- PointsBet USA had an abysmal year for profits when compared to its Australian market that brought in the bulk of earnings for 2020.
- The sports betting company attributes their poor U.S. numbers to the outbreak of COVID-19 and how it affected major sporting events.
NEW YORK – The fourth-quarter reports are in for PointsBet and the Australian sportsbook company recorded Australia as bringing in the lion’s share of profits for 2020 when compared to PointsBet USA.
Combined, 2020 showed a $349.4 million increase in Q4 from 2019 Q4 reports. That’s a 57.9% jump from the year before and Australian betting activity brought in $302.9 million of it, leaving the US responsible for the small remainder of $46.5 million.
COVID-19 Infected US Profit Margins With PointsBet
For the year, PointsBet was able to bring in $1.2 billion that more than doubled their totals for 2019. Sports betting in Australia accounted for $830.5 million of that total.
PointsBet USA took in less than half of that number for the year with $321.1 million. Together, the sports wagering operation saw $135.4 million in company cash with no borrowed funds reported.
While the U.S. did poorly in a side by side comparison, PointsBet managed to end the year in the green both literally and figuratively. They had $82.1 million in net profiting for 2020 which is a 7.1% growth from 2019. But why was it that the United States fared so poorly for the year while Australia thrived? The Coronavirus Pandemic.
Most U.S. sporting events were stopped in March, leaving a ton of wagers and money left on the table. With this happening, PointsBet decided to scale back on marketing and advertising to their American clientele. Without major sports for gamblers to wager on, spending money to market less popular listings on obscure bets seemed to be a wasteful expense, so the company stopped its usual promotions for sports bettors in the nation.
“Active clients have increased by 9,206 (being 9%) in H2 FY20 compared to an increase of 34,145 (being 74%) in H2 FY19, and this is a direct result of the suspension of sports in Q3 and Q4 and the reduced marketing spend in the US,” said PointsBet.
PointsBet USA would see a $7 million surge from their 2019 to 2020 net profits. For Q4, they had a 2.5% rise equating to $1.2 million.
This can be attributed to the wide range of wagers available for gamblers without major league sports. This included things like eNASCAR, iRacing, and table tennis among other competitions happening worldwide.
Expect To See A Future Surge For PointsBet USA
With the reopening of most major sports at both collegiate and professional levels, the sportsbook operator assures their investors that engagement from clients, as well as a wave of new clients from their legal sports betting operations in the US market, is to be expected.
As more popular sporting matchups begin to surface, PointsBet will resume their marketing and advertising strategies toward their American customers.
This combination should likely result in much higher profit margins for PointsBet USA as they go into the new fiscal year with the hope of not being as outshined by their Australian counterpart this time around.
Christina has been writing for as long as she can remember and does dedicated research on the newly regulated sports betting market. She comes from a family of sports lovers that engage in friendly bets from time to time. During the winter months, you can find Christina baking cookies and beating the entire staff at Mario Kart…the N64 version of course.