PointsBet looks to replicate US model with new Australia CEO

PointsBet CEO Sam Swanell has revealed the firm is looking to hire its first Australia CEO. Speaking during the ASX-listed operator’s Q3 results call, Swanell highlighted double-digit growth in the Australian division, suggesting this had provided “strong momentum” to push the business forward. “We’ve prepared for a huge Melbourne Cup week, where we expect to see new betting activity records being broken,” Swanell explained. “MSC estimates that Australia is now a A$5.7bn net wagering market with circa 84% of this online and we see huge opportunity for innovation and acceleration, similar to what we envision for the North American market.” Swanell explained that the new Australia CEO will report directly to him and will be charged with capitalising on the “emerging opportunity” in Australia following the Covid-19 pandemic. PointsBet operates a similar model in the US and Canada, where Johnny Aitken and Scott Vanderwel are respective chief executives. As one of the only areas in the world where sports, and in particular horseracing, remained unaffected by the Covid-19 lockdown, Australia’s market development has proceeded largely uninterrupted. The lockdown also closed Australia’s retail bookies, something which directly benefitted the country’s online operators both in terms of market share growth and revenue as land-based customers migrated online. Despite the investment in the Australian business, Swanell was keen to stress this would not distract from the firm’s operations in the US, suggesting it was a “natural evolution” for the business. “An opportunity exists for PointsBet and the wider digital gaming industry to grow the TAM at the expense of competing gambling verticals, such as land-based gaming and lotteries,” Swanell explained. “A lot of the thinking, innovation and acceleration opportunities that we are actively considering in the US and Canada, we’ve got to bring that same thinking to Australia. We’ve obviously put ourselves in a strong position and we see great opportunities for innovation. “The fact that we have group strengths that support the North American market gives us those reverse economies of scale we can pull back into Australia, so we do have some weight behind us to compete with the likes of Sportsbet and Ladbrokes,” he added. As Australia provided growth, PointsBet’s US operations stuttered during Q3, with the firm experiencing quarter-on-quarter drops in market share in many of its key US markets.

Swanell contended this decline was due to the highly competitive US environment, where marketing spend has created an “arms race” between operators to acquire customers by spending as much as possible. “We’ll spend an amount that we think is comfortable and can return a positive ROI,” he explained. “We will continue to assess the market and the opportunities, but we’ve got to focus on our product, our people and building the business for the long term. We’re not saying that we are not going to compete, because we obviously will.” Swanell suggested the firm would still have a thriving business if overall US market share dropped to just 5%, admitting it would be “naïve” to think it had the same advantages and customer databases built up by the likes of BetMGM and FanDuel in the early days of the US market. “We’ve been competing ever since we got into the US, but there’s no doubt that the level of promotions and marketing spend have had an influence on share of wallet being taken away from PointsBet and redirected to someone like BetMGM, which has benefitted from a sports betting perspective,” Swanell added.