A new entrant to the American sports betting market, PointsBet recently raised $80 million to fuel its expansion throughout the US. PointsBet may not be a household name just yet, but with a unique take on sports betting and a customer-centric approach, they may have surprising staying power in the US market.
This recent round of funding came after a June IPO in Australia that raised over $50 million. PointsBet is expected to use its new cache to continue its run of deal-making with operators across the country.
In late July, PointsBet made its largest arrangement to date with gaming giant Penn National. The agreement will put PointsBet sportsbooks in West Virginia, Indiana, Louisiana, Missouri, and Ohio. Of those states, sports betting has been legalized in West Virginia and Indiana. The pact continues the blitzing momentum the company has maintained since becoming the fastest growing sportsbook in Australia.
In addition to that agreement, PointsBet has deals in place at Hawthorne Racetrack in Illinois, at the Double Eagle Casino in Cripple Creek, Colorado, and Tioga Downs in New York. Illinois legalized sports betting in June but has made little to no progress in rolling out a product. New York also legalized sports betting for four casinos in June but has not yet authorized online gaming.
Who is PointsBet?
PointsBet originated as an Australian bookmaker in 2017, and they’ve established an incredible amount of growth in a short period. PointsBet wasted no time partnering up with the New Jersey-based Meadowlands Racetrack in mid-2018 and their sportsbook was up and running by January 2019. That deal also included an agreement with Tioga Downs in New York.
PointsBet continued to show a hunger to harness a piece of the US sports betting pie by becoming the first bookmaker to land an arrangement in Illinois, partnering with Hawthorne Racetrack just outside of Chicago. In September, PointsBet opened its first retail sportsbook at Catfish Bend in Iowa and expect to be up and running in Indiana by the Super Bowl.
What is PointsBetting?
What makes PointsBet unique is the form of spread betting they patented, which rewards a higher payout if your team wins by a larger margin. With greater reward though, comes greater risk. If your team loses by a wide margin, you could be on the hook for a lot of money, depending on your initial bet.
For example, if you bet $10 on the New York Jets -3 points at the Miami Dolphins, and the Jets lose 18-26, adding the spread of 3 with the 8-point loss, you would lose 11x your bet, totaling -$110. If the Jets won by 4 though, they would have covered the spread by 1 point, and you would win 1x your bet.
In one of the more well-publicized bets made in the first week of the 2019 NFL season, one savvy bettor made out like a bandit in his points bet, taking the Ravens -6 over the Dolphins with a stake of $30,000 per point. The Ravens went on to win 59-10, covering the spread by 53 points and rewarding a payout of what could have been $1,590,000.
A key aspect that makes this type of bet palatable is a stop-loss setting which allows you to place a limit on how much you can win or lose. In this example, the maximum amount the bettor could win or lose was set at $600,000.
PointsBet offers a signup bonus of $50 and features two $500 risk-free bets, one for PointsBetting and another for any other type of bet. The uniqueness of the PointsBet format should give customers a reason to download the app, and the app is impressive enough to keep you coming back.
Ultimately, whichever sportsbook offers the lowest amount of juice is going to be the book people bet at. And PointsBet aims to do just that, promising to offer “some of the world’s sharpest betting offers and prices,” according to CEO Johnny Aitken.
Even if there were no bonuses and a slick, easy to use interface, PointsBet would continue to have customers due to their reduced juice lines. For example, this season in the NBA instead of the typical -110 you would see on a game, PointsBet will be at -105. This means that anyone with a desire to bet on the NBA and has access to PointsBet will likely not bet anywhere else.
PointsBet has shown a continued focus on the NBA and excels by providing more forms of NBA bets than any competing sportsbook. This includes up to 500 bet types per game in the NBA, and 100 bet types not offered by any other sportsbook in the world.
PointsBet is Here to Stay
With a unique new way of wagering, a customer-centric approach, and more bets on offer than most sportsbooks, PointsBet is clearly here to stay. It’s no surprise that the company was able to quickly raise an additional $80 million given how beautifully they’ve executed their US expansion in such a short amount of time. I expect investors to be pleased with their return, and I expect PointsBet to establish itself as a major player for a long time to come.