PointsBet revenue doubles, but losses also grow, in Q2

| By Daniel O'Boyle
Betting and igaming operator PointsBet’s total revenue doubled year-on-year to $90.4m in the quarter ended 31 December 2021, thanks to US growth and the addition of betting supplier Banach Technology, but losses continued to grow.
PointsBet launch

The quarter was the second of PointsBet’s 2021-22 financial year.

In total, PointsBet took in sports bets worth AU$1.33bn in Q2, up 11.1% from the second quarter of 2020-21.
The majority of this total came from Australia, where revenue was up 33.6% to AU$727.0m.
In the US, meanwhile, revenue was down by 9.2% to AU$598.9m.

PointsBet revealed that during the quarter it held a 7.4% sports betting market share in the state of Illinois, 5.1% in Michigan, 3.5% in Colorado, 3.1% in New Jersey, 2.8% in Indiana, 2.3% in Iowa and 1.4% in West Virginia.

Gross sports betting revenue grew by 60.4% to AU$133.8m with strong growth in both major markets. In Australia, the total was up by 22.2% to AU$92.2m, while US revenue grew more than fivefold to AU$41.6m, despite the lower handle.

Net sports betting revenue – which is gross revenue minus promotional costs such as free bets, enhanced odds, money-back offers and early payouts – was up 60.7% to AU$71.9m. The vast majority of this total came from Australia, where this total grew by 7.0% to AU$53.1m.

PointsBet’s results were then boosted by an additional AU$5.4m in net online casino revenue – all from the US, as online casino is not permitted in Australia – for total net revenue of AU$77.3m, of which AU$24.1m was from the US.
In the US net betting revenue reached AU$18.8m after a loss of AU$5.1m in 2020-21.

The operator also revealed that it has 232,785 active clients – who placed a bet in the past 12 months – in Australia. In the US, this total was 211,113.

The business then made a further AU$13.1m in B2B revenue. Most of this total came from Banach Technology, the sports betting supplier that it acquired last year. This led to total receipts from customers of AU$90.4m, slightly more than double 2020-21’s Q2 total.

Costs of sales came to AU$44.8m, up 54.8% from the year before. Advertising and marketing costs were up by 51.2% to AU$65.6m, while staff costs doubled to AU$18.9m. Corporate and administrative costs were up by 62.0% to AU$17.0m.

Other income – mostly made up of increases in funds held in player accounts – came to AU$4.2m.
This led to a net loss from operating activities of AU$51.8m. The business made an additional loss of AU$43.6m from investing activities. The vast majority of this total, at AU$35.9m, came from US business development costs, while a further AU$7.0m came from capitalised development costs.

After a further AU$1.1m loss from finance-related costs, PointsBet made a net loss of AU$96.5m. This was 61.4% more than the net loss recorded in Q2 of 2020-21.

After the quarter ended, PointsBet announced a number of major developments. The business launched suspension-free live betting in the US during an NFL playoff game between the Cincinnati Bengals and Las Vegas Raiders.

It then launched online sports betting in New York, a market that opened for business earlier this month, and online casino in West Virginia, as well as receiving licences for both betting and igaming in Pennsylvania.
The business also appointed Eric Lee as vice-president of diversity, equity and inclusion (DEI), a role in which he will oversee PointsBet’s DEI-related efforts and initiatives. Lee had previously been assistant vice-president of DEI at Colorado College.

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