PointsBet Holdings Ltd (ASX: PBH) hit the ASX on 12 July 2019 after successfully raising $75 million at $2.00 per share. The company is a corporate bookmaker that offers innovative sports and racing betting products and services via its scalable cloud-based technology platform.
So, what exactly makes PointsBet an exciting or worthwhile investment opportunity compared to peers such as Tabcorp Holdings Ltd (ASX: TAH) or Jumbo Interactive Ltd (ASX: JIN)?
A closer look at Pointsbet
With its in-house cloud-based technology platform, Pointsbet changed its growth trajectory from an everyday Australian bookmaker to an industry player with the right tools to capitalise on an emerging land grab betting market in the United States (US).
Sports betting was illegal in the US prior to May 2018. The Professional and Amateur Sports Protection Act was challenged in court when New Jersey attempted to allow sports betting by working around the federal law. As a result, states can now independently decide whether they want to pass legislation to legalise sports betting. Since the ruling, 11 states have legalised sports betting.
This opportunity provided the company with a commercial licence to operate as an online corporate bookmaker in New Jersey. PointsBet commenced taking bets in New Jersey in December 2018 and launched its brand and marketing campaign in January 2019.
PointsBet has also entered into agreements to allow the company to acquire a commercial licence to expand its wagering operations in New York, and operate exclusive retail sports book operations in Iowa, Colorado and Illinois.
The company recently announced its maiden Q4 Appendix Cash Flow Statement. This highlighted year-on-year growth of 172% in net revenue to $25.6 million, 254% rise in registered clients and 244% increase in turnover to $567 million. PointsBet cited its turnover market share in New Jersey to be 5.4% in June 2019, up from 2.2% in February 2019.
On the same day, PointsBet also announced an agreement with Penn National Gaming, an American operator of casinos and racetracks. This agreement enables PointsBet to develop, own, market and operate its branded online sportsbook and gaming operations in Ohio, Indiana, Missouri, West Virginia and Louisiana, subject to legislation. This further expands PointsBet geographic presence to 10 states.
Foolish takeaway
In a short period of time, PointsBet has demonstrated a strong execution of obtaining licensing and operating agreements across emerging legalised states in the US. I believe this is a land grab opportunity for industry players and PointsBet is strongly positioned to continue to leverage its scalable cloud-based technology and expand its geographic footprint and brand positioning.
