Australian sports betting operator PointsBet is poised to launch its sports betting in the state of Illinois, as the company continues its dramatic rise in the US sports betting sector.
Earlier this year, PointsBet landed its first major media sponsorship deal with broadcasting giant NBC, having already set up sports betting operations in three states, but their new presence in Chicago could be their most significant move yet.
The company has taken a strategic approach to its launch in the state, having already partnered with four in-person betting venues. PointsBet has a presence at the Hawthorne racetrack, along with three Off-Track Betting (OTB) venues in the state. Illinois currently requires new sports betting customers to register in-person when they open a new account, which the company’s CEO Johnny Aitken says is the perfect scenario for PointsBet, given their locations:
The cloud on that particular horizon is the prospect of remote sign-up. According to the rules of the Illinois sports betting market, in-person sign-up is supposed to be the default for the first eighteen months of legal sports betting in the state. But twice earlier this year, the state governor, JB Pritzker, has allowed periods of remote sign-up, which serve to negate PointsBet’s advantage.
Backed by their deal with NBC, PointsBet is confident of handling any development as they bid to expand their presence in the fast-growing US market. The numbers involved are remarkable, considering that the company had a turnover of around $5 million for the last fiscal year.
Their five-year contract with NBC includes $393 million worth of marketing spends at NBC properties. But while that seems like a huge figure, according to Aitken, it isn’t a burden. Addressing the details of the deal, Aitken said that the money would have been committed to television or digital advertising spend, even without the NBC deal and doesn’t represent even 50% of what the ambitious company was planning to invest in its marketing and branding push in the US.
The cash for this investment is set to come from a variety of sources. The company plans to raise as much as $220 million from institutional and retail stock offers, and there is the prospect of more money from NBC. The broadcaster took a 4.9% share in PointsBet as part of the original deal and has the option of buying another 67 million shares at the five-year mark.
The marketing strategy in Illinois has differed significantly from that employed in New Jersey, underlining the complexity of the state-led US sports betting market.
The Garden State lacks its own television market, so residents of New Jersey see television ads that are targeted at the Philadelphia or New York areas. So, according to Aitken, PointsBet had to use different methods to promote its sports betting service, relying on ‘organic’ marketing and offering a distinctive product. The push seems to have worked. By the end of August, PointsBet had over 26,000 active customers in the US, a large proportion of whom was in New Jersey.