PointsBet (ASX:PBH) share price slumps despite US iGaming launch

The PointsBet Holdings Ltd (ASX: PBH) share price is on the slide despite news the company's iGaming platform launched in Michigan, USA.

| More on:
gambling asx share price fall represented by woman in soccer had looking frustrated at tablet screen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »