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As of this morning, the Australian sportsbook PointsBet has made its first foray into the US iGaming market. It already offers sports betting in six states and has now rolled out an online casino in Michigan.
The Michigan Gaming Control Board (MGCB) approved PointsBet to launch this new vertical through the same partnership with the Lac Vieux Desert tribe, which it uses for its Michigan sportsbook.
PointsBet, though small, manages to differentiate itself in the sports betting space with its eponymous Points Betting product, offering variable payouts. How it fares in the casino space remains to be seen, but it plans to expand further into iGaming in the US with a New Jersey launch coming soon. The Garden State is one of those in which it operates as a sportsbook, via Meadowlands Racing and Entertainment.
PointsBet has market access in several more states and plans “to be operational in 18 US states” by the end of 2022. Pennsylvania and West Virginia are among those, so more PointsBet Casino launches could be forthcoming.
PointsBet is the 12th operator to provide both a Michigan online casino and online sportsbook. Parx Interactive would have claimed that title, except that it only provides online casino gambling via Gun Lake Casino and lacks a sportsbook thus far. When that arrives, it will become the 13th.
PointsBet’s Apr. 29 investor presentation said iGaming has the potential to be a “significantly larger opportunity than sports wagering.” Online sports betting had just over a quarter-slice of the pie graph it presented, comparing the two verticals’ respective share of New Jersey and Pennsylvania’s gross win in 2020.
Online casino far outpaces sports betting revenue in the states that have legalized both. Typically, it accounts for between two-thirds and three-quarters of such states’ all-vertical online gambling revenue. Nontheless, PointsBet says it expects sports betting to be the bigger market nationally due to the faster pace of legalization, and to produce double the revenue of iGaming in the US by 2025.
In the meantime, PointsBet said in its investor presentation that it feels it has an advantage in the iGaming market. That’s because it owns and controls its in-house tech stack and game development division. Most operators depend on third party software and game suppliers, the company noted. It seems that competitors agree, and some are taking steps to build out their own game development capacity.
PointsBet is also looking at modernizing its sports betting offering, according to the presentation:
“Within three years, it is anticipated [that] 75% of bets placed in the US will come from in-play betting products, up from [the current] 50%.”
To accommodate that trend, PointsBet acquired Banach Technology in March.
Despite all of this optimism, PointsBet doesn’t appear to expect to join the top three operators. Rather, it has the more realistic goal of achieving a 10% market share in each state it enters.
At the moment, FanDuel dominates the market, and BetMGM and DraftKings are just steps behind. There’s so much money on the table, however, that even a 10% share would be a dream for PointsBet’s investors.