PointsBet CEO hails “superior” tech and post-Fanatics sale future
Sam Swanell suggests Australian and Canadian operations will achieve positive EBITDA in fiscal year 2025
PointsBet global CEO Sam Swanell has suggested the firm’s in-house proprietary technology stack is a “global market leader” which will continue to create value for the firm after the sale of its US division to Fanatics Betting and Gaming (FBG).
Swanell was speaking as part of PointsBet’s fiscal year 2023 earnings call, the first since the $225m sale was agreed by the firm in June, with Swanell stressing the positives of the sale throughout the call.
One part of the US business that PointsBet will look to utilize over the coming years is its Banach Technology-developed OddsFactory, which powers the firm’s US in-play and same game parlay products.
These products have continuously performed well in app testing by analysts at Eilers & Krejcik Gaming, something which the company has highlighted on a number of occasions in the past.
“The sale of Angstrom Sports to Entain last week [July, 17] gives shareholders a data point for the value of our technology and in particular, OddsFactory,” Swanell said.
“Angstrom Sports is a specialist provider of sports modeling, forecasting and data analytics, and we believe our OddsFactory capability is superior,” he added.
Under the agreement with FBG, PointsBet retains a copy of the technology, as well as what Swanell deemed an “appropriately sized team” of technologists, traders, and quants that are based in Australia, Canada, and India.
The newly streamlined PointsBet business will, once the sale of the US division is completed, comprise its headline Australia operations and the Canadian division, and Swanell suggested the businesses would benefit from a “significant cost reduction” across both technology and corporate costs.
“Our Australian operation has a strategically important place in the Australian wagering market. We intend to continue to grow our share in this market from a current solid 5% position with the benefit of a more focused approach,” Swanell said.
“The Canadian business provides shareholders continued exposure to the North American market through a jurisdiction that is more attractive than most US states, no partner fees, and acceptable tax rate and igaming complementing sports betting for the entire market.
“We believe the early stage of the Canadian business complements our more mature Australian business as well as providing an opportunity to leverage attractive features of our tech stack that aren’t available in the Australian market, such as igaming and online live betting,” he added.
The PointsBet CEO suggested that the positive EBITDA of the Australian business would offset EBITDA losses in the Canadian business during its scaling up, allowing the company to save money and potentially report positive group EBITDA by its fiscal year 2025.
Of the two divisions, Swanell was particularly upbeat about the potential of the Canadian market, highlighting the positives of Ontario being a multi-product province with both igaming and sports betting.
“In America, we were live in 14 states and only four of the 14 had igaming. In Canada, you have one state that’s live, and it has igaming so you the profitability and the efficiency versus monetization ratio that you get is stronger.
“We are getting better every quarter. Our product is getting better. That’s been seen in the American results, and we will see that in the Canadian results,” he added.
Swanell suggested the potential expansion of the regulated market into the Canadian province of Alberta would not result in an increase in marketing costs for PointsBet Canada, comparing it to a US state rollout.
“When you open a new state in America, it’s its own country basically. Canada will be province by province, but the expectation is that the synergy benefits are far higher as it relates to some of our marketing spend because your performance marketing is very targeted,” Swanell said.
“So you’re only targeting people in the province of Ontario at the moment with your performance marketing. But as it relates to above the line, there’s certainly some spend that we are making that floats into other jurisdictions of Canada.
“If an Alberta was to open up, you naturally get some marketing efficiencies there. You get a lot of operational synergies, there’s not a lot of cost that increases,” he concluded.