The overall news out of PointsBet’s 2022 H2 earnings call were not positive, but the company’s outlook about North America is.
PointsBet reported revenues of nearly $120 million in the back half of 2022 but EBITDA amounted to a loss of just over $100 million for the six-month period.
In the company’s revenue report, PointsBet expected things to turn around in the first six months of 2023 and projected EBITDA losses between $52-$55 million, roughly half of this past period.
Over the back half of 2022, PointsBet accepted $1.05 billion in wagers in the US and another $68 million in Canada. The US activity outpaced Australia for PointsBet. Hold was best for the company in Australia though, coming in at 10%, compared to 6.1% in the US and just 5% in Canada.
Net revenue for the US online gaming sector amounted to $34.1 million from sports betting and $13 million from online casino. Online casino experienced strong growth, up 157% YoY, while sports betting also grew by 98%. The company also reported a marketing spend in the US of nearly $32 million. The end result was 292,470 active users in the period.
Canadian net revenue for sports betting came in at $1.7 million compared to $2.8 million in online casino net revenues. The number of active users in Ontario exceeded 20,700 players. Those players are, according to PointsBet generating higher lifetime values than expected so far.
Managing Director and Group CEO for PointsBet Sam Swanell spoke highly of the North American vertical on the company earnings report.
“I think it’s important to understand that these results show our strategy, backed by world-leading technology and a world-leading team, is building a platform for future growth and profitability. In the United States, the largest and fastest-growing online betting market in the world, we are the seventh-largest online operator in a field of over 60 licensed online operators.,” Swanell noted. “On top of that, our app, which is powered by our proprietary tech stack, is independently ranked as top three. This has not gone unnoticed. The amount of third party strategic interest shown in our company demonstrates we’ve built a very valuable business. This gives us significant optionality around how we take the business forward to maximize value for our shareholders.”
When asked about the company’s withdrawal from Massachusetts, Swanell clarified that the decision is not to remove teh state from the roadmap altogether. Rather, it is about entering the space when the company is ready.
“In recent times, we’ve spoken about the fact that our job is to prove the unit economics and the path to profitability of our North American business. And we think that the total addressable market that we have access to now being 14 states in America, plus Canada is huge. So I suppose we made the prudent decision that adding Massachusetts was probably one step too far,” Swanell explained.
He compared Massachusetts to Tennessee as a state where there is an opportunity to pursue at some point in the future but there is no rush to enter into them now on the company’s end.
Meanwhile, Ohio and Maryland were strong launches in Swanell’s eyes.
“We definitely got off to a fast start faster than we’d ever got to in any other state,” he noted. According to the first revenue report from the Ohio Casino Control Commission, PointsBet accepted $7.5 million in bets, spent $1.5 million in promotional credit, and produced $1.2 million in GGR. Those numbers represent 0.6% of the total Ohio market, putting it ninth out of the 16 operators in the state.
Since launching in Maryland in November, PointsBet has taken $8.4 million in wagers, which puts it sixth out of the seven operators in the state, ahead of only BetRivers.