Pointsbet Slashes Net Losses by Losing US Business

PointsBet Holdings achieved a remarkable 79.6% reduction in net loss, amounting to AU$36.4 million, during the first half of the 2024 financial year.

This noteworthy improvement followed the strategic divestment of its US business to Fanatics Betting and Gaming (FBG) for a substantial $225.0 million in August 2023.

FBG has been systematically phasing out the PointsBet brand across various US states, with the most recent transition occurring in Iowa last week.

Despite relinquishing its presence in the US market, PointsBet strategically redirected its focus to other lucrative regions.

The brand continues to thrive in its native Australia and remains active in the dynamic Canadian market.

During the six months ending on December 31, 2023, PointsBet recorded a statutory revenue of AU$117.9 million from continuing operations, showcasing a commendable 6.7% growth compared to the previous year's $95.3 million.

This positive trajectory was primarily fueled by an exceptional performance in Australia, where revenue soared by 6.7% to reach $101.7 million despite a 4.1% drop in turnover.

Furthermore, H1 marked a significant milestone as Australia became EBITDA-positive for PointsBet, with EBITDA reaching $900,000—a noteworthy shift from the $20.2 million loss in the preceding year.

Meanwhile, Canada exhibited remarkable growth, with revenue surging by 137.3% year-on-year to $15.9 million, driven by a substantial increase in both total iGaming revenue (up 126.2% to $9.5 million) and sports betting revenue (up 152.0% to $6.3 million).

Operational costs experienced a notable reduction of 29.2%, totalling $72.1 million in H1.

This cost-cutting measure was evident across all areas, with a particularly significant 30.2% decrease in sales and marketing expenditure to $42.4 million.

Net finance costs amounted to $12.1 million, contributing to a pre-tax loss of $32.7 million, a considerable improvement from the $53.6 million recorded in H1 2023.

In a noteworthy personnel change, Daniel Lucas has been appointed as PointsBet's new group chief technology officer, succeeding Jerry Bowskill, who stepped down following the FBG deal in August 2023.

Lucas, formerly the global director of trading technology at Flutter, brings a wealth of experience to the role.

In summary, PointsBet's strategic move to divest its US business has proven beneficial, leading to substantial reductions in net loss and operational costs.

The brand's intensified focus on Australia and Canada has resulted in impressive revenue growth, setting a positive trajectory for future endeavours.