PointsBet Q1 growth driven by increased margin in New Jersey
Operator to save $6.5m in marketing costs to mitigate coronavirus
PointsBet’s US business reported positive net revenue growth to $2.2m in the quarter ending March 31, 2020, up from a $300k loss the previous year.
In a trading update this week, the Australian sportsbook said the positive results were driven by an increased net revenue margin of 3.6%.
New Jersey yielded the best figures, with $55.5m in turnover and a gross revenue margin of 6.5%.
The firm didn’t take any revenue from its Catfish Bend Casino sportsbook in Iowa during the period, following sweeping casino closures in March.
Its Indiana betting app reported turnover of $261,284 following its March launch.
PointsBet said the result was “particularly pleasing given US sports were put into temporary suspension around March 12.”
“The company saw the benefits of its strategic pre-launch marketing efforts with encouraging results post-launch,” the firm said.
To mitigate the impact of Covid-19, PointsBet plans to save $6.5m by reducing marketing and cost-of-sale costs by 85%.
The operator said it had a clear response plan to meet the challenges presented by the virus, including cutting costs and furloughing 20 US staff in April.
It expects revenue for the Australia business to be relatively unimpacted as racing is still being carried out.
The firm’s New Jersey market share fell to 5.6% in Q1, down from 5.9% in the previous quarter.