Since appointing Scott Vanderwel as chief executive officer and establishing an office in Toronto last summer, PointsBet Canada’s quest to become a major operator in the province has been contingent on its campaign to become “authentically Canadian.”
One of the first operators to go live in the early morning hours of April 4, and also one of the first operators to become licensed with the Alcohol and Gaming Commission, PointsBet Canada has been busy inking strategic Canadian partnerships, most notably with the Trailer Park Boys, Maple Leaf Sports & Entertainment — which owns the majority of the major professional sports franchises in Ontario, including the Toronto Maple Leafs, Toronto Raptors, Toronto Argonauts, and Toronto FC — and the CFL’s Ottawa Redblacks, among others.
PointsBet now has 53 Canadian employees, only a handful of whom had live gaming work experience before this launch. The team is learning in real time, but the early returns on the locally hired talent has been outstanding, according to PointsBet Canada Chief Commercial Officer Nic Sulsky.
“We have a team full of people who aren’t located offshore, who aren’t located in the U.S., who haven’t had years of live betting experience dealing with marketing issues, payment issues, KYC issues. Our team is all dealing with that in real time. I am so impressed and proud of how they kept their adrenaline in check, kept focused, and they haven’t literally fallen off their chairs,” he said.
Exceeding early expectations
PointsBet Canada started in Ontario without an existing user database, unlike some of the gray operators and existing daily fantasy sports/poker operators that have been doing business in the province and across Canada for many years. From a user perspective, several key betting metrics such as average first time deposit, average first time bet, and active bet count are higher at the sportsbook than PointsBet Canada thought they’d be to this point.
“We’re pretty ecstatic about how things have been going,” Sulsky said.
Sulsky believes these early metrics are encouraging and that the data suggests these bettors will stick with the sportsbook over the coming months and years. He notes the Ontario market is already full of mature sports bettors, and he believes they will find PointsBet to have a high-quality product. Customized Canadian and Ontario markets, as well as easy deposits and withdrawals, could entice new sports bettors to also give PointsBet’s product a shot.
“We know that the Ontario sports fan is going to lean heavily into Ontario teams,” Sulsky said. “This market will truly be a marathon, not a sprint.”
Several operators, such as BetRivers and PROLINE +, have reported Ontario bettors having major interest in basketball in the early days of the regulated market. Sulsky says hoops are a very popular market at PointsBet, too.
— gregwarrenBC (@GregwarrenBC) April 12, 2022
“Basketball from a sports betting perspective in North America is massive,” he said. “We are the only operator in North America that has live in-game parlay for basketball. We have a product that nobody else has. What we’re seeing is that a lot of the basketball gamblers are out there dabbling with other operators, and then when they realize that we have live same-game parlay for NBA games, they’re like, ‘Man, that’s cool.'”
Ontario bettors are also wagering big on hockey across the board, but especially on the local teams, like the Maple Leafs. Baseball and tennis markets have been thriving, as well.
A plan to disclose official revenue numbers generated by operators in the province is still in the works, according to iGaming Ontario. But data from Morgan Stanley, an American multinational investment bank, has been tracking the number of sportsbook app downloads in the province since April 4. The early numbers suggest theScore Bet and Bet365 have combined to account for nearly two-thirds of the downloads, but those numbers appear to be leveling off as time progresses.
“Our trends are going up,” Sulsky said. “To get between 5 and 8 percent on the Morgan Stanley app download data suggests our entrance strategy is working. We have a lot of work to do to introduce our brand to the Canadian consumer.”
Reaction to fines
The regulator noted that, during the period of April 4-21, PointsBet Canada placed posters “with an inducement to play for free” on the Toronto area’s GO Transit trains, train stations, “and in multiple products.” The result was a $30,000 (CAD) fine for violating Standard 2.05.
The law firm of Dickinson Wright chimed in on the regulator’s decision with the following statement:
While Standard 2.05 does not prohibit the use of inducements, bonuses, or credits, it does limit the ways that Operators can promote them. As opposed to other jurisdictions, Ontario is one of the only jurisdictions in the world to prohibit broad public advertising of bonuses and other gambling inducements.
AGCO’s message here is clear: tweets are just as much a form of advertising as anything else and must be compliant with the standards. Likewise, these two penalties serve as a reminder to all Operators that marketing materials that might work in other jurisdictions might not work in Ontario.
CEO Vanderwel issued a public apology on behalf of PointsBet Canada after the regulator’s decision and said the company prides itself on its “reputation as a compliant operator.”
The AGCO made it very clear it won’t be an approval body for operator advertising in Ontario, and that It’s up to every operator to individually interpret the regulator’s standards.
The language used in PointsBet’s ads in question simply stated “sign up and play free,” Sulsky said.
“Free-to-play at Bet99.net and all these other free-to-play sites are out there pushing free-to-play. In our opinion, saying ‘sign up and play free’ isn’t technically a gambling inducement. Because when you’re playing for free, which you can do on PointsBet, you’re not gambling anything. To gamble means you have to risk something of your own. If free-to-play is OK, then ‘play free’ should be OK. Well, the AGCO let us know that they weren’t comfortable with that language,” he explained.
In reality, the advertising violation cost PointsBet much more than the $30,000 fine from the AGCO. It was a challenge to remove the ads from Toronto’s major transit hub at Union Station and GO Transit’s constantly moving fleet of trains and buses. PointsBet simply couldn’t go in and physically remove the thousands of pieces of collateral due to the unionized environment and protocols at GO Transit.
“We thought we were okay, and when we found out we weren’t, we worked as diligently as we could to remediate,” Sulsky explained.
AGCO issues monetary penalties to BetMGM Canada and PointsBet Canada for alleged advertising and inducement infractions. https://t.co/ydw1H7cD1R
— AGCO (@Ont_AGCO) May 3, 2022
Sulsky is optimistic about the company’s immediate and long-term plans after becoming a partner with MLSE.
He said PointsBet doesn’t have deep pocketbooks like some of the other major operators, and he didn’t think a MLSE partnership was possible when initially developing their Canadian core strategy. The company’s focus was initially on becoming a challenger brand in Ontario, but things changed quickly in early April.
“It was one of the fastest deals I’ve ever been a part of,” Sulsky said. “As time progressed, the opportunity to partner with MLSE opened up again. And once it did, we had many, many conversations. I’ve known the fine folks over there for a while. We started realizing that we really complemented each other’s vision of what we wanted to accomplish in the market, which is to really innovate and push the envelope of what engaging sports fans could mean.”
The Argonauts are just one of the aforementioned teams owned by MLSE, and when combined with a separate deal with the Redblacks, PointsBet is now aligned with two of the three CFL franchises in Ontario. Sulsky sees major opportunities to grow football betting in Canada this summer and beyond, especially after the CFL’s recent deal with Genius Sports.
PointsBet is also planning to roll out its “Lightning Bets” markets for baseball this summer. Bettors will soon have the ability to wager on an extreme in-game micro level, including on whether or not the next pitch will be a ball or a strike, fouled off, or put in play.
And if there’s ever a market a bettor doesn’t see posted, PointsBet’s “Name a Bet” feature allows users to request a custom market. PointsBet will grade it, and post it, for everyone to bet on.
“No other operator really focuses on that,” Sulsky proudly said.
As of Friday morning, there are now 22 live iGaming sites in Ontario. Many more operators are expected to go live in the market in the coming weeks and months including DraftKings, Betway, Pinnacle, and BetRegal.