PointsBet struggles with costs in surging sports betting market

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PointsBet struggles with costs in surging sports betting market
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The fight to secure betting customers across a never-ending stream of betting apps is heating up, with ASX-listed PointsBet fighting for market share in the juicy American market.

The fight to secure betting customers across a never-ending stream of betting apps is heating up, with PointsBet fighting for market share in the juicy American market while juggling eye-watering customer acquisition costs.

But while the US market is the juiciest prize for online gambling companies, with Bell Potter estimating it will be worth $8 billion and $10 billion in 2025, PointsBet has proven it can operate a sustainable and profitable gambling business in Australia. Here, it enjoys a 5 per cent market share.In FY22, it generated net revenue of just under $200 million from an active client base of about 240,000 Australian customers.

PointsBet has secured an average market share of 3.7 per cent in the United States, with gross win margins at around 6.5 per cent. DraftKings and FanDuel are booking gross win margins of around 10 per cent.Marketing is the main game in online gambling companies that are fighting for fresh eyeballs to turbocharge their “total net win” metrics. Total net win refers to the profits made from customers’ losing bets minus money paid out to customers with winning bets.

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