PointsBet has celebrated a record net win as a group across all regions in its latest quarterly report, highlighting its result as “the importance of being on the starting line” for the launch of new sports betting markets.
Regarding the US, the region’s CEO Johnny Aitken stated during the operator’s Q2 FY23 (Q4 2022) earnings call that the increasing net win compared to the previous year is “pleasing to see.”
On top of its positive quarter, however, PointsBet has also amended its partnership with NBCUniversal in the US, extending it by a further two years to August 2027 and reducing its marketing spend in the region.
Posting its Q2 FY23 report, PointsBet declared a total group net win improvement of 34% YoY to US$72.4m (2022: $54.12m), a new record for the operator.
The operator’s sports betting vertical recorded a group net win of $61.8m off a group handle of $1.45bn, a 56% increase YoY (Q2 FY22: $928.9m), and a gross win of $106.4m, up 14% YoY (2022: $93.7m).
The group’s igaming operations reported a net win for the quarter of $10.7m, a 183% uptick YoY (2022: $3.8m).
PointsBet continues US momentum
PointsBet’s positive performance was highlighted in the US, where it reported a total net win of $28.4m, a 68% improvement YoY (2022: $16.9m).
US sports betting operations saw the operator’s net win increase by 51% YoY to $19.9m (2022: $13.2m) off a handle of $735.5m, up 75% YoY (2022: $419.6m), a gross win of $38.5m, a 32% YoY uptick (2022: $29.1m).
Aitken stated the sportsbook’s strong growth in net win was assisted by the group’s “focus on targeting, delighting and retaining super user customers through product and service excellence.”
The operator’s US igaming operations reported a net win of $8.5m, a 128% improvement YoY (2022: $3.8m) following new product offerings in Michigan and New Jersey alongside existing content.
During the quarter, PointsBet also launched its online sportsbook in Maryland, as well as in Ohio just after the measuring period closed. It is now live in 14 states for online sports betting and four states for igaming.
Both Maryland and Ohio have delivered so far for the operator, with Group CEO Sam Swanell noting that the Buckeye State delivered the highest number of first-time bettors of any previous state launch during its opening three weeks, adding “these early results highlight the importance of being on the starting line in order to improve state launch effectiveness.”
Alongside the amendment to its NBC deal, PointsBet praised the success of its NFL Lightning Bets micro market offering which accounted for 20% of all in-play betting, as well as its Soccer OddsFactory offering during the FIFA World Cup which has now expanded to cover 18 other soccer leagues around the world.
The operator expects progress to remain positive for its US sportsbook as it continues to improve its betting platform to meet the consumer popularity of parlay bets, particularly on NFL fixtures where it has reduced its live suspension times.
PointsBet’s cash active clients in the US for the quarter stood at 292,470, a 39% increase YoY. It also reduced its marketing spend YoY in the region by 17% to $24.5m.
Aitken commented: “The aforementioned growth in player value is driven by three factors fundamentally. Number one is marketing with our continued increased brand salience, combined with more efficient and targeted investment.
“Number two is product, which fundamentally improves our ability to retain and engage customers. The impact of our investments have been evident this half year in our internal net promoter scores, as well as the Eilers & Krejcik externally published product rankings, where we continue to be ranked in the top three online sports betting apps in the US.
“And number three is igaming, with our ability to target both new direct casino customers, and better engage our sports base, which is significantly helped drive up play values in live igaming markets.”
Canadian operations see improvements
PointsBet’s Canadian operations in Ontario continued to see improvements quarter-over-quarter since launching in April with a total net win for the region of C$4.7m.
The operator declared a sports betting net win of C$2m off a handle of C$75.6m and a gross win of C$3.3m, noting that the World Cup helped to generate action in both engagement and in-play activity.
PointsBet added that it continued to improve its online casino offering in Canada during the quarter, as igaming recorded a net win of C$2.7m.
Cash active clients for the period came in at 20,777, while marketing expenses stood at C$8.2m. The operator noted that it was “pleased” with how well it was performing in a highly competitive market.
During the quarter, PointsBet also opened a new headquarters in Ontario to help power its Canadian operations with a focus on product development and technology recruitment.
Amended NBC partnership
As previously mentioned, PointsBet has extended its partnership with NBC in the US by an additional two years to August 2027.
With the deal currently in year three with a marketing expense of US$50m (43% lower than the original agreement), the spend for years three to five will now be invested over the extra two years as well.
PointsBet has allocated $294m in committed marketing spending for years three to seven of the deal, with $25m having already been paid as of Dec. 31, 2022, leaving $269m remaining.
As a result, the operator expects its US marketing expense for its FY23 to be circa $90m, down from its FY22 $118m.
PointsBet portfolio of available assets with NBC will also now include Peacock, sports programming on USA Network and CNBC digital, and Comcast’s EffecTV platform.
However, the operator has also relinquished its exclusive rights for sports betting integration with NBC’s national media assets, retaining a “second look” for all assets, permitting the media conglomerate to appoint an additional sports betting partner for NBC Sports.
“NBCUniversal have been a wonderful partner to work with since the inception of this agreement,“ noted Swanell.
“PointsBet has trialed and learned a lot since going live in the US market. We are thrilled to have agreed with NBCU on mutually beneficial adjustments to our agreement that fit perfectly within our more targeted, localized strategy which is informed by those learnings.
“Put simply, we very firmly believe a dollar spent in marketing on any other platform does not go close to rivaling the terms and efficacy of the partnership we have with NBCU. We are fortunate to have access to unrivaled media properties via NBCU and they are an integral component of our overall strategy that is contributing to PointsBet’s strong US growth.”