The ASX-listed online casino group PointsBet revealed its quarterly update for the 2022 fiscal year recently. The Australian market darling gave an overview of its trading performance for the period.
Key points from the update showed:
- Overall trade grew to AU$979.9 million, which was a 42% increase from the same period of 2021 (AU$691.9 million).
- The group’s Australian trading business grew 20% and its US business increased 112%.
- Gross win margins increased 2%.
- There was a revenue increase of AU$117.7 million. This indicated a 62% increase from last year. Of this, the Australia market generated $87.9 million. The US market generated a large increase at AU$29.2 million –197% growth compared to last year.
- US net win grew a whopping 307% (from AU$3.1 million to AU$12.5 million). Australian net win was recorded at 56%. The overall net win reported by PointsBet was 76% compared to last year’s numbers.
To summarize the performance of PointsBet’s US and Australian markets in the latest quarterly update:
PointsBet has recorded a 62% global increase in revenue in 2021. With Australia being their most active theater, PointsBet netted AU$87.9m more in this market than last year. PointsBet’s US side of the house broke a record of its own by increasing revenue by 197% in the same timeframe.
The AU$29.2m increase in the US markets is a feat of its own considering the impact of Woo Casino and the rest of the new brands that are contesting this space.
The Growth of the US Online Casino and Gambling Market
The US market is at an all-time high and is expected to grow annually at a rate of over 17%.
The global pandemic had a major impact on the gambling industry at an international level, with brick-and-mortar facilities such as casinos, lottery outlets, bingo halls, horse racing and poker rooms badly affected by lockdowns and public meeting bans.
As a result, the international market saw a massive migration from offline to online gambling entertainment platforms.
In the US, as more individual states introduce gambling regulations, online gambling is expected to increase significantly. More players will turn to online casino games, which will be complemented by other online gambling activities such as sports betting, lotteries, poker and more.
A recent report by Mordor Intelligence showed that the US online gambling market was valued at US$2,179.29 million in 2020, and is expected to register a CAGR of 17.34% up until at least 2026.
Another report by Grand View Research, says that the online gambling market is expected to reach $127.3 billion by 2027.
The Sydney Morning Herald predicts that the legal US sports betting market will be worth AU$71 billion by 2033.
While COVID19 obviously had a great impact on the way the US market direction took, there were other factors also mentioned in these reports.
- The growing popularity of betting across the globe.
- The ease of sports betting using a computer or smartphone.
- The proliferation of sports betting and online casino ads across the globe.
- Changing legislation.
PointsBet Up Against Fierce Competition in the US
But with all this, it is hard to ignore the fact that PointsBet is up against very tough competition in the US – and the fight will only get bloodier.
PointsBet operates in New Jersey, Illinois, Michigan, Indiana, Colorado, Iowa and West Virginia. By the end of next year, it hopes to be established in 11 more states.
But while the Melbourne-based group continues to race to establish itself in the US market, it finds itself is up against long-established icons such as the fantasy league operators and sports betting bookies, FanDuels and DraftKings.
According to Sam Swanell, the chief executive of PointsBet in an analyst call to the Sydney Morning Herald: “We were never naive as to the advantage that the bigger brands would have and the databases would have in the early days of the market.”
“But… we firmly believe that a product-led strategy and in particular a strategy that means you have the market-leading in-play product will earn you that 10 per cent.”
Swanell said that the group’s US competitors spend billions on advertising their brands, but PointsBet was reluctant to enter what he terms an “arms race”.
“We’ll keep adhering to our strategy, but not ignoring obviously the competitive pressures that are out there. If we have to adjust promotions… obviously that’s part of what we do on an ongoing basis,” he added.
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