Online bookmaker Pointsbet Holdings Ltd (ASX: PBH) has released its FY21 first quarter update today.
Pointbet’s strong update
The online bookmaker, which is still riding high after its NBC deal, revealed strong growth this morning. The NBC sports partnership was launched in September.
Pointsbet and NBC Sports began work immediately on the integration of PointsBet within NBC’s media properties including email, digital integrations, podcasts, digital video and display ads, custom digital videos and NBC Sports Predictor.
Compared to the first quarter of FY20, Pointsbet’s turnover went up 193% to $691.9 million. The gross win surged 282% to $70.4 million. The gross win percentage rose from 7.8% to 10.2%.
Pointbet’s net win percentage increased by 222% to $38.1 million whilst the net win percentage improved from 5% to 5.5%.
Perhaps most importantly, the number of active clients rose by 88% to 164,500. This is important for the ongoing turnover and growth. In terms of country breakdown, Australian clients rose by 73% and US clients rose by 159%.
Is it worth buying Pointsbet?
The company is aiming for a 10% online market share in 2025 in Australia. Management believes that there are key structural tailwinds that present an opportunity in Australia to increase the market share. The trend of offline wagering shifting to online wagering is (expected) to continue. There has also been a consolidation of competitors. Pointsbet pointed out that CrownBet, UBet, BetEasy, CentreBet and WilliamHill have all been consolidated.
It may continue to win in the US. It’s expecting to launch in Colorado in November 2020 and in Michigan in the third quarter of FY21. The launch of the iGaming product is scheduled for the third quarter of FY21 and in New Jersey in the second half of FY21.
The NBC deal is huge and could turn Pointsbet into a much bigger business.
I think Pointsbet is definitely one to watch. It’s just hard to say what a good price to pay for it is and it’s impossible to know whether the share price will drop (creating a buying opportunity) or keep rising (meaning today is the best price we’ll get). If you’re keen on Pointsbet then it could be worth buying a small stake and buying more on any weakness.
There are other ASX growth shares I’d prefer to buy for my own portfolio first though, like Pushpay Holdings Ltd (ASX: PPH).
