy databases.” A further complication was that it is far too early to make any assumptions about lifetime values. “We believe, at this point, long-term values are merely a guess.”
Taking tech to the US: A new iGaming platform will be launched in Michigan imminently to be followed by New Jersey. Talking about the recent $43m Banach Technology acquisition, CFO Andrew Mellor said it would accelerate PointsBet’s in-play push in the US. He said integration between the teams had already begun. The company predicted that in three years’ time in-play would be worth 75% of total US handle. It based this on current estimates of the European in-play market. Swanell said that it was excited to be finally launching iGaming, as it had up to now been operating with “one hand tied behind our backs” in those states where gaming is legal.
Australia: Turnover rose from A$128.4m to A$423.2m. Net win margin rose by 40bps to 9%. Active clients rose to 158k. This is against the generally positive backdrop in the US. Yesterday, Flutter said Australian revenues at its market-leading Sportsbet business rose 59%.
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