- Australian sports betting operator PointsBet saw the end of its financial year riddled with expenses over US expansion
- Core business operations soared to AUD$25.6 million, up 173% in comparison to the previous fiscal year
- Chief executive Sam Swanell reasons that expenses are necessary for their growing presence on the US market, feeling upbeat despite the financial losses
“The technology agility and operational focus that allowed PointsBet to launch so swiftly and effectively in New Jersey will be a significant competitive advantage as the company launches in numerous states in FY2020 and beyond. PointsBet is on the starting line of the nascent US sports betting opportunity.” Swanell said.
PointsBet’s Financial Year’s End Results
January 2019 marked the Australian sports betting operator, PointsBet, move in on American territories. This has created a serious pull of resources on their side, as the business reported a loss of $515,000 from overall $1.5 million in gross winnings in the US for the period up to Jun 30. Investing in advertising and business promotion totaled $2.1 million, but – in accordance with future perspectives – is expected to pay out in the not too distant future. Sales and marketing alone pulled some $24.9 million for US market promotions. Employee benefits and staff expansion also contributed to the widening of the expenses, as they climbed up to $15.6 million.
Overall, year-on-year spend made a significant spike, as the statutory total for operating expenses spiked up to $47.8 million in contrast to $11.8 million in the fiscal 2018.
Product and technology expenses also spiked expenses, perhaps as the Australian operator is investing in new technology for its new market. Speculations aside, the numbers stand at $1.9 million, up from $300,000 last year. The period also saw administrative expenses climb from $900,000 to $5.3 million.
The overall higher spend also became reason for a bigger statutory loss after income tax. Its 2018 $6.7 million in tax grew to $41.9 million. In light of that the pre-tax loss indicator also spiked from $6.7 million to $39 million.
Despite the pull, PointsBet’s core business in Australia soared 173% from AUD$9.4 million last year to AUD$25.6 million for the 12 month period, which ended June 30th. Net winnings jumped to $28.9 million, up 18.9 million as compared to the year before.
Sam Swanell reflected that the statutory gross profit more than doubled during the said period and was not feeling discouraged in view of the numbers.
PointsBet’s Future on the US Regulated Sports Betting Market
However, PointsBet reported positive results from New Jersey, as their overall contribution climbed 3.2% in June, making for a total of 5.4% contribution to the New Jersey regulated sports betting market in just a few months, in comparison to their February reports, which stood at 2.2%.
Furthermore, the operator has just recently received a green light for launching in Illinois, Indiana – which just recently joined the market – as well as Iowa, Pennsylvania and West Virginia. Other promising perspectives from Colorado, Louisiana, Missouri, Ohio and New York are also on the table, awaiting confirmation.