PointsBet has increased its reach in legal sports betting, but the growth has come at a cost.
The Australian-based company released its first-half report for the 2023 fiscal year, generating $120 million in revenue for the six months ending December 31, 2022 — a 28% increase year-over-year.
The results in H1 FY2023 were driven by the company’s business in the U.S., which reported a total sports betting handle of $1.1 billion (a 66% year-over-year increase) and PointsBet taking in a total handle of $2.2 billion in H1 FY2023, while the U.S. sector saw an 81% increase in net win from iGaming.
PointsBet is the seventh largest sports betting operator out of more than 60 sportsbooks with online licenses in the U.S. — the fastest-growing online betting market in the world.
It has live sports betting in 14 states, which include New York, New Jersey, Pennsylvania, Ohio, Kansas, and Maryland, plus Ontario, Canada.
The growing reach translated to more net wins for PointsBet in H1 FY203: The sportsbook reported a total net win of $123 million during the period, up from $100 million in H1 2022.
Cost of Doing Business
Despite the growth, PointsBet reported a net loss after tax of $178 million in H1 FY2023 — a 21.8% increase year-over-year.
The losses were attributed to increased spending on overall marketing.
"Effective targeting and monetization of the right clients is our recipe for improving unit economics and delivering ROI on marketing," said CEO Samuel Swanell on the company’s earnings call.
It is worth noting that marketing spend in the U.S. was down during the period, decreasing by about $10 million from the previous segment. PointsBet is also continuing to invest in responsible gambling initiatives, which Swanell said "is an important issue for the long-term sustainability of the industry, and we take our obligations in the area very seriously."
Taking a Step Back
Last week, PointsBet pulled its application for an online sports betting license in Massachusetts.
The Bay State launched retail sports betting on Jan. 31 and plans to legalize online wagering in March. The Massachusetts Gaming Commission has approved 11 operators for one-year online sports betting licenses, including:
PointsBet has also distanced itself from young students following backlash of a sponsorship deal with the University of Colorado Boulder.
The deal, which paid the university a $30 fee for every signup using a promotional code, included marketing at events with underage students.
As a result of concerns regarding PointBets’ marketing strategy, Colorado amended its agreement with the sportsbook in January to terminate the incentive-based signup program.
