The PointsBet Holdings Ltd (ASX: PBH) share price slipped 6% in May to close the month at $12.79.
Its shares have gone full circle, back to the same price levels as August last year, after the Pointsbet share price surged ~75% in one day to $13 after securing a five year exclusive contract with NBCUniversal.
Industry tailwinds and announcements had little impact
May has been yet another frustrating month for the PointsBet share price despite the tailwinds behind the US gambling sector.
US sports betting turnover on the rise
Legal Sports Report provides a snapshot of how US sports betting revenues are performing, with most states delivering a significant month-on-month increase in betting turnover. In recent months, turnover has cooled down against seasonal events such as the Super Bowl and March Madness.
PointsBet’s competitors also bite the dust
Elsewhere, PointsBet’s main US competitor, Draftking Inc (NASDAQ: DKNG) delivered its first quarter results on 7 May. According to Bloomberg, the company topped analysts’ expectation and upgraded its earnings guidance for the year.
Draftkings said that it now expects full-year revenues between US$1.05 billion to US$1.15 billion, up from its previous forecast of US$900 million to US$1 billion.
Despite Draftkings’ improved financial outlook, its shares slipped almost 7% on the day of the announcement. A similar scenario played out for the PointsBet share price after its third-quarter update, which saw shares jump on the day of announcement then give back gains in the days that followed.
Major announcements drive little upside to the PointsBet share price
PointsBet delivered two major announcements in May.
On 5 May the company announced that it had been authorised by the Michigan Gaming Control Board to commence its iGaming operations.
iGaming is essentially virtual gambling, with activities including poker, sports betting and online casinos. PointsBet’s Michigan announcement highlighted that:
Across New Jersey, Pennsylvania, Michigan, and West Virginia iGaming revenues exceeded US$770 million in the March 2021 quarter which if annualised would equate to greater than US$3 billion per annum. PointsBet has iGaming market access in each of these states
The inaugural launch of iGaming operations in Michigan will be followed by a launch in New Jersey in June.
On 10 May PointsBet acquired Premier Turf Club, an active pari-mutuel betting operator with a licence to operate in Oregon. Pari-mutuel betting, also known as pool betting, sees customers place wagers against other bettors on the same event. All wagers go into a pool, and the pool is shared equally between those who win. This acquisition would work to expand the company’s product suite and inhouse capabilities.
Despite the financial and operational benefits of both announcements, the PointsBet share price continued to grind in a sideways fashion, finishing the month 6% lower to $12.79.