PointsBet Holdings Ltd (ASX: PBH) shares are inching lower in early trade despite the company announcing its iGaming platform has launched in Michigan. At the time of writing, the PointsBet share price is trading 0.14% lower at $14.03.
Let's take a closer look at the news from the online bookmaker this morning.
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PointsBet's iGaming outlook
The PointsBet share price is failing to respond following news the company's subsidiary, PointsBet Michigan LLC, has launched its iGaming platform in the state. This came after PointsBet received authorisation from the Michigan Gaming Control Board.
iGaming is the act of betting on the outcome of an event – typically sports events – online.
PointsBet has ongoing and upcoming iGaming markets in New Jersey, Pennsylvania, Michigan, and West Virginia.
According to PointBet's release, the combined iGaming revenues from the 4 states in the quarter ended 31 March 2021 was US$770 million. If consistent, revenue from the states will equate to $3 billion annually.
PointsBet launched its sports wagering product in Michigan in January. It plans to launch its iGaming platform in New Jersey in June.
The company states that New Jersey's iGaming industry had a compound annual growth rate of 25% between 2014 and 2018. It also said iGaming revenues from the state grew by 101% last year.
According to PointsBet, profits from iGaming in the United States have increased dramatically over the last 3 years due to the repealing of the Professional and Amateur Sports Act. The Act effectively banned sports betting throughout most of the United States.
Commentary from management
PointsBet's group CEO and managing director Sam Swanell commented on the news, saying:
Over the past 18 months we have assembled a highly experienced iGaming team which has built our in-house proprietary iGaming platform and administrative tools and I am thrilled today to announce the inaugural launch in Michigan.
The launch of iGaming not only complements our existing sports wagering products, but also removes the disadvantage we have had with customer acquisition, retention and cross sell compared to those operators with iGaming.
PointBet share price snapshot
Despite today's disappointing reaction, the PointsBet share price has been performing well on the ASX lately. Currently, the company's shares are up by almost 19% year to date. They are also up by a whopping 235% over the last 12 months.
PointsBet has a market capitalisation of around $2.6 billion, with approximately 207 million shares outstanding.
