With its U.S. presence in the rearview mirror, PointsBet Holdings Limited is focused on using its technology to fuel its future.
The Australian-based legal sports betting operator addressed shareholders Tuesday to update the status of the company since it sold its U.S. assets to Fanatics Gaming in June.
Fanatics Sportsbook has been given a perpetual license to use PointsBet platforms. PointsBet can also continue to use and expand the “OddsFactory” technology that powers live-play wagering, same-game parlays, and cash-out options in the U.S., Canada, and Australia.
“It’s also important to recognize that sports betting and iGaming is a fast-growing global market, that companies like PointsBet with the experience, technical capabilities and ability to work in highly regulated markets are rare and valuable in this industry,” PointsBet CEO Sam Swanell said. “This means we can leverage what we have built to deliver shareholder value now, and importantly increasingly into the future.”
The company’s focus turns to the Australian and Canadian markets, where PointsBet is confident it will reach current guidance in 2024.
Operations in those markets have grown over the last five years from $26 million of revenue in 2019 to an anticipated return of between $230 and $250 million in fiscal year 2024.
PointsBet, which reported a group net win of $230 million in FY 2023 ending June 30, reached $210.3 million, up 7.6% year-over-year, with gross profits growing 5% to $105.7 million.
The sale of U.S. operations to Fanatics is worth $225 million and the changeover has been approved by regulators in eight states. PointsBet has already received $175 million with the rest of the transaction to be completed by Q3 2024. Migration from PointsBet to Fanatics was recently completed in Virginia.
On to Ontario
PointsBet pulled out of the U.S. because it wasn’t cost-effective to stay, considering the various tax rates in each state and the competition from other operators.
Canada’s most populous province, though, provides PointsBet with a viable market. Ontario sports betting and iGaming recorded a $14 million handle in Q3 2023.
“In Canada, PointsBet is live in the sports wagering and iGaming market in Ontario,” Swanell said. “The Ontario market structure is attractive for sports and iGaming operators, including no partner revenue share agreements, nominal license fees and an acceptable effective tax rate of 18% of gross gaming revenue. The lower capital requirements and higher operating margins relative to most U.S. states create strong prospects for attractive future economics.”