Revenue up at PointsBet amid Australian growth in FY2020

28 July 2020

Online sports betting operator PointsBet has reported a 190.9% year-on-year rise in net revenue during its 2020 financial year, aided by strong growth from its core Australian operations.

Net revenue for the 12 months to 30 June amounted to AUD$82.1m (£45.5m/€50.0m/US$58.6m), up from $28.2m at the same point in 2019.

Group turnover also increased by 103.1%, from $567.1m to $1.15bn for the year, while total active customers jumped 39.2% to 111,361 by the end of its financial year.

PointsBet said most of this growth was due to a continued strong performance by its core Australian business, where net revenue jumped 159.4% to $75.1m for FY2020. This followed four quarters of revenue growth during the period.

Australian gross win - revenue before accounting for bonus costs - was also up 99.6% to $100.8m, while overall turnover in the country increased by 69.5% to $830.5m.

In terms of the US, net win revenue amounted to $7.0m for the year, while gross win came in at $16.5m, representing a huge increase of 651.9% on the previous year, though from a low base. US turnover also rocketed 316.8% year-on-year $321.1m, after the operator expanded into three states - New Jersey, Iowa and Indiana - by the end of June.

The operator has also secured a permit to launch retail and digital betting in Illinois, subject to partner the Hawthorne Race Course receiving a master sports wagering licence. Plans are in place launch in the state before the end of August, while the operator is also plotting expansion into Colorado, where it has secured a licence, and Michigan.

Looking at spending for the year, costs of sales amounted to $33.1m, marketing and sales expenses totalled $34.6m, while staffing costs came in at $29.4m. The operator also noted $16.2m in administration and corporate costs in FY2020.

Though PointsBet did not go into further details about its full-year performance in the report, it did note that by the end of the financial year, it held $135.4m of corporate cash and had no borrowings.

Full-year growth comes despite PointsBet having been impacted by the novel coronavirus (Covid-19) pandemic in the latter part of the third quarter and also in Q4.

PointsBet had already announced year-on-year growth in Q3, and has now said that while its US business was impacted by the pandemic in Q4, its Australia arm continued to perform well and post growth.

For the three months to 30 June, group net win revenue totalled $33.5m, up an impressive 355.7% from $7.4m at the same point in 2019. Turnover was also up 57.9% year-on-year to $349.4m.

Much of this was down to growth in Australia, with gross win revenue rocketing by 330.4% to $32.4m – a new quarterly record for the operator – with turnover also up 80.5% to $302.9m - all despite the pandemic.

PointsBet said that this success was driven by three key factors: racing turnover growth, the improvement of its overall offering in the country, and the shift of gambling spend to online as a result of the Covid-19 crisis.

In contrast, US net win revenue for Q4 came in at $1.2m, which was an increase on a loss of $800,000 last year, but turnover slipped 12.9% to $46.5m for the three-month period.

This stunted growth and turnover decline was, PointsBet said, primarily due to the fact that all major league sports were suspended in the US as a result of the Covid-19 pandemic. 

However, PointsBet said it was helped by regulators in certain states approving wagering on new sports and competitions to help fill this void, including darts, sports contests and a number of football, basketball, tennis and table tennis tournaments from around the world.

As a result, the operator said it was able to maintain engagement with customers in the US, and with major league sports now starting up again, believes it is well placed to pursue growth in the country during FY2021.

Analysing quarterly spend, costs of sales reached $11.2m, while marketing and sales costs came in at $9.3m, staff expenses $6.7m, and administration and corporate costs $5.4m.

In terms of events after the end of the quarter, and indeed financial, year, the operator secured its permit in Illinois and also agreed a new deal with online wagering solutions provider BetMakers to launch fixed-odds betting on horse racing in New Jersey.

PointsBet also achieved a pair of industry firsts through its exclusive partnership with the Detroit Tigers, becoming the first sportsbook to partner a Major League Baseball (MLB) team and the first to partner a Michigan-based sports franchise.