PointsBet First Quarter Handle Falls Slightly on Heels of U.S. Exit

PointsBet, an Australian sportsbook, announced its Q1 FY2024 financial results on October 27, 2023. The company had mixed results as it navigates through a transition away from one of the most profitable sports betting markets in the world, the USA, which is home to some of the top sportsbooks and betting sites.

PointsBet’s quarterly report covering the period from July 1 to Sept. 30 showed strong and consistent year-over-year handle figures. This marked the first quarterly report for PointsBet in some time where the company’s U.S. operations were not included in the results for the three-month period.

The company’s exit from the American market will be closely monitored to determine its impact on its financial performance. PointsBet will now focus on Australia and Canada, where it has seen strong returns in the past.

Starting in Q2, Fanatics Betting & Gaming will assume control of PointsBet’s operations in the American market.

Getting into the numbers

PointsBet Underscoreg has reported a $387.5 million handle for the first quarter of its fiscal year, marking a slight decrease of just over 3% compared to the same period in 2022. During Q1 of 2022, the company took in $402 million in bets worldwide.

The PointsBet Q1 report indicates that analysts predict a potential net revenue of $159 million for the Australian sports betting operator for the full year 2023. This projection represents a 10% year-over-year increase in revenues for the operator, despite not having the U.S. market for the majority of the fiscal year.

In the first quarter of its fiscal year, PointsBet’s sports betting operations saw a 14.7% increase in win rate to $55.1 million. iGaming experienced a significant 130.7% net win increase during this period. Australia had an 11.1% win rate for Q1, while Canada’s market saw a remarkable 440% spike in win rate for PointsBet.

The last huge quarterly handle for PointsBet?

As previously stated, PointsBet has exited the profitable U.S. sports betting market, where it operated in 14 important states nationwide.

PointsBet sold their U.S. operations to Fanatics Betting & Gaming in June for $225 million. Fanatics outbid DraftKings for the rights to take over PointsBet operations nationwide. The initial payment of $175 million was made in August before the official transfer of PointsBet U.S.A.’s assets.

In Q1, Fanatics acquired 10 out of PointsBet Underscoreg’s 14 licenses, including those in Colorado, New Jersey, Pennsylvania, Iowa, Kansas, Maryland, Virginia, and West Virginia. It took some time, but the licenses in New York and Wyoming have also been officially transferred to Fanatics.

Only four states are left to transition from PointsBet to Fanatics. The timeline for the transfer has not yet been announced, but it is anticipated that the handover will be completed by Q3 FY2023.

In the end…

It is anticipated that PointsBet will maintain its reputation as a successful sports betting app on a global scale, with the exception of the American market. The company is projecting a 10%-20% increase in net win for the fiscal year 2024, while aiming to reduce total marketing expenses by 15%-20%. These efforts are expected to bring the company close to breaking even in 2024 and achieving positive results in fiscal year 2025.

Australia has been a robust market for PointsBet, while Canada has experienced a significant increase in the popularity of its sportsbook.

Turnover in the Canadian market has increased by an astonishing 111.4% compared to last year, resulting in a 440% rise in win rate for the provider during that period.

“In fiscal year 2025, our goal is to make Canada a profitable market for us. The Canadian business offers our shareholders ongoing access to the rapidly expanding North American market, in a jurisdiction that is more appealing than many US states,” stated Sam Swanell, CEO of PointsBet.

Swanell also expressed the ambition for PointsBet to grow and enhance their online casino offerings in the markets where they are established, potentially leading to a significant increase in PointsBet’s profitability.