Australian sports betting operator PointsBet, parent company of PointsBet USA, has published its financials for Q4 2020, showing turnover ahead by 57.9% at $349.4m compared with the corresponding period in 2019.
Growth was driven primarily by its Australia business (+80.5% to $302.9m), which offset a 12.9% decline in US turnover to $46.5m. Turnover for the year was recorded as nearly $1.2bn, more than double the tally in 2019. Australia contributed $830.5m to that total, with the remaining $321.1m coming from PointsBet’s US business.
Net win margin for the period was 7.1%, leading to a net win of $82.1m for the year. The figure marked a 190.9% increase on 2019’s net win. At the year end, the firm reported having $135.4m of corporate cash and no borrowings.
Whilst the US business has been impacted by the suspension of US sporting leagues, PointsBet US kept clients engaged on lower tier sports, achieving a quarterly net win performance of $1.2m, which resulted in a year-to-date net win of $7m.
The firm told investors: “The suspension of the key global sports since 12 March had an impact on client acquisition and client activity overall in both the US and Australia. With the NRL and AFL seasons re-launching in the months of May and June respectively, PointsBet has seen client acquisition activity normalize towards pre-COVID expectations.
“In the US, due to the lack of premium sporting content for clients to bet on, and the intentional reduction of marketing spend in Q4, the company expected to experience a fall in activity and client acquisition.”
PointsBet noted that for the 12 months to 30 June 2020, the group had 111,361 active clients, being those clients who have placed a bet during that 12-month period. “Active clients have increased by 9,206 (being 9%) in H2 FY20 compared to an increase of 34,145 (being 74%) in H2 FY19, and this is a direct result of the suspension of sports in Q3 and Q4 and the reduced marketing spend in the US,” it confirmed.
As a result of key US sporting leagues being postponed for the majority of Q4 FY2020, PointsBet US recorded a Net Win of $1.2m at a net win margin of 2.5%. This resulted in a year-to-date net win of $7m for the US business.
During this quarter, the firm executed a strategy of client engagement and activation and, as previously communicated, the US marketing spend was reduced significantly from pre-COVID expectations.
It added: “Following the suspension of the major sports leagues, the US market pleasingly saw a number of new sports and competitions approved for wagering by US regulators, some of which were driven by submissions from PointsBet, including darts, eNASCAR iRacing, Belarusian ice hockey, and various global soccer, basketball, tennis and table tennis competitions.
Table Tennis proved most popular, with over 100 events daily being able to be bet on pre-match and in-play and as a result, table tennis represented the highest handle per sport in April and May. A number of Central American Soccer competitions were also approved and saw strong activity.”
As a result of this continued client engagement and despite the impacts of COVID-19, the company told investors that it is well placed to execute on the restart of the major sporting leagues across the US.
Looking further ahead, the firm advised that as major US sports return it will resume its targeted US marketing strategy and, consequently, anticipates a return to negative quarterly net operating cash flows in the coming quarters.