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

Australian sportsbook PointsBet released its Q1 FY2024 financial results on Oct. 27, 2023, with mixed results for a company that is in the middle of transitioning out of one of the most lucrative global sports betting markets on the planet that's home to the best sportsbooks and betting sites, the USA.

PointsBet is reporting respectable data and surprisingly stable year-over-year handle figures from its quarterly report spanning the three month period from July 1 to Sept. 30. Q1 happened to be the first quarterly report for PointsBet in some time, in which the company's U.S. operations did not appear in the results for the three-month period.

Eyes will be on the company going forward to see just how its exit from the American market affects its bottom line. PointsBet’s departure from the U.S. market leaves Australia and Canada as its prime countries of business, two jurisdictions the sportsbook has posted respectable returns in.

As of Q2, PointsBet’s presence in the American market will be taken over by Fanatics Betting & Gaming.

Getting into the numbers

PointsBet Sportsbook is reporting a $387.5 million handle for Quarter 1 of its fiscal year. It represents a just-over 3% decline in overall wagering activity for the same period in 2022. Q1 of 2022 saw $402 million in bets taken in by the company across the globe.

The PointsBet Q1 report allows analysts to project a potential net revenue haul of $159 million for the Aussie-based sports betting operator for the full year 2023. It, despite not having the U.S. market to rely on for the bulk of the full fiscal year, would be about a 10% year-over-year improvement in revenues for the sports betting operator.

The win rate for PointsBet sports betting operations increased 14.7% during the first quarter of its fiscal year to $55.1 million. iGaming saw a 130.7% net win increase over that time. Australia's win rate was 11.1% for Q1, with Canada's market providing a 440% spike in win rate for PointsBet.

The last huge quarterly handle for PointsBet?

As mentioned, PointsBet has gotten out of the lucrative U.S. sports betting market, where it had a presence in 14 key states across the country.

In June, PointsBet Sportsbook sold their U.S. operations to Fanatics Betting & Gaming for $225 million after the sportswear retailer-turned sportsbook outbid DraftKings — one of our best sports betting apps — for the right to take over PointsBet operations across the nation. The first installment of the purchase - $175 million was paid in August, prior to the official handover of PointsBet U.S.A.'s assets.

During Q1, 10 of PointsBet Sportsbook's 14 licenses were transferred to Fanatics, including Colorado, New Jersey, Pennsylvania, Iowa, Kansas, Maryland, Virginia, and West Virginia. New York and Wyoming took some time, but the PointsBet licenses in those states have officially been transferred to Fanatics.

Just four states remain in line to switch from PointsBet to Fanatics. No timeframe from the transfer has been given just yet. But Q3 FY2023 is when the completion of the handover is expected to be completed.

In the end...

PointsBet will likely continue to be a respected and successful global sports betting app going forward, just not in America. The company expects a 10%-20% improvement in net win for FY2024, with total marketing expenses falling 15%-20%. It is hoped that with that in mind, the company will be close to break-even in 2024, and positive for FY2025.

Its home country of Australia has been a strong market for PointsBet Sportsbook and Canada has seen a sharp rise in the use of its sportsbook.

Turnover in the Canadian market has risen an eye-opening 111.4% year-over-year, with a 440% increase over that time in win rate for the provider.

“In FY25, we want Canada profitable. The Canadian business provides shareholders continued exposure to the fast-growing North American market through a jurisdiction that is more attractive than most US states,” said Sam Swanell, Chief Executive Officer of PointsBet.

Swanell also mention the desire for PointsBet to expand and build upon their online casino in the markets they have a presence - something that could substantially boost the bottom line of PointsBet's operations.