Australian-based PointsBet’s decision to sell U.S. operations to sportsbook-newcomer Fanatics was not a sign of financial troubles for the legal sports betting company. In fact, being able to focus on other markets set up PointsBet to capitalize on what was a solid final quarter of the 2023 fiscal year and put the online sports betting site in a better position for 2024, the company said.
PointsBet CEO Sam Swanell announced final-quarter revenue of A$102.3 million, up 19.4% year-over-year. Sports betting profits rose 10%, despite a handle of A$1.07 billion that dropped 18% year-over-year.
The 2023 fiscal year produced a sports betting and iGaming revenue increase of 26.4%, while A$335.8 million of the A$391.1 million combined profits made came from sports betting, according to figures released by PointsBet on Friday.
U.S. operations up 35% YOY
The U.S. market accounted for A$41.2 million of the overall net win, up 35.5% from the same quarter in 2022, despite a 24% drop in handle year-over-year. The final quarter saw a 26% drop in marketing and promotions that helped the company improve sports betting revenue by 20% in the U.S.
PointsBet saw a 72% revenue increase year-over-year in FY2023, with A$117 million of the company’s overall revenue coming from the U.S. market.
PointsBet agreed last month to sell those operations to Fanatics for $225 million, setting up a final close date in March 2024, Swanell said Friday. The online sportsbook currently operates in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, West Virginia, and Virginia.
“Both organizations are very excited about what a combination of the Fanatics brand, database, and team together with PointsBet’s technology, market access, and team can achieve in the US gaming market,” Swanell said during Friday’s investor presentation.
FY2024 outlook
PointsBet believes that selling off its U.S. operations will allow the company to cut down on spending and focus more on the Australian and Canadian markets.
PointsBet expects to cut marketing expenses by 15-20% in FY2024 and increase revenue growth by 10-20% compared to FY2023.
Ontario proved profitable, as revenue jumped a staggering 3,052% in the final quarter to $5.5 million.
“From the guidance that we’ve given around FY24, we would expect that Australia would largely offset Canada’s losses in FY24,” Swanell said. “You’d expect that trajectory to continue and the losses to reduce, and then the guidance that we’ve given is that we think in Canada we’ll be EBITDA positive in FY25.”
