ASX-listed PointsBet has appointed Daniel Lucas to the role of chief technology officer (CTO).

Lucas is currently serving out his role as global director of trading technology at Flutter Entertainment, where he is responsible for leading the firm’s global trading technology operation and service.

In that role, he oversees trading tech across Flutter’s major brands including FanDuel, Sportsbet, Paddy Power, Betfair, PokerStars and Sky Bet.

Lucas is expected to take on his new CTO role at PointsBet, taking over from current group CTO Jerry Bowskill, from 1 September this year.

The US-based Bowskill will stand down from his role following the sale of PointsBet’s US operations to Fanatics Betting & Gaming.

Meanwhile Lucas, who is currently based in the UK, will relocate to Melbourne to begin his new role at PointsBet.

Prior to his current position at Flutter, Lucas held several senior positions at Sportsbet in Australia, including as head of data solutions and head of trading technology.

Before that, he held various positions across London’s investment banking sector.

“We are very pleased that a senior executive of Dan’s quality and experience is joining PointsBet,” said the company’s CEO Sam Swanell in a statement.

“Dan’s understanding of complex platform and trading operations, in particular algorithmic trading, risk and advanced analytics together with his strong people leadership skills, are valuable assets to PointsBet’s Australian and Canadian operations, as we continue to invest in our market leading live betting and multi capability through Odds Factory.”

Lucas added: “I am super excited about the opportunity to join a technology and product-led company like PointsBet. They continue to invest in their platforms and there are exciting growth opportunities ahead.”

Swanell also offered his thanks to outgoing CTO Bowskill, saying he had made an “outstanding contribution” to PointsBet over his tenure with the business.

Trust the numbers

The Guardian this week brought us the story of one of the world’s most successful gamblers, Haralabos “Bob” Voulgaris.

Since staking $80,000 on the LA Lakers to win the NBA championship in 1999, and winning, Voulgaris has been on a mission to make his passion for sports analytics pay out big time.

Following his first big win, he soon went on to rake in millions from bookies, often having to resort to using ‘beards’ – other people to place bets on his behalf – including some of an incredibly high profile, such as undefeated boxing world champion, Floyd Mayweather.

Having been brought up by a father with a habit for losing bets, Voulgaris became determined to use data and analytics to develop an edge for himself against the bookies.

Fast forward several years, and he’s now turning his talents towards the world of sports itself.

Rather than simply placing bets on his favourite team to win, Voulgaris has truly put his money where his mouth is by buying up third-tier Spanish football team, Castellón FC.

His initial plan had been to buy a basketball team, he said, but “they were trading for $200m, $300m and I was like: ‘I can get there.’ Every time I got close, the goalposts moved: $300m, $700m, $1bn. I felt like Sisyphus with the rock.”

Instead, he ended up investing in Castellón for a little over $4m in 2022, suggesting that “buying a third-tier team makes sense because we feel we have an edge, there are inefficiencies we identify, and the pyramid structure is super-rewarding: good work gets you promotion, bad gets you relegated.”

Voulgaris has since gone all-in on helping the team make its way up through the ranks of Spanish football, using his lifetime of experience in sports analytics to inform the decisions meant to get them there.

By using “young players, proper coaches, staff, the right facilities,” Voulgaris hopes to provide the team with what it needs to excel, without going overboard on spending.

“We’ll spend but I won’t throw $350,000 at some 35-year-old,” he insists.

So far, it seems his strategy is paying off, with the team holding its own against rivals one and even two tiers above it in Spain.

“I think we’re doing pretty special stuff here. It’s our model so it’s biased, but we’re 53% to win the league,” Voulgaris says.

And if he’s right, his players will be in for a decent bonus at the end of the season. 

Readers are encouraged to check out this article in full, to revel in the glory of Voulgaris’ own rags to riches story – one he’s now trying to replicate for the players and fans of Castellón FC.

“VIP” treatment

The Wall Street Journal this week brought us the story of a psychiatrist in the US whose life was torn apart by an online gambling addiction she says was fuelled by bonus credits, VIP treatment and data tracking by bookmakers.

Having racked up hundreds of thousands of dollars of debt already, Kavita Fischer “hit a hot streak last summer” that saw her turn $750 into half a million in the space of just six days.

The winnings were enough to pay off her debts, and put the gambling addiction that had taken over her life well and truly behind her.

After making a request to withdraw the funds from her PointsBet account, however, Fischer promptly changed her mind, and after putting it back into play, lost nearly all of it within a day.

“As a psychiatrist familiar with human impulses and addiction, Fischer knew better than most what she needed to do,” according to the WSJ, but she was also up against the sophisticated abilities of gambling firms to leverage data analytics and human behaviour to keep customers betting.

Operators “tracked the ups and downs of Fischer’s betting behavior and gave bonus credits to keep her playing,” the article says, while “VIP customer representatives offered encouragement and gifts.”

The story is one that has already played out in mature European markets like the UK, and following media outry, social and political backlash, has largely been stamped out: the days of major gambling firms offering luxury days out and bonus incentives worth thousands to their “VIP” customers, are apparently all but over.

But in the rapidly emerging online betting sector across the Atlantic, it seems the VIP system is just beginning to rear its head.

PointsBet is not the only operator mentioned in the article, as DraftKings and other operators also apparently plied Fischer with bonuses totalling tens of thousands of dollars.

Again, readers are encouraged to explore this story in full to see the full details of the programmes that kept Fischer gambling, even when it was causing her terrible harm.

If US operators fail to take note of how VIP programmes have played out in other jurisdictions, perhaps this is a story we’ll be seeing a lot more of in the coming years.

Casino prospects say goodbye in Dubai

Al Monitor this week reported on the latest from the United Arab Emirates’ possible future gambling sector.

It wasn’t good news for the industry, however, as MGM Resorts president and CEO Bill Hornbuckle said this week that the firm’s $2.5bn development in Dubai will not be home to a casino.

The integrated resort specialist is in the process of building the Island, a major development based in the Dubai coastal area of Jumeirah.

When finished, the property will boast hotel rooms, apartments and entertainment options, but crucially, will not offer any gambling.

Hornbuckle continues to hold out hope for the possibility of a gambling sector in the UAE, but believes it will arrive first to Abu Dhabi’s Yas Island, where MGM has “spent some time on the ground,” trying to understand exactly what opportunities may be coming down the line.

“If and when both Abu Dhabi itself as the general licence granter for all or any of the Emirates goes, and then ultimately, one by one, the Emirates say they would like it, we hope to be positioned either for Dubai or Abu Dhabi, but time will tell,” Hornbuckle added.

While the development of MGM’s new resort will no doubt improve Dubai’s entertainment and accommodation offerings, it seems casino gambling is still no closer to becoming a reality.

As and when an official licensing regime is introduced, however, the race will be on – and with its latest project now underway, MGM may have put itself in pole position.

PointsBet recorded positive operating cash flow for the first time in Q2 of financial year 2024 (three months ended 31 December 2023).

The company also recorded record levels of net win in both Australia and Canada.

Total sports betting handle was down 4.2% year-on-year for the quarter at A$976.4m, compared to A$1.02bn in the same period of the previous year.

An increased sports betting net win margin of 6.5% (up from 5.9%), however, helped the business to deliver A$63.5m in total betting net win, up 6.2%.

It also saw its iGaming net win in the Canadian market more than double to A$6.4m, giving the business total net win of A$69.9m, up 11.3% year-on-year.

Australia analysis

The vast majority of sports betting handle (A$901.6m out of A$976.4m) and net win (A$59.5m out of A$63.5m) came from PointsBet’s home market of Australia, where the net win margin was up from 6.2% to 6.6%.

Those figures were bolstered by more efficient promotional spend, PointsBet said, as the cost of promotions in Australia fell from 38.2% of gross win to 32.5%.

That improvement was driven by the implementation of tokens and improved data science and CRM capabilities, it said, helping it to offer more personalised promotions to its customers.

Quarterly marketing expenses were also down 33% year-on-year in Australia, to A$13.6m.

In addition, PointsBet said it had reduced its total number of cash active clients during the quarter to 218,288, but managed to increase the number of positive net win cash active clients in the calendar year 2023 compared to 2022, while reducing the number of negative net win clients.

“There are a bunch of clients out there that for want of a better word are bonus chasers,” said CEO Sam Swanell on the company’s Q2 earnings call. 

“And part of what we’ve cleaned out over the last four months is leaking value to those clients unnecessarily, and that efficiency has been what’s helped grow our net win.”

The company expects its number of cash active clients to grow in the coming quarters, it added, while maintaining its improved client mix.

Canada analysis

Meanwhile in Canada, sports betting handle dropped 7% year-on-year to A$74.8m.

Still, a significantly improved net win margin of 5.4% (up from 2.6%) helped the business deliver sports betting net win of A$4m, up more than 90% from A$2.4m in the prior-year period.

Net win for iGaming was also up significantly at A$6.4m, more than double the A$2.9m recorded in Q2 FY23.

That left the business with a record total quarterly net win of A$10.5m in Canada, again more than double the A$5m recorded in the comparative period.

PointsBet said the integration of Strive Gaming, which has effectively tripled its library of available games, alongside improved promotional offerings, had helped to deliver the record revenue level in iGaming.

In Canadian sports betting, PointsBet’s gross win and net win margins were significantly improved year-on-year due to growth in parlay handle mix, the company added.

The number of cash active clients in Canada also increased 18% sequentially to 38,627, while PointsBet recorded its highest quarterly number of first time bettors since the launch of Ontario’s regulated market in April 2022.

2024 guidance

Following the release of its results, PointsBet reiterated previously issued guidance for the full-year 2024.

Expectations for the year include total net win 10%-20% higher than in FY23, a gross profit margin of around 50% and total marketing expenses 15%-20% lower than the previous year.

FY24 normalised operating expenses are expected to fall between A$60m and A$70m, and the group expects to deliver normalised EBITDA at or close to breakeven from April this year.

Full-year EBITDA is expected to come in at a loss between A$9m and A$14m, but the business then expects to deliver positive group EBITDA in the full-year 2025.

Strive Gaming, the leading PAM provider in North America for the iGaming industry, proudly announces the attainment of ISO 27001 certification, a significant milestone that underlines the company’s commitment to robust information security and data management practices.

ISO 27001 is an internationally recognized standard for information security management systems, demonstrating Strive’s dedication to safeguarding sensitive information and ensuring the highest standards of data protection.

Strive Gaming’s successful certification highlights its proactive approach to maintaining the confidentiality, integrity, and availability of data, reinforcing trust among stakeholders and customers.  

This certification news follows the recent announcement of their strategic partnership with PointsBet.

In addition, Strive Gaming has also been granted a provisional internet gaming supplier license in the state of Michigan, solidifying its position as a trusted and compliant player in the iGaming sector.  

This marks a crucial step in Strive’s strategic expansion efforts, allowing it to bring its market leading PAM to the vibrant and growing market in the Great Lakes State.

Strive’s powerful Infinity Rules engine is another USP that operators in Michigan will want to take advantage of. This is a flexible rules engine that brings operators closer to their customers in real-time, significantly increasing performance by delivering various promotions.

Max Meltzer, CEO at Strive Gaming, said “We are thrilled to announce that Strive Gaming has attained ISO 27001 certification and received a provisional internet gaming supplier license in Michigan. These milestones are a testament to our unwavering commitment to excellence, security, and regulatory compliance.

“As we continue to grow and expand our footprint, we remain dedicated to providing a secure and enjoyable gaming experience for our partners. We will continue our dedication to meeting and exceeding industry standards”.

With a focus on innovation, customer satisfaction, and responsible gaming practices, Strive Gaming is poised for continued success in the dynamic landscape of the iGaming industry. 

BetMakers Technology, XLMedia, and PointsBet are the gambling stocks on NEXT.io’s watchlist that faced the most significant losses in 2023.

To see which three stocks performed best last year, click here.

1. BetMakers Technology 

Investors in BetMakers Technology faced a challenging 2023, marked by a substantial decline in the company’s stock value.

Starting the year at A$0.28, the stock plummeted to A$0.08, marking a loss of 71.4% over the 12-month period.

Early last year, BetMakers had warned that its investment in growth opportunities during the first half of the 2023 financial year would result in negative earnings for the full year.

BetMakers invested in betting venture Betr together with News Corp and Tekkorp.

Following the profit warning, the company underwent several management changes, including the appointment of Jake Henson as its new CEO.

However, in another blow to the business, high-profile bookmaker and VC fund owner Tom Waterhouse reduced his stake in the company in March. 

To reset its business, BetMakers announced in May that it would cut over 100 jobs globally as part of a comprehensive cost-cutting strategy. 

Despite these efforts, BetMakers concluded its financial year 2023 without generating a profit, reporting a substantial loss of A$38.8m.

CEO Henson highlighted financial year 2024 as a time to aggressively simplify the operating model and retire legacy systems, establishing a robust foundation for growth.

BetMakers aims to bring down its cost base to under A$110m this fiscal year and intends to explore opportunities with key clients including Norsk Rikstoto, Penn Entertainment and Caesars. 

As a positive step, BetMakers completed a restructuring of its US operations. This move streamlined the business, cut costs, and positioned the company for building “further scale in the US in a profitable way.”

The early months of 2024 will provide investors with greater insight into whether the company has managed to pivot its trajectory.

2. XLMedia

Affiliate group XLMedia has consistently appeared in our monthly “biggest loser” stock market sweeps. 

Unsurprisingly, it has also secured a place among the worst-performing stocks of 2023.

Starting at £0.16 on December 30, 2022, XLMedia’s shares plummeted to £0.07 by the final trading day of 2023, marking a 55.4% loss in stock value.

For H1 2023, XLMedia disclosed a 33.9% year-on-year revenue drop, primarily due to challenges in penetrating the US market.

The company experienced a substantial 46.4% year-on-year decline in US sports betting revenue, which dropped to $16.2m from H1 2022’s $30.2m. 

Despite CEO David King’s repeated emphasis on the non-linear growth pattern in the US market, the stock value decline throughout the year suggests that investors have become increasingly impatient.

Moreover, the situation worsened toward the year’s end.

In December, XLMedia revised its full-year revenue and adjusted EBITDA projections downward due to its major partner Barstool Sportsbook exiting the market. 

The affiliate business anticipates its 2023 full-year revenue to range between $50m-$52m, with adjusted EBITDA expected at $12m-$14m.

XLMedia intends to continue selling off some of its assets but has ruled out selling the entire company for now.

The group has already sold three iGaming affiliate sites for $4m and earlier disposed of personal finance assets for $1.3m. 

Despite talks with interested parties, the board concluded that selling the entire company isn’t the best value proposition due to the current share price.

3. PointsBet 

PointsBet shares took the third spot in our rankings with a 38.3% annual decline. 

Starting at A$1.49, they slid to A$0.92 by year’s end.

Since the end of 2022, the operator had been attempting to sell off portions of its business.

In April, the company altered its strategy and began considering the sale of its US operations, after failing to find a buyer for its Australian arm. 

PointsBet later explained that despite achieving strategic success in the US, the high costs of competing against major brands would prevent the business from achieving positive cash flow in the short term and therefore, it opted to sell the US business.

Sports merchandise giant Fanatics tabled a $150m bid for the business in May, and subsequently entered into a binding agreement with PointsBet as the firm’s board unanimously recommended shareholders vote in favour of the deal.

However, a last-minute all-cash offer of $195m from DraftKings for PointsBet’s US operations almost jeopardised the deal. 

Fanatics eventually increased its bid to $225m and the final completion of the sale is expected to take place in March 2024.

PointsBet hinted at the potential to enhance efficiency in its Australian business after freeing itself from its US operations. 

The company’s global workforce is expected to decrease from approximately 650 full-time employees to around 275 once the sale has been completed.

PointsBet anticipates nearing an EBITDA breakeven point from April 2024, on the back of cost reductions in marketing, technology, corporate, and staff expenses. 

Moreover, in November PointsBet chairman Brett Paton said the company wouldn’t need additional external funding to achieve EBITDA profitability in 2024.

Should PointsBet meet its objectives, investors are likely to embrace this positive direction.

PointsBet CFO Andrew Mellor will exit the business on 29 February 2024, to be replaced by company veteran Alister Lui.

PointsBet said Mellor will remain with the company until the February date to assist with the sale of its US business to Fanatics Betting & Gaming and the release of its H1 financial results.

The $225m sale saw PointsBet offload its loss-making US assets, including market access and technology solutions, to new entrant Fanatics.

The ASX-listed operator said it opted to shake up its management after “discussions with Andrew regarding his future ambitions.”

PointsBet chair Brett Paton said: “Andrew has made a transformational contribution to PointsBet over his tenure.

“He has built a world class finance function that has grown from a small number of employees based in Australia to a high performing team operating across multiple regions.

“He has been an integral part of the global executive leadership team, driving our strong growth and expansion into new regions, while ensuring we had the right capital structure to execute the global strategy.”

Alister Liu appointed as group CFO

Up to replace Mellor is current CFO Australia and head of group finance Alister Lui, who will assume the group CFO position from 1 March 2024.

His appointment follows six years in the business, where he has served in financial controller and treasury roles.

PointsBet highlighted Liu’s “deep knowledge” of PointsBet’s finances, operations and culture, as well as financial and banking experience.

Prior to joining the company in 2017, the University of Melbourne graduate spent a decade working in financial roles in the UK and Australia.

Alongside the ongoing transaction with Fanatics, Liu may have to lead point on the sale of the rump business soon.

Last month, Earnings + More reported renewed M&A speculation that Matt Tripp’s Betr gaming venture may make another acquisition bid.

Reported factors supporting the possibility include the company’s now small scale, its activist investor and Tripp’s own admission to the Australian Financial Review that he is still interested in an acquisition.

“Alister has been a critical member of the finance team and I congratulate him on the move to the group CFO role,” said PointsBet CEO Sam Swanell.

“His expertise and knowledge of the business will continue to be a great asset to the company and provide continuity for our finance function.”

The company also added that, as a result of the sale of the US business, it has ended its chief people officer role, which will instead be merged with the company’s human resources function.

This change will see current CPO Melissa Fitzpatrick exit the business in February 2024.

PointsBet will not require any further external funding to become EBITDA profitable in 2024, according to chairman Brett Paton.

Speaking at PointsBet’s Annual General Meeting, Paton updated shareholders on the company’s 2024 strategy following the ongoing sale of its US operations to Fanatics.

Canada focus

As part of an aim to reach profitability next year, Paton highlighted the improved structure of PointsBet’s Canadian business.

He suggested that Canada’s lower capital requirements and higher operating margins, relative to most US states, create “strong prospects for attractive future economics.”

In an accompanying speech, CEO Sam Swanell echoed this sentiment, highlighting the market’s lack of partner fees, workable tax rate, and inclusion of iGaming.

“We believe the early stage of the Canadian business compliments the 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,” said Swanell.

Alluding to the attempted purchase of PointsBet by Matthew Tripp’s Betr venture, Paton also said previous M&A interest validated the company’s “strategically important place” in the Australian market.

Fanatics sale

The business also provided an update on the ongoing sale of its US business to Fanatics Betting & Gaming.

The deal saw the sports merchandise giant gain access to 15 US states through the company’s market access agreements, with PointsBet having transferred control of 10 states total so far.

Paton said the completion of the $225m sale is “on track as anticipated” by March 2024.

He added that the remaining PointsBet business, active in both the Australian and Canadian markets, will benefit from a “more focused approach” given its newly streamlined nature.

After the full closing of the deal, he said the group’s EBITDA would be “close to breakeven”.

“Importantly, we do not anticipate any external funding requirements to deliver this result,” Paton concluded.

Swanell highlights strength of tech  

Another theme highlighted by PointsBet’s senior management team was the value of its in-house wagering technology assets in Banach.

While the operator sold the provider’s live odds technology to Fanatics as part of the acquisition, it retained a licence to use and further develop Banach assets outside of the US. It also kept its proprietary platform and trading tools.

“I believe it is important for shareholders to understand just how valuable our technology has become,” said Swanell.

“It has been one of the critical features of our company and it bodes well for the value and future of the Australian and Canadian business,” he added.

Mobile sports betting handle in New York reached $2.01bn in October, the highest level of monthly betting activity recorded in the state since its market launch.

Operators generated $166.3m in GGR from the handle, making October the most lucrative month yet in the market in terms of revenue.

FanDuel secures top spot

FanDuel was the standout leader among the state’s eight active online betting licensees, as it took bets totalling $891.9m in October, equal to around 44.4% of statewide handle.

The operator generated $83.1m in GGR from those bets, or 50% of the total.

Flutter Entertainment, the UK operator that owns FanDuel, will dual list some of its ordinary shares on the New York Stock Exchange in Q1 2024.

DraftKings was the next largest operator in the market, taking bets worth $652.3m or 32.5%. GGR for the firm came to $59.3m, around 35.6% of the total.

Also of note in October were Caesars Sportsbook, Rush Street Interactive and BetMGM, all of which handled bets worth over $100m.

Caesars generated $10.9m in GGR from $193.2m in handle, Rush Street generated $3.3m from $114.2m, and BetMGM took $7.2m in GGR from $107.6m in bets.

Further down the list of New York’s mobile betting licensees, PointsBet generated just $1.3m in GGR from $27.7m in handle, while Wynn Interactive made just $313,362 from $12.3m in bets.

Resorts World Bet made a further $894,039 in GGR from $7.7m in betting handle.

The New York market’s former ninth licensee, Bally Bet, stopped taking bets in the state in June this year. The operator is migrating to a Kambi-powered sportsbook from its own software.

New York market growth

October marked the first month in which betting handle surpassed $2bn in New York, as well as being a record high in terms of GGR.

Since launching in January 2022, betting handle has trended upwards in the state, while GGR as a proportion of handle appears to have increased as operators spend less on customer acquisition.

Since launch, operators in the market have handled more than $31.14bn in bets, generating upwards of $2.7bn in GGR in the process.

The total proceeds sent to New York’s tax fund since launch are more than $1.38bn.

The Alcohol and Gaming Commission of Ontario (AGCO) has issued C$150,000 in penalties to PointsBet for responsible gambling violations.

The operator failed to meet several of the responsible gambling requirements set out in Ontario’s regulations, the AGCO said.

In one case, for example, PointsBet failed to intervene with a player who was able to lose more than C$500,000 in less than three months.

The player had been flagged by the operator as potentially high-risk on multiple occasions, the AGCO said, due to markers including incurring significant losses and making repeated withdrawal cancellations.

Despite being flagged, however, “no interventions were provided by the gaming site operator during that period.”

Other failures included failing to enforce a required 24-hour cooling-off period for the player when cancelling their daily deposit limit, and communicating gambling inducements, bonuses or credits through direct advertising without player consent.

Despite having withdrawn consent for direct advertising and marketing, the player was still provided with credits totalling C$35,500 into their account, as well as several offers of free tickets to sporting events.

The AGCO determined that the case demonstrated a failure to ensure that PointsBet employees understood the importance of responsible gambling and were adequately trained to assist players who may be experiencing harm.

“In Ontario, iGaming operators have an obligation to proactively monitor their patrons’ play for signs of high-risk gambling, and to take appropriate actions to intervene and reduce the potential for gambling related harms,” said AGCO CEO and registrar Dr. Karin Schnarr.

“The AGCO will continue to focus on player protection by holding all registered operators to these high standards.”

PointsBet is on track to reach an EBITDA breakeven point around April 2024, according to the company’s Q1 FY24 interim report.

Topline numbers

The company’s continuing operations – now consisting of the PointsBet brand in Australia and Canada – handled A$611m in bets during the three months ended 30 September, amid a year-on-year reduction in handle of 3.5%.

From that, the business declared a gross win of A$75.3m, up 0.9%, as the result of a higher gross win margin compared to the prior-year period (12.3% compared to 11.8%).

Sports betting net win, meanwhile, came in at a margin of 9%, up from just 7.6% in Q1 FY23, delivering A$55.1m to the business in total, up 14.8% year-on-year.

iGaming delivered a further A$3m in net win, up 130.8% year-on-year, to generate total net win of A$58.2m during the quarter.

Of the total net win, A$52.8m or 90.7% came from sports betting in Australia, up 11.2% year-on-year.

The remaining A$5.4m came from Canada, amid year-on-year growth of more than 200%.

A$2.3m came from sports betting in Canada, compared to just A$0.4m in the prior-year, while the remaining A$3m came from iGaming, compared to A$1.3m in Q1 FY23.

The sports betting net win margin in Canada remained very low at 5.3%, but marked a significant improvement on the 2.1% recorded during the same period last year.

News nugget

PointsBet’s sale of its US business to Fanatics underwent initial completion on 31 August this year, and the business received its first installment of consideration worth $175m.

The subsequent completion and receipt of further consideration of $50m is on track for completion during Q3 of FY24.

This development has helped turn around PointsBet’s balance sheet significantly, leaving the company with A$71.8m in cash and cash equivalents as of the end of the latest quarter.

Best quote

“We don’t foresee a world where we head back to general entertainment and broad-based mass market advertising. We don’t believe we were getting the ROI when we were spending in those areas last year.”

– PointsBet CEO Sam Swanell on the company’s more targeted marketing approach

Best question

The best question on this quarter’s earnings call came from Chris Savage of Bell Potter Securities, who asked whether PointsBet’s performance in Canada had been better or worse than the company had hoped.

“In general, it’s definitely going better – we’re clearly on a path to profitability,” said PointsBet CEO Sam Swanell in response. 

“We completed ‘year one’ in FY23, and that was the largest investment year. This year, in FY24, we increased revenue and reduced losses, and in FY25 we want Canada to be profitable. 

“When we talked about the US as a whole, we never got that definitive about the path to profitability.

“That’s facilitated [in Canada] by the fact that the operating environment is more favourable from a gross profit margin and the path to profitability, but it’s also on the back of the fact that we’re very pleased with the progress that we’re making. 

“So now it’s on track. Obviously, this is the big quarter for Canada, you have the NBA and NHL joining the NFL, so this is the biggest quarter and the next one is not far behind. 

“We’ve talked about some improvements that we’re going to bring to the iGaming product as well, so we’re on track and really excited for the next two quarters.”

Current trading and outlook

PointsBet said it expects total net win for the financial year 2024 to be 10-20% higher than in FY23.

It also expected a gross profit margin of around 50%, while marketing expenses are expected to be 15-20% lower than in the prior year.

Normalised operating expenses are expected to fall between A$60m and A$70m, helping the business move towards an EBITDA breakeven point from April 2024.

With continued growth in Australia and Canada, combined with the strength of its proprietary technology, PointsBet said it now has a clear path to profitability in FY25, while the company remains well capitalised following the sale of its US business.