Australian bookmaker PointsBet, parent firm of PointsBet USA, has published its full year results for the period ended June 30, 2019, showing revenue ahead by 173% to AUD$25.6m. Strong top line growth was driven, said the firm, by a 254% increase in registered clients to 123,180, a 244% lift in betting turnover to AUD$567m, and a 174% jump in its net win to AUD$28.2m.

However, a sharp increase in operating expenses, partly attributed to the expansion of its new US operation, led to an EBITDA loss of AUD$32.7m on a normalized basis and an operating loss of AUD$37.2m on a statutory basis. Ultimately, the firm reported a normalized loss after tax of AUD$34.4m and a statutory loss after tax of AUD$41.9m.

The company’s US gross win in the reporting period was US$1.54m whilst its client promotional costs for the period were US$2.06m, thus resulting in negative net revenue of US$0.515m for the period.

CEO Sam Swanell stated in his report to investors: “PointsBet is on the starting line of the nascent US sports betting opportunity. It is estimated that if all 50 States legalize online sports betting, the market revenue opportunity will be US$17.3bn per annum. Pending favorable legislation, PointsBet already has market access agreements for 10 US states with a combined population of approximately 81 million, with those states representing an estimated sports betting revenue market of US$4.6bn per annum.

“The team is laser focused on the clear opportunity ahead and is structured in such a way to deliver maximum economies of scale as we enter new markets. Through our in-house technology platform and one team global structure, PointsBet will benefit from operating margins that deliver a competitive advantage for the long term.”

Turning to the US numbers, the firm noted that significant growth period for the company’s operations, as it established its presence in the US market, resulted in heightened costs associated with marketing, staffing and administration. This led to the US segment recording an EBITDA loss of AUD$20m, in line with management expectations. 

It added that it is acutely aware that the state-by-state legalization of the US sports betting market is only going to happen once and thus is focused on having the best team, technology and product on the starting line.

Chairman Brett Paton, updating investors, remained positive on the outlook saying: “There is significant market opportunity in the United States as a result of the Professional and Amateur Sports Protection Act being overturned by the Supreme Court in May 2018, and PointsBet has already taken significant steps towards capitalising on this opportunity.”

On the firm’s partnership with Penn National Gaming, he added: “Shareholders should be encouraged that Penn National Gaming sought to take an equity stake in the form of shares and a potential future equity stake in options in the company as part of the transaction. Upon exercise of the options, should that occur, not only will the company’s cash reserves be strengthened but both organizations will be further aligned to achieving growth and success in the critical United States market.”