If you didn’t know about PointsBet Sportsbook last year, you probably do now.
Headquartered in Australia, the sportsbook launched only seven months ago in New Jersey in conjunction with the Meadowlands Racetrack, and since has forged partnerships to several more newly legal U.S. jurisdictions, keeping pace with or outstripping some more established U.S. brands, at least in terms of footprint.
Currently, PointsBet is prepping to launch a retail sportsbook (and later online) in Iowa, plus major regional casino operator Penn National Gaming hooked up with the bookmaker as part of an expansive access agreement that (probably) will put PointsBet in several states expected to legalize in the not-too-distant future, such as Ohio.
For details on how PointsBet has made such rapid progress, how its product is unique, its apparent invitation for sharp action and much more, Sports Handle spoke with PointsBet’s Chief Innovation Officer, Seth Young, who joined the company in November 2018. Young was previously the Executive Director of online gaming at Foxwoods Resort Casino (2016-18) and Vice President and CEO of Flower City Gaming (2013-16). In 2018, Young won the Innovation Group’s Emerging Leaders of Gaming Award and was named to Global Gaming Business Magazine’s 40 Under 40 list in 2018.
(This interview has been lightly edited for brevity and clarity.)
PointsBet Sportsbook from Down Under taking U.S. by storm
Are you ready Iowa⁉️
— PointsBet Sportsbook (@PointsBetUSA) August 19, 2019
Sports Handle (SH): PointsBet has now struck partnerships that will bring it to Iowa, Indiana, Illinois, pretty much every new or soon-to-launch U.S. market, and now the access agreement/partnership with Penn National opens the door further. How have you guys pulled off this kind of footprint in such a short period of time?
Seth Young (SY): Yes, an excellent accomplishment, and I’m also sure this is the part that everyone is here to read. It’s a testament to every single person at PointsBet, a testament to the vision of PointsBet’s founders, and a testament to the company’s savvy investors. It’s fantastic to celebrate the fact that with these agreements PointsBet should have the opportunity to compete on a grand scale here in the USA. The work will never be done, but we recognize that we have hit some significant milestones in a relatively short amount of time. There are only a handful of operators that have been able to do so, and we recognize that we are privileged to be in this position.
There is no single thing that led to any of these agreements, but rather a track record of consistency in execution built on strong core fundamentals that were immediately recognized by the forward-thinking groups that chose to partner with us. Modern, in-house technology, expertise on US sports – coming from an Australian market where, shockingly, over 40% percent of total sports betting activity is on US sports, differentiated product with our pointsbetting (a form of “index” betting) platform that sits alongside our traditional sports betting platform, and a pure focus on the US market. Being a newer company in the global betting market may be seen as a double-edged sword, but one of the benefits is that PointsBet isn’t concerned with the operational headwinds and business pressures that some other operators are facing due to changing market factors in places like the UK or Italy, for example. I think it’s fair to say that PointsBet’s singular focus on the US market is attractive to partners that want to know the company they choose to align with is striving to be great, not simply good enough.
When I was working at Foxwoods [Foxwoods Resort Casino in Mashantucket, CT] I wrote up the RFP for sports betting and put it out into the world well in advance of PASPA’s repeal. PointsBet responded immediately, and the only things I could think were, one, this is the most interesting company that I have never heard of, and two, how could this company I’ve never heard of be so prepared? I couldn’t shake the thought that if even half of what they included in that pitch was true, the founders had figured out the perfect way to tailor the business and all of its related components specifically for a US entry, based on how the market was projected to unfold. This company was educated, they had it together, and they just needed the chance to prove it.
SH: What have you guys learned in the New Jersey market so far that you think will translate well in other states?
SY: New Jersey has been a great learning experience for our team as it was the first jurisdiction PointsBet launched operations in outside of Australia. Just days after we formally launched, we were able to debut our Karma Kommittee and Good Karma Payouts after the botched pass interference call in the Saints/Rams playoff game, which helped set the stage for how we wanted to operate in the US. We struck a partnership in New Jersey with TopGolf, signed brand ambassadors Allen Iverson and Darrelle Revis – two iconic athletes – and we got to work. We had no preexisting database to leverage and no brand awareness to speak of; just a slick product that we could control, and an experienced team. Hard work, focus, and excellence in technology are translatable from place to place.
SH: What kind of engagement have you guys seen so far for pointsbetting (editor’s note: a kind of “index” betting)? Do you see that as a major driver of handle/interest in the next few years, or is it still in the backseat to traditional fixed odds pre-game and in-game wagering?
SY: If you’ve tried pointsbetting, you know that it’s edge-of-your-seat stuff. As more people get to know PointsBet and as we expand to offer our sportsbook in new states, we fully expect pointsbetting to continue to be a key part of our product. Our clients in New Jersey love it.
Think about it this way: Fantasy sports has been popular in the USA for a long time, and – from an engagement perspective – pointsbetting is everything daily fantasy sports wants to be. More often than not, the average person making a daily fantasy bet hits a point where they know they don’t have a chance at winning anymore. It’s the polar opposite for pointsbetting. Every point matters, every second counts, and you’re cheering on your bet until the very last whistle blows. It is the crème de la crème for sports betting entertainment. Will it overtake traditional sports betting and in-play? I don’t know, but I’m glad to say that we’re the only group that offers pointsbetting in the US and Australia alongside the traditional and in-play, so I suppose we’ll find out.
SH: The outcomes for PointsBets can be, inherently, pretty volatile. Don’t you think there’s a risk in getting a new player to try it, quickly busting a bankroll, and getting turned away?
SY: We have plenty of measures in place to make the introduction to pointsbetting extremely easy, and in the spirit of fairness, the risk of a first-time client losing and leaving exists with every betting product in the market. It’s the nature of making a bet; poker, casino, daily fantasy, horse racing, traditional sports betting … you can win, you can lose, that’s gambling. Ask 10 people betting on something with their money if they’d rather win or lose and you’ll get 10 people looking at you like you have three heads. In truth, though, as long as you’re having fun within limits that you’re comfortable with, winning and losing for the 99 percent of people that aren’t reliant on gambling for a living should never be a life-changing proposition. Those limits are different for everybody, and at the end of the day the pointsbetting experience is, in a word, fun.
For our part, we have worked with our brand ambassador Darrelle Revis to develop the “Darrelle Revis Betting Academy,” a series of educational videos that teaches new bettors how to bet on sports, including pointsbetting. Further, you can set your risk limits each time you make a pointsbet to decrease the volatility to within limits that fit your personal comfort level. If that’s not enough, PointsBet also offers risk-free bets to new clients that can be used for pointsbetting, so you can quite literally try it for the first time with no downside. If that’s not enough, we also offer an incredible amount of different markets that you can pointsbet on, so it’s pretty straightforward to pick a bet that you’re comfortable with and go with it.
SH: How do you think in-game wagering on popular international betting sports (soccer, tennis) is different from in-game wagering for some different major US sports (football, baseball), if at all?
SY: American sports are heavily stats based, and the sports typically move a little bit faster than soccer. This faster pace is complemented by a faster pace of in-play betting action, which is exciting for the bettor. I think in-play wagering on American sports is a more robust experience for the client than betting on soccer, though in-play wagering on tennis, for example, is relatively fast paced. On the operating side, this speaks to the importance of a strong trading and analytics team backed by strong technology, since the pace of betting can be a bit more rapid fire.
I’ve heard some industry analysts suggest that in-play wagering will have a slower ramp in the USA than overseas, but I’m not sure that I agree with that. In-play products are fairly intuitive, and black-market sports betting has been enjoyed by many Americans for the last few decades, so I think we’ll start getting some great data here out of the newly regulated market. Basically, I think the percentage of in-play wagers versus pre-match wagers will mirror or exceed the type of volume we see overseas in a relatively short amount of time, and I think the pace of American sports will create higher overall turnover, lower overall margin, and a prolonged client lifetime. Time will tell.
SH: PointsBet has billed itself as a book willing to book “sharp action,” in part through the minimum bet-to-win amount of $10K from any customer. Some books operating in the US have been labeled as unfriendly to sharp bettors, and/or quick to refuse wagers from winning bettors, perhaps wanting only recreational players. How do you project PointsBet’s strategy working out over the long term?
SY: The first step for a sports betting company to make any money is to raise its hand to people that want to bet on sports and say, “We see you want to bet on sports. We’ll take your bets.” The second step is to try to beat the crowd that’s trying to beat you. It’s a big, fun game; the books try to win, the clients try to win, and the best player wins.
Typically – and this is a generalization – sharp bettors will be very good at betting one sport. Bookmakers must be good at betting every sport. It’s not probable for a generalist – even a strong one – to be better than a strong, single-sport specialist in the long run. So, if we have a sharp client ready to book maximum action on a certain line we have put out, we might concede that bet to lose $10k, and take the learnings to try to make $20k. Whether it’s that day, the next day, the next week, the next month, it’s fine. It doesn’t take a long time to figure out what kind of bettor someone is, so we can proceed in a way that’s comfortable to us. It’s really that straightforward.
Besides running the US business, our US CEO Johnny Aitken is one of these sharp clients. Sports betting is in his blood, and he has relationships with the professional bettors that frequent our shop. Sometimes they win, sometimes they don’t, and we put out this promotion because whichever way the bet breaks, we find value in accepting it. Tens of thousands of people come through the virtual doors of sportsbooks every day to try to beat the bookie. Bookies take bets because they think they have an edge. Clients make bets because they think they have an edge. You can call taking “sharp action” a strategy, I suppose we’d call it a normal day. We put out lines so we can take bets. Fair is fair.
SH: What do you think PointsBet does better than most (or all) of its competitors? Whether it pertains to user experience or props/markets offered or otherwise?
SY: I’ll answer this question two ways. Firstly, I’ll say that PointsBet owns and controls its technology in-house, manages its own trading and risk in-house, and doesn’t have third party technical or risk management dependencies for its online sportsbook. I’d think if you’re outsourcing core functions of being a bookmaker, you’re conceding that there are others that can operate core functions of the business you’re in better than you can yourself.
I’m not saying there’s anything wrong with that – outsourcing occurs for plenty of reasons – but what I am saying is that I think it shines a spotlight on PointsBet’s pure focus on the US market, its robust operational capabilities, its confidence in a very experienced management team, and its ability to execute with precision. PointsBet made a sizable early investment into positioning its product to gain economies of scale and efficiencies as it enters new markets, while many large, international operations have been working for years to try and reach the point, technically, that PointsBet started from.
Secondly, PointsBet’s sports betting client is excellent. We have a traditional sportsbook complemented by our proprietary pointsbetting platform that allows us to create more unique ways to bet on American sports than any bookmaker on Earth, and that’s not an exaggeration. The user interface has been heralded as one of the sleekest, most intuitive products in the US market, and we have complemented that with highly innovative, market-leading promotions. Soup to nuts we feel great about what we’re putting out in the world, and we’re always working to make things even more exciting.