Why is the PointsBet share price on a losing streak today?

The betting technology company has just held its AGM.

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Key points

  • The PointsBet share price is running cold today
  • The online sports betting operator held its 2022 AGM earlier today
  • PointsBet will release its first-quarter FY23 results next week

The odds aren't in favour of the PointsBet Holdings Ltd (ASX: PBH) share price today.

At the time of writing, PointsBet shares are sliding 3.9% to change hands at $2.21 apiece.

This comes in the wake of the ASX betting operator's annual general meeting (AGM), which was held earlier today in Melbourne.

It's worth noting that the PointsBet share price lucked out yesterday, lighting up by as much as 13% at one stage despite there being no news from the company. It ended Wednesday 3.6% higher after gaining 9.9% on Tuesday.

So, some of these fortunes could be reversing today.

What's the latest?

Unlike other companies that have provided trading updates, PointsBet's AGM was light on new information. The company will be announcing its first-quarter FY23 results on Tuesday next week, complete with an investor call.

So in the meantime, today, management's addresses largely recapped the company's FY22 results and recent operational milestones.

Across the last 12 months, PointsBet's expansion across the US has continued at pace. The company rolled out its online sports betting operations in six new US states, namely West Virginia, Virginia, New York, Pennsylvania, Louisiana, and Kansas. This takes the company's US footprint to 12 states.

According to an October report from Eilers and Krejcik, PointsBet is currently the sixth-largest online sports betting operator in the US.

Earlier this month, PointsBet announced a partnership with 1/ST Technology, a division of established thoroughbred horse racing organisation The Stronach Group.

Under the partnership, 1/ST Technology will provide horse racing betting products and content solutions integrated within the PointsBet app. What's more, the partnership will provide PointsBet with a white-label advance-deposit wagering (ADW) offering in eligible US states it doesn't already operate in.

PointsBet anticipates that this ADW solution will launch in early 2023, giving the company an online betting presence in more than 30 US states.

Where to from here?

In his address, PointsBet CEO Sam Swanell reiterated that the company's mission remains to create the best live betting experience for its North American customers. The company expects live betting to represent 75% of all turnover in the US within three years.

PointsBet has a proprietary cloud-based trading platform, Oddsfactory, which houses its pricing algorithms. This technology underpins a range of real-time wagering options for customers, such as the ability to bet on which team will score the next point.

The company's strategy is to set the foundations in place by launching Oddsfactory for the six core US sports. 

So far, PointsBet has launched NFL, NBA, college basketball and MLB. Meanwhile, NHL is set to launch in the third quarter of FY23, with college football set to go live in the following quarter.

 Commenting on the opportunity, Swanell said:

Excellence in live betting, driven by Oddsfactory, is critical to attract and retain the target client segment of our US business.

That target client bets multiple times per week, the majority of which are placed on live betting markets, and across a range of North American and international sports and they are more focused on the quality of product, features and overall speed and ease of use.

While the company's growth aspirations are in the US, it's facing heightened competition in its home market.

Last week, a new betting operator, Betr, landed on Australian shores. And with 100-1 promotional odds across a range of sports, it's clear Betr means business.

Betr is headed up by wagering mogul Matt Tripp and former BetEasy executive Andrew Menz. It's backed by an ownership group that includes News Corporation (ASX: NWS), which owns a 33% stake.

PointsBet share price snapshot

Today's slump adds to what's been a very disappointing year for the PointsBet share price. 

After closing out 2021 at $6.72, PointsBet shares have tumbled all the way down to $2.21, shedding 67%.

This gives the former ASX 200 share a market capitalisation of roughly $680 million.

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended 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 Scott Phillips.

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