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Over the next few years, PointsBet executives will closely monitor Michigan, despite being located half a world away.
There are two reasons why the Melbourne-based company has a significant agreement in the Great Lakes State of Australia.
In its collaboration with the Lac Vieux Desert Band of Lake Superior Chippewa Indians in the Upper Peninsula, PointsBet is embarking on its inaugural venture into iGaming. This partnership marks the company’s initial Native American tribal market access agreement.
During a conference call discussing the quarterly business report, PointsBet CEO Sam Swanell, hailing from Melbourne, expressed that the emergence of the US sports betting and iGaming market was an unparalleled opportunity.
Nevertheless, the ongoing shift towards online platforms due to the impact of COVID-19 is expected to present the company with a greater and accelerated potential in the US.
As Michigan residents settled into their Monday evenings, the earnings call occurred midmorning on Tuesday in Australia.
Upper Peninsula pact a first for PointsBet
Located near the Wisconsin border, the Northern Waters Casino Resort in Watersmeet is run by the Lac Vieux tribe in Michigan’s Upper Peninsula.
In December, Governor Gretchen Whitmer signed the expanded Michigan sports betting legislation, granting the tribe the opportunity to collaborate with a third party for online casino operations. This privilege is bestowed upon the tribe as one of the twelve federally recognized tribes in Michigan.
On January 6th, the Lac Vieux tribe made an early announcement, revealing their partnership with PointsBet.
The agreement will mark PointsBet’s inaugural venture into online casino gaming, alongside their mobile sports betting services and ongoing discussions to manage the Northern Waters retail sportsbook.
Despite the retail sportsbooks being launched in Detroit’s three casinos in March, the Michigan Gaming Control Board is currently in the process of drafting regulations for iGaming and online sportsbooks. These rules are anticipated to be implemented in early 2021.
Michigan key for PointsBet US expansion
Swanell mentioned that PointsBet currently possesses market access in 12 states, but several of them, including Michigan, are still facing challenges with their legislation.
As of March 5, PointsBet has expanded its online presence to New Jersey, Iowa, and Indiana.
PointsBet, a company associated with southeast Indiana’s Hollywood Casino in Lawrenceburg, which is owned by Penn National Gaming, the same owners of Detroit’s Greektown Casino-Hotel, has formed a partnership in the state of Indiana.
The timing for Michigan’s retail sportsbooks, which expedited their openings to align with the ill-fated NCAA Tournament, was equally unfortunate.
With PointsBet’s US corporate headquarters now established in Denver, the company has optimistic expectations for its American operations. Additionally, a partnership has been announced in Kansas, and upcoming launches are planned in Illinois and Colorado.
Online casino main Michigan focus for PointsBet
Swanell stated that, in Michigan, the main emphasis is on the online gaming aspect. He mentioned that a physical launch in Watersmeet would not be beneficial at the moment due to the shutdown of sports activities.
He stated that since there are currently no sports, the launch holds very little significance and they do not perceive any setback. Additionally, he mentioned that the majority, around 95% or more, of the market will only open up once it transitions to online platforms.
PointsBet’s main focus is the development of its new iGaming vertical, which is set to launch in Michigan initially, with plans to expand into other markets in the future.
Swanell emphasized the significance of having the iGaming opportunity integrated alongside sports betting. He expressed that we are effectively utilizing the ample time available to us to advance our technology and develop a go-live solution for our iGaming product.
Despite the decrease in sports activities, Swanell emphasized that PointsBet remains dedicated to its role as a sports betting company. However, he also acknowledged that venturing into the iGaming sector could present an opportunity to cross-sell to customers.
PointsBet’s aim is usually to capture a 10% market share in American states, as stated by Swanell. However, in New Jersey, the company’s reported market share stands at 5.6%.
Swanell: PointsBet ready if Michigan moves faster
Swanell recognized that the pandemic, which has compelled individuals to remain at home, has led to a desire among certain Michigan state legislators and industry advocates to expedite the regulatory processes for online gaming launches.
According to Swanell, if that occurs, PointsBet will be prepared for a faster timeline.
He stated, “We are closely monitoring the situation and believe we can go live sooner than originally scheduled. We will strive to achieve that goal.”
The CEO also mentioned that the company’s mobile launch in Colorado would be in its early stages or very close to it.
On May 1, sports gambling will be introduced in Colorado through PointsBet, one of the 17 upcoming sports betting app choices.
However, the launch of the PointsBet app on May 1 was reported to be postponed by The Denver Post.
CEO: PointsBet should bounce back stronger
Swanell pointed out that the period from April to August is typically a calm period for sports betting, with only 28% of the total annual sports betting taking place during these five months.
According to the CEO, PointsBet has the potential to recover with greater resilience, as it is less dependent on the performance of physical casinos compared to its American counterparts.
Swanell mentioned that many of them are approaching the walls with a sincere sense of urgency. The business has shifted its focus, emphasizing the need for caution while also being prepared to take action.
We genuinely believe that once the market fully recovers in the US, we will return in a more robust position than before.
Profound losses for Michigan Native American tribes
The shutdown has caused distress among various UP tribes, including the Lac Vieux.
On Monday, a report by Bridge Magazine, a nonprofit news organization in Michigan, provided a comprehensive account of the consequences faced by the state’s tribes due to the closure of casinos.
Although the tribes are not obligated to reveal internal budgetary specifics, there is a deep sense of anguish.
According to Frank Ettawageshik, the executive director of the United Tribes of Michigan, gaming contributions typically make up approximately 50% of the government budgets for tribes in Michigan, as he informed Bridge.
This implies significant reductions in tribal services overall, encompassing health care, education, housing, courts, fire services, and police.
Through their agreements with the state, Michigan’s tribes also make contributions to non-tribal communities at the local level.
In 2019, the revenue sharing from Michigan tribal casinos amounted to over $30 million for local governments and over $54 million for the state, as reported in the annual report by the state’s gaming board.
Following a series of delays since its closure in mid-March, Northern Waters has recently announced that it will not be reopening as originally planned on May 1.
Horse racing helps PointsBet handle COVID shutdown
Even though the coronavirus pandemic has caused the shutdown of global sports, PointsBet has managed to report encouraging numbers and optimistic projections for the future.
In addition, Swanell mentioned that due to the shutdown, 20 US employees who were undergoing training, working in client services, and marketing have been placed on furlough.
Despite numerous sports shutting down during this time, the company achieved a remarkable net win growth of 89.8% in its Australian market compared to the corresponding quarter last year. Furthermore, March proved to be a record-breaking month for the company in terms of net win.
Swanell attributed a significant portion of the increase to bettors transitioning to horse racing, which is a more lucrative market for PointsBet.
Sportsbooks in Michigan do not provide horse racing betting options.
Nevertheless, Northville Downs, the only active racing track in the state, was given permission to collaborate with a third-party for advance deposit wagering under the expanded gaming laws.
Variable ‘PointsBetting’ unique option for bettors
Once PointsBet is launched in Michigan, its app will introduce a distinctive approach to mobile sports betting.
“PointsBetting” not only includes traditional fixed markets but also introduces variable bets, where the amount won or lost depends on the margin of the bet’s outcome.
In addition to its competitors, the company prides itself on offering a wider range of prop bets. These include unique markets like bets on quarterback completion percentage in football and the timing of a first basket by a specific player in basketball.
