PointsBet VP Talks Online Casinos Positive Impact On Sports Betting

Written By Robyn McNeil on November 9, 2022 - Last Updated on May 8, 2024
pointsbet's vp of igaming revenue on importance of online casinos to sports betting

Online gambling in Canada, or anywhere else, is a funny beast.

With all the hype around online sports betting, it would be easy to think that’s where all the action is. But the truth is, sports betting brings the sparkle to online play. The real workhorses are online casinos — at least when it comes to money.

“Online Casino is in many ways the behind-the-scenes gasoline for sports betting operators,” said Nic Sulsky, chief commercial officer at PointsBet Canada.

“Whether it’s creating the ability to reinvest in marketing & advertising, or product & tech, or any of the other essential verticals that constitute a successful iGaming operator, online casino is a massive piece of the puzzle that makes a lot of things possible.”

To dig deeper into the importance Canada’s online casinos play in the success of online sports betting in Canada, we spoke to Aaron O’Sullivan, vice president of igaming revenue at PointsBet.

O’Sullivan also gave us a view into what’s to come casino-wise at PointsBet’s Ontario Sportsbook.

Casino a constant for PointsBet’s O’Sullivan

aaron osullivan headshot pointsbet vp talks importance of online casino
Aaron O’Sullivan, PointsBet’s VP of iGaming Revenue

For close to 15 years, Aaron O’Sullivan’s work has centred around casinos. While the job has changed — he’s done marketing, operations, product, brick-and-mortar and even B2B — the vertical mostly remained constant. (He did dabble in sports betting and bingo, but that was more novelty than the norm).

Before joining PointsBet as a global VP, O’Sullivan worked with companies like Bet365, 32 Red, and Rank Group, among others. At PointsBet, he sits on the US executive and Canadian management teams as part of his VP role.

“We make sure that casino has a strategic role within both businesses,” said O’Sullivan, over video from his UK base.

Because Canada and the US are the only PointsBet markets with online casinos, he spends most of his time focused across the Atlantic. But both countries offering online casinos doesn’t mean the jurisdictions are the same. Canada, and specifically Ontario, stands out.

Canadian online casinos players understand “good”

“Canada is s a much more mature market,” O’Sullivan said.

“The Canadian market has had access to online casinos, just not from a white hat, legislated point of view. So, the grey market of those [customers] that are super interested in casinos have been playing for years. And [they] know what good looks like.”

Surprisingly, said O’Sullivan, for Ontario online casino players, the switch to regulation actually degraded online casino options. At least temporarily, anyway.

Pre-regulation, Ontario players could visit .com casinos in the grey market offering  “all games, all kinds of functionalities, all kinds of promotions,” he said. But Ontario’s new regulation fettered that access. Suddenly many formerly viable online casinos were no longer an option.

“It didn’t create the sort of level playing field that we hoped it would because, obviously, grey market operators could have continued to strike bets. And [some] have only just stopped.”

What that means for operators like PointsBet Canada is delivering products and incentives to draw sportsbook customers to its online casino.

Once there, they do their best to keep them. According to O’Sullivan, live casino games are a significant draw for sports bettors used to putting money on events they can watch in real-time.

“Live casino is hugely important for sportsbook customers,” O’Sullivan said.

“These are people that may be cynical around RNGs [random number generators]… some people only believe what they see with their eyes rather than what’s happening with the science. But, live casino circumvents that. You can see the dealer, you can see the table. You can see the results unfold in front of your eyes.”

Online casinos less “sexy,” but the real moneymaker

“I should defend casino, but I don’t think I can,” said O’Sullivan. “It’s not sexy at all.”

However, echoing Sulsky, he deemed online casinos the “monetary powerhouse that supports nearly every [gambling] business.”

Assertions aside, sports betting’s financial dependence on online casinos is a surprise for many outside the industry. And it’s not hard to understand why.

With online sports betting, we get big names and big egos on teams playing for dominance, rings, medals and cups. Then we see those same names selling at us in ads served during every game, at events and across social media.

Plus, watching sports is social. And fans love representing their favourite teams by throwing on a jersey or tossing cash on a bet. Promoting an activity shared among friends has to be easier than selling solitary online casino play.

“The sort of pattern we’re seeing in Canada,” added O’Sullivan, of the often demonstrated financial dominance of online casinos over sports betting.

“It’s a global trend. I think it’s high [the difference], but it’s akin to what we’re seeing in, say, Michigan and New Jersey. So no surprise there.”

Think of it like cake. Online sports betting is the icing, the siren’s song. It’s the enticement beckoning sports fans to risk a few dollars on the moneyline or player props.

Online casino, however, is the cake proper. It might not be the initial draw, but without it, the icing would have nothing holding it up.

And the reality is, without online casinos providing a solid base, it’s unlikely many sportsbooks (even the majors) would even exist. Certainly not as we know them today.

 Online casinos dominance seen in PointsBet’s early Ontario results

We weren’t the first and won’t be the last, but we’ve previously covered how online casino revenues dwarf operators’ sports betting rake.

But, possibly the best and most timely example is PointsBet Canada’s recent Ontario financials.

In its first three months in operation (PointsBet’s Q4 of FY22), PointsBet’s sportsbook collected nearly C$14m in betting handle. But, after payouts and expenses, modest sports betting revenues of just over C$600k became a C$430k deficit. PointsBet’s Online casino, on the other hand, delivered a solid C$610k result.

While the numbers might still feel low, insiders have attributed that to multiple factors. A slow sports season and a new market still served by grey market operators were undoubtedly part of the consideration.

Ontario’s first-quarter revenues low but show potential

“Results for Ontario were underwhelming,” said O’Sullivan of the first-quarter numbers shared by iGaming Ontario at August’s end. “I think that’s sort of universally accepted.”

That said, Ontario’s second-quarter results showed improvement overall. And PBC’s revenue for the same timeframe (PointsBet’s Q1 FY23) reflected a similar jump.

This time, the overall handle came slightly over C$18m. In Ontario’s Q2, the sportsbook held onto nearly C$350k, while its Ontario online casino earned more than C$1m. That brings total revenues to almost C$1.5m.

PointsBet Canada's first two Ontario quarters show growth and dominance of online casino
PBC’s Ontario performance, Apr. – Sept. 2022

Of course, there’s still room for improvement for PointsBet Canadian operators and Ontario. But these early results indicate an upward slope.

“Certainly, I think a lot of revenue may still be [out there],” said O’Sullivan.

“And this speaks well of Q3 results. Some of that revenue that grey operators we’re still holding onto will either become white (and therefore reported), and we’ll see another [revenue] jump. Or they remain black, and the AGCO will have to drop the axe on those operators still trying to leverage the market. So there are challenges there for us. How much will stay black? How much is really accessible?”

Evolution ahead for PointsBet Canada’s online casino

Indeed, there’s still uncertainty about what Ontario’s online gambling market will look like when the dust finally settles.

In the meantime, PBC will be tweaking its offering to serve its Ontario online casino players better. And, we can expect more details about PBC’s plans to boost its online casino offering by early January, said O’Sullivan.

“We believe in the Canadian market, and we believe in the Canadian audience, and we want to make sure PointsBet earns its rightful share.”

More content, inducements and design improvements to come

In the short term, players will see new content from popular gaming suppliers. There’s also an effort to extend free spins to more game titles and redesign PointsBet’s online casino lobby.

“We believe the lobby is critical,” said O’Sullivan.

“The front-end experience for customers is really important, and a lot of our competitors (and ourselves) look very similar with grids of game titles, and you pick one and hope for the best. We want to introduce more sorting and filtering so people can find the content they actually like.”

There are also plans to harness that same science to power PBC’s recommendation engine for a more Netflix-like experience.

“If people are genuinely finding games they like rather than games that work for us financially, it is not only ethical but actually better in the long run. A happier customer is a customer that plays longer… and the more they choose, the more [they] play, the more accurate the recommendation gets.”

Sullivan also hinted that we’d see the Trailer Park Boys popping up in novel ways over the following months. Which only makes sense, especially if you’ve watched season 10’s casino storyline.

“We do want to lean into it,” O’Sullivan said, “there is a natural synergy.”

Exactly how the Boys will show up is still being worked out, but ideas include traditional ads, comedic content, and possibly even live-streaming. That’s another potentially solid idea, given the recent gambling-related changes at Twitch.

“Betting behind streams powered by operators and enjoyed by users interacting with ambassadors, people they actually like and respect or find funny is a great way of closing that gap.”

Photo by Shutterstock
Robyn McNeil Avatar
Written by
Robyn McNeil

Robyn McNeil is a Nova Scotia-based writer and editor. She lives in Halifax in an empty nest with a mischievous cat and a penchant for good stories, strong tea, cheeseburgers, yoga, graveyards, hammocks, gardening, games, herb, and hoppy beer.

View all posts by Robyn McNeil
Privacy Policy