Aussie online bookmaker on the fast track to US with new deal
Online bookmaker PointsBet is expanding its footprint in the United States, under a new horseracing partnership with American racing behemoth The Stronarch Group.
The deal between The Stronarch Group’s 1/ST and ASX-listed PointsBet’s subsidiary Premier Turf Club will allow PointsBet users to carry out advance deposit betting in 30 US states from 2023. 1/ST will develop the horse racing betting product, which will be integrated within the existing PointsBet sports book app.
PointsBet group chief executive Sam Swanell has bet aggressively on US expansion.Credit: Chris Hopkins
PointsBet chief executive officer Sam Swanell said he was confident in the group’s ability to transition existing sports punters into racing bettors.
“Our Australian racing experience shows we know how to convert bettors to grow a new audience. We think this is the best racing product in the US and the regulatory cost is quite low,” Swanell said.
PointsBet is currently the seventh-largest operator in America’s $13 billion-a-year sports betting market, with a 3.7 per cent share and is operational in 12 US states. By the time of the launch in early 2023, PointsBet will have the licence to operate horse racing betting in 31 states, most of which do not currently offer sports betting and also hopes to grow its sports betting to 14 states, having applied for licenses in Maryland and Ohio.
New Jersey is the only operational state which will not feature horse racing next year as the state has a single-tote licence, obtained in a 10-year deal with PointsBet’s rival BetMakers in 2020.
The US sports betting market is expected to grow as more states legalise the activity. US horse racing is expected to grow to more than $3 billion in yearly gross revenue by 2026, up from its existing $2 billion.
Swanell said PointsBet is banking on fixed odds betting to develop in the US as the market matures, for its early investment to be rewarded.
“It’ll develop in time just like it did in Australia after the bookies came in about 2008,” he said.
1/ST is one of the biggest horse racing organisations in the US and holds the Pegasus World Cup and Preakness states. Under the deal, PointsBet will pay 1/ST a portion of the racing revenue. There are no upfront payments or minimum guarantees over the term. For now, the group’s competition is Irish wagering giant Flutter, whose racing outfit FanDuel Racing is operational in 31 states.
PointsBet defended the cost of its US expansion in August, arguing North America is quickly growing into the key market for wagering because of its population size, sports structure and technological investment.
The Melbourne-born business spent $240 million in sales and marketing, with $162 million pumped into the US alone last year. Swanell confirmed its marketing and sales spend would not exceed this in 2023, adding the partnership with 1/ST mitigates the need for heavy marketing spend.
“We don’t need to spend heaps of money. We’re confident this is the best US racing product and until sports betting grows in these new racing states we’ll contain our sales investment accordingly,” Swanell said.
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