ASX Watch: Newcomer PointsBet Storms Out of the Gate


Time to pay attention!

Online Aussie sports betting has another player coming to tackle the biggest bookies in the industry.

Yep, PointsBet Holdings Limited [ASX:PBH] is Australia’s latest publicly listed gambling company.

And this corporate bookmaker is looking to disrupt the traditional fixed-odds betting market.

PointsBet is Australia’s fastest growing online bookmaker. That creates a potentially huge opportunity for you as an investor.

Let’s find out who PointsBet is and what it does…

The ASX’s next big growth play?

PointsBet is a corporate bookmaker operating within Australia and the US state of New Jersey.

It built its platform to ensure that all its systems and services were interconnected and accessible anywhere in the world.

That’s right. You can bet 24/7. That includes college leagues in the US…if that is your thing, of course!

Already, PointsBet has obtained over 45,000 clients, with over $300 million in payouts in 2018.

What makes this mob unique?

It is first in the world with what’s called points betting (hence the company name…).

Points betting is a wagering system where your outcome isn’t determined until the clock hits zero.

In other words, your profits and losses are not determined until the end of the game.

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And your wins or losses are calculated based on how right or wrong you were.

Oh, and if you ever feel like you’ve run out of luck, just set a stop loss.

Talk about upping the odds!

Unfortunately for investors (and punters), sports-related points betting is only available for US sport at present. This includes the NBA, NFL and MLB. That’s basketball, American football and baseball for the uninitiated.

Now, you might not have known this, but the US Supreme Court ended a 26-year ban on sports betting this time last year. Now the US sports betting market is an open platter for bookies and gamblers.

That’s a huge market…

The Australian gambling market is roughly US$7 billion per year.

In contrast, the American market is worth an estimated US$150-500 billion. We’re talking about an industry that is over 70 times bigger than it is here in Australia.

PointsBet may just become bigger than Aristocrat Leisure [ASX:ALL], an Australian gambling machine manufacturer.

Who knows for sure? Not me.

But I do know that since 2011, ALL is up over 1,500%. People really love to punt, don’t they?

But there’s no guarantees here, either…

Let’s dig a little deeper into PointsBet…

 Keep this one on your watch list…

PointsBet Holdings Limited officially went public on 12 June 2019.

During the IPO, PBH raised over $75 million, with 37.5 million shares issued at a price of $2.00 per share.

This deal would have put PointsBet at around eight times its 2018 calendar year revenue.

PointsBet is not yet profitable. So, this is a growth story and not for conservative investors to consider. 

But it’s one to keep an eye on if you’re more aggressive.

What is PBH planning to do with the $75 million it raised through its IPO?

According to PointsBet, the immediate priorities are as follows:

  1. Marketing and client acquisition
  2. Technology and platform development
  3. US business development

It’s hard not to see massive potential for growth here.

This could be an enormous opportunity for early investors.

I suggest giving the stock some time to settle on the market and seeing how things go for a quarter or two.

This article is not a recommendation to buy or sell PBH. It’s an update only.

I hope you found it helpful.

Until next time,

Jim Rickards Signature

Jonathan Evans,
Analyst, Profit Watch

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