PointsBet is reporting its Ontario online gambling platform is producing some positive numbers. So much so, the Australian-based operator is hoping to be profitable in Ontario next year.
Speaking on an earnings call this week to discuss the quarter that ended Sept. 30, PointsBet Holdings Limited CEO Sam Swanell said:
“We’re clearly on a path to profitability [in Ontario]. … This year, FY ’24, we increased revenue and we reduced the losses. In FY ’25, we want Canada profitable.”
Why PointsBet is focusing on Canada
In May, PointsBet made a deal to sell its US operations to Fanatics. But PointsBet decided to hold on to its Ontario operation for three main reasons:
- Ontario online casinos are fully legal.
- The cost to entry to Ontario’s market is favourable.
- It was able to establish brand awareness in one of the world’s most competitive gambling markets, currently home to 47 operators running close to 70 separate gambling sites.
“When we talked about the US as a whole, we never got that definitive about the path to profitability,” Swanell said on the earnings call. “And that’s facilitated by the fact that, one, the [Ontario] operating environment is more favourable from a gross profit margin and a path to profitability, but it’s also on the back of that we’re very pleased with the progress that we’re making.
“The Canadian business provides shareholders continued exposure to the fast-growing North American market through a jurisdiction that is more attractive than most US states.”
Ontario online casino driving PointsBet’s growth
PointsBet Casino Ontario had a net win of $3 million for the quarter that ended Sept. 30, 2023.
Net win is the dollar amount received from clients who placed losing bets less the dollar amount paid to clients who placed winning bets, less client promotional costs (the costs incurred to acquire and retain clients through bonus bets, money back offers, early payouts and enhanced pricing initiatives).
PointsBet’s Ontario net win was up 136% over the same quarter in 2022.
“Across the full [Ontario] offering, we delivered total net win of $5.4 million, up 212% versus the PCP (previous corresponding period),” Swanell said.
“This strong net win growth was achieved with marketing expense reducing by 7% on the PCP, and we also delivered higher customer acquisition in the quarter, driven by an improved conversion funnel.
“We’ve delivered strong growth and momentum across both our sports betting and online casino businesses versus the PCP.”
For the quarter that ended Sept. 30, 2023, PointsBet Ontario numbers show:
- Its group net win was up 212% compared to the same quarter in 2022.
- It had some 32,000 cash-active clients.
- Sports betting handle of $44.2 million, up 111% compared to the same quarter in 2022.
- Sports betting net win of $2.3 million was up 440% from the same period in 2022.
Growth in PointsBet Ontario Sportsbook driven by in-play betting
Swanell said PointsBet Ontario saw “strong engagement” in baseball, tennis and soccer during the quarter’s three months. The return of the NFL for the final month of the quarter was also instrumental.
Live betting represented 68% of the handle for PointsBet Sportsbook Ontario. That’s up 59% from Q1 last year.
“This year-on-year improvement was driven by both improved trading margin on a higher mix of parlays and significantly improved efficiency in our customer promotional spend,” Swanell said.
“As we look ahead to Q2, we are excited about our plan to continue to deliver growth. The NBA and NHL, two of the biggest sports returned with regular season action. We continue to execute against an exciting product road map that will continue to expand our sports betting capabilities.
“And at the same time, we are also actively working to significantly enhance our casino product offering in order to improve the overall experience for customers in terms of games offerings, bonusing options, which are both key elements to growing market share in Ontario.”
Spending less on marketing in Ontario viewed as ‘efficiencies’
Asked on the earnings call about spending 7% less on marketing in Ontario, Swanell said it was similar to the company’s strategy in Australia.
“We spent some money on some things last year that we’ve identified, didn’t really generate too much in terms of an ROI (return on investment),” Swanell said.
“Clearly, we are focused on [being] a growth company and we want to get to EBITDA positivity, so that is part of our thinking. But no, you shouldn’t read into the 7% reduction. We just see that as efficiencies. And as we said, we actually acquired more clients this quarter than PCP despite spending 7% less.”