2 ASX gambling shares surging on strong quarterly updates

Investors are bidding up both ASX gambling stocks today. But why?

Two ASX gambling shares are setting the bar high today.

In morning trade on Wednesday, the All Ordinaries Index (ASX: XAO) is up a healthy 0.6%.

As for the ASX gambling shares, the Bluebet Holdings Ltd (ASX: BBT) share price is up 2.4% at the time of writing at 22 cents a share.

Meanwhile, Pointsbet Holdings Ltd (ASX: PBH) shares have rocketed 8.2% to 53 cents apiece.

This comes on the heels of both companies' quarterly updates.

Here are the highlights.

Sports fans looking at smart phone representing surging pointsbet share price

Image source: Getty Images

ASX gambling share lifts on record turnover

Turning to Bluebet first, investors are bidding up the ASX gambling share after the company reported on its transformational merger with betr, which was completed on 1 July.

Bluebet said the merger has created a profitable, leading Australian wagering operator, with the realisation of $14 million in annual cost synergies on track. The remainder will be delivered on completion of customer migration onto the Bluebet platform by September.

The company's balance sheet was also aided following on the successful completion of $20.0 million placement.

Also likely stoking investor interest in the ASX gambling share, Bluebet reported record quarterly turnover of $162.5 million and a 14% increase in active customers to 76,300. The company also achieved a record net win of $17.7 million and a net win margin of 10.9%.

Bluebet CEO Andrew Menz said:

By combining Bluebet's best-in-class technology platform with betr's large and high-quality customer base, as well as our experienced and talented teams, we are creating a profitable, leading player in the Australian online wagering market.

Bluebet COO Bill Richmond added, "In the US, we continue to scale and enhance our global platform and have commenced the strategic review of that business where we expect the outcome to be announced ahead of our FY 2024 annual results."

The Bluebet share price is up 8% in 2024.

Which brings us to…

Pointsbet share price surges on improved earnings results

The Pointsbet share price is leaping higher today after the ASX gambling share announced an "outstanding finish" to FY 2024.

That strong finish included a normalised FY 2024 earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of $1.8 million. While that's still a loss, Pointsbet's guidance for FY 2024 had been for an EBITDA loss of $4 million to $6 million.

Management highlighted that this represents a massive $47.2 million improvement on the normalised EBITDA loss of $49.0 million that the ASX gambling share reported in FY 2023.

The company's net win of $68.4 million for Q4 was also up 12% year on year. And the FY 2024 net win of $267.1 million is up 16% from the prior year.

Also likely spurring investor interest, Pointsbet achieved a record quarterly net cash flow of $7.1 million.

Following on the return of $442.4 million to shareholders, the company had $28.1 million in cash at the end of June.

Management said Pointsbet is "well capitalised to invest for further growth and executing ongoing operational and strategic plans".

The Pointsbet share price remains down 40% year to date.

Motley Fool contributor Bernd Struben 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. The Motley Fool Australia has no position in any of the stocks mentioned. 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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