PointsBet reveals Ontario awareness focus amid “sea of sameness”
Australia-headquartered operator lifts lid on Canadian and US strategies with focus on “genuine clients” rather than winning through massive promotional activity
PointsBet Canada CEO Scott Vanderwel has lauded the group’s performance in Ontario, suggesting the firm is winning the battle to stay above the “sea of sameness” in the newly launched market.
In its fourth quarter financial year 2022 results, PointsBet confirmed sportsbook handle of A$16m, generating total net win of A$200,000 in the three months since Ontario’s launch on April 4.
During the period, PointsBet accrued 7,239 cash active clients, spending C$7m on marketing over the quarter and operating with a sportsbook gross win margin of 4.2%
Discussing the performance of the business in the Q4 FY22 earnings call, Vanderwel cited a “competitive intensity” in the market, with 19 Ontario-licensed operators and a number of existing gray market players still in operation.
“PointsBet is a new brand in Ontario, so we continue to focus on building awareness of who we are,” Vanderwel said.
“Our approach has been to stand out from the sea of sameness that customers are seeing through mass media and to engage with our target customers more directly through our strategic partnerships with key sports teams and organizations,” he added.
PointsBet’s strategy has been very Canada-centric in nature, with the firm signing deals with entities including Curling Canada, Ottawa Redblacks, Alpine Canada Alpin, and the NHL Alumni Association (NHLAA).
Other notable deals include Maple Leaf Sports and Entertainment as well as a marketing-led deal with the Trailer Park Boys.
As well as lifting the lid on the Ontario market, PointsBet reported a 72% year-on-year increase in its total net win in the neighboring US market to A$30.4m, punctuated by a 47% rise in sportsbook net win and a whopping 355% jump in US igaming net win.
In addition to its increases in net win, PointsBet US reported a 67% increase in cash active clients to 266,882 players and US marketing expenditure of $27.4m during Q4 FY 2022.
Despite these figures and launching in two new states during the period (New York and Pennsylvania), PointsBet’s blended US market share fell in Q4 FY22 to a share of just 3.5%.
Echoing comments made in previous earnings calls, PointsBet USA CEO Johnny Aitken affirmed the US business’ focus was not on chasing immediate handle, turnover, or market share, but instead on accruing customers that would deliver growth in the longer-term period.
“We are serving the needs of the revenue-generating customer and really focusing on those higher-value customer segments, as opposed to booking any handle that would generate any sort of revenue, even loss-making,” Aitken explained.
“The second point would be from the improving margins both at a gross and net win perspective is that we are continuing to see customer behavior improve in placing bets on non-core markets, particularly in-play.
“We’re really enthused by the increased activity on in-play player props and in-play lightning bets, which again are proprietary markets that we power through our internal technology on the NBA post-season, and again from next month in every state for MLB as well.
Aitken continued: “These non-core markets offer opportunities where there are either more than three-way options, where we can book a higher book percentage, and/or we don’t have to compete as hard on price.
“That again can allow us not only to grow activity and grow engagement with the platform, but also continue over time to incrementally increase our expectations and returns around gross win and net win margin,” he added.
Expanding on this answer, Aitken suggested PointsBet had been affected by seasonality and the absence of sporting events from the calendar during the summer months, leading to a reduction in betting numbers and player cash balances.
“We’re looking forward to college football coming back shortly and the professional football in the US and off we go again,” Aitken explained.
“The overarching message that we’re putting out there is that we are focusing on genuine clients over volume clients. Again, we put client numbers out there because it’s a metric and we know that it’s relevant.
“The main point for us is, we’re not going to keep clients on the books with promotions and generosities if they’re not genuine clients and they’re not going to generate net win for us,” he concluded.