PointsBet Plans iGaming Debut For Momentous Michigan Launch

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Over the next few years, PointsBet executives will closely monitor Michigan, even from a distance of half the world.

The company based in Melbourne, Australia, has established a significant agreement in the Great Lakes State for two specific reasons.

The Lac Vieux Desert Band of Lake Superior Chippewa Indians in the Upper Peninsula has become PointsBet’s first Native American tribal market access partner, marking the company’s entry into iGaming.

During a conference call discussing the quarterly business report, PointsBet CEO Sam Swanell, hailing from Melbourne, expressed that the inauguration of the US sports betting and iGaming market was an exceptional opportunity that occurs once in a lifetime.

Nevertheless, the ongoing trend of transitioning to an online setting due to the impact of COVID-19 is expected to present the company with a significantly greater and accelerated prospect in the United States.

As Michigan residents settled into their Monday evenings, the earnings call occurred in Australia during midmorning on Tuesday.

Upper Peninsula pact a first for PointsBet

Located near the Wisconsin border, in Watersmeet, Michigan’s Upper Peninsula, you will find the Northern Waters Casino Resort, which is operated by the Lac Vieux tribe.

In accordance with the recently expanded Michigan sports betting legislation, signed by Governor Gretchen Whitmer in December, the tribe, being one of the 12 federally recognized tribes in Michigan, possesses the authority to collaborate with a third party for the purpose of conducting online casino operations.

On January 6th, the Lac Vieux tribe declared the initiation of a partnership with PointsBet, making them one of the pioneers in this endeavor.

The agreement will mark PointsBet’s debut in the online casino realm, alongside their existing mobile sports betting and ongoing talks to run the Northern Waters retail sportsbook.

Despite the opening of retail sportsbooks in Detroit’s three casinos in March, the Michigan Gaming Control Board is currently in the process of drafting rules for iGaming and online sportsbooks. These regulations are anticipated to be implemented in early 2021.

Michigan key for PointsBet US expansion

Swanell mentioned that PointsBet currently holds market access in 12 states, with some states, such as Michigan, still facing challenges in their legislative processes.

Starting from March 5, PointsBet has launched its online platform in New Jersey, Iowa, and Indiana.

PointsBet has formed a partnership with Hollywood Casino in Lawrenceburg, which is located in southeast Indiana and is owned by Penn National Gaming. It is worth noting that Penn National Gaming also owns Detroit’s Greektown Casino-Hotel.

Michigan’s retail sportsbooks, like the NCAA Tournament, unfortunately chose a similar ill-fated timing for their fast-tracked openings.

PointsBet has opened a US corporate headquarters in Denver and is optimistic about its American operations. Additionally, they have announced a partnership in Kansas and are planning launches in Illinois and Colorado.

Online casino main Michigan focus for PointsBet

Swanell emphasized that in Michigan, the primary emphasis is on the online gaming sector. He pointed out that a retail launch in Watersmeet wouldn’t be beneficial considering the current shutdown of sports activities.

He stated that since there are currently no sports, the launch holds little significance and they don’t perceive any setback. Additionally, until online becomes available, that is when the majority (95% or more) of the market will become accessible.

PointsBet’s main focus is on its upcoming iGaming vertical, which is currently being developed for a grand debut in Michigan. The company is optimistic about expanding into other markets in the future.

Swanell expressed the significance of having the iGaming opportunity alongside sports betting. He mentioned that they are effectively utilizing the ample time at hand to advance their technology and develop a go-live solution for their iGaming product.

Despite the slowdown in sports, Swanell emphasized that PointsBet remains dedicated to being a sports betting company. However, he also mentioned that the iGaming sector presents a potential chance to cross-sell customers.

According to Swanell, PointsBet aims to capture a 10% market share in American states. However, in New Jersey, the company’s reported market share stands at 5.6%.

Swanell: PointsBet ready if Michigan moves faster

Swanell recognized that due to the pandemic’s impact on people staying at home, there is a desire among certain Michigan state legislators and industry advocates to expedite regulatory processes for online gaming launches.

Swanell stated that if that occurs, PointsBet will be prepared for an expedited timeline.

He mentioned that they were closely monitoring the situation and believed they could go live earlier than originally scheduled. They expressed their commitment to working towards achieving that goal.

The CEO also emphasized that the company would be in a position to launch its mobile services in Colorado, either already at the starting line or very close to it.

On May 1, Colorado will be launching sports gambling with PointsBet as one of the 17 upcoming sports betting app choices.

However, the Denver Post revealed that the PointsBet app was not scheduled to be launched on May 1.

CEO: PointsBet should bounce back stronger

According to Swanell, the months from April to August are typically a calm period for sports betting. He pointed out that only 28% of the total annual sports betting activity takes place within these five months.

The CEO expressed that PointsBet, unlike certain American competitors, has a lower dependency on the success of physical casinos, and therefore has the potential to recover even more robustly.

Swanell explained that many of them are taking the walls very seriously, emphasizing the importance of a different approach for the business. While it is crucial to exercise caution, they also need to remain prepared and proactive.

We genuinely have faith that once the market fully recovers in the US, we will come back in a more robust position than we were before.

Profound losses for Michigan Native American tribes

The UP tribes, including the Lac Vieux tribe, are among the groups experiencing the negative impacts of the shutdown.

On Monday, a report by Bridge Magazine, a nonprofit news organization based in Michigan, provided a comprehensive analysis of the consequences faced by the state’s tribes due to the closure of casinos.

While the tribes are not obliged to reveal the internal budget specifics, there exists 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 impacts on tribal services in various sectors, such as healthcare, education, housing, courts, fire services, and police.

Through their agreements with the state, Michigan’s tribes also make significant contributions to non-tribal communities at the local level.

In 2019, Michigan tribal casinos made significant contributions to local governments and the state, as stated in the annual report by the state’s gaming board. The report reveals that these casinos contributed over $30 million to local governments and more than $54 million to the state through revenue sharing.

In the latest of a series of delays, Northern Waters has announced that it will not be reopening on May 1 as previously scheduled. The facility has remained closed since mid-March.

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Horse racing helps PointsBet handle COVID shutdown

PointsBet reported encouraging numbers and optimistic projections despite the widespread shutdown of global sports caused by the coronavirus pandemic.

In addition, Swanell mentioned that due to the shutdown, 20 US employees undergoing training, client services, and marketing roles have also been placed on furlough.

Despite the shutdown of numerous sports during this period, the company achieved an impressive 89.8% growth in net win for its Australian market when compared to the same quarter last year. Moreover, March marked a record-breaking net win for the company.

Swanell attributed a significant portion of the increase to the fact that bettors were shifting their focus to horse racing, which is a market with higher profit margins 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 under the expanded gaming laws to collaborate with a third-party for advance deposit wagering.

Variable ‘PointsBetting’ unique option for bettors

Once PointsBet is launched in Michigan, the app will provide a distinctive twist to mobile sports betting.

Besides conventional fixed markets, “PointsBetting” introduces flexible bets that determine the amount of winnings or losses based on the margin of the bet’s outcome.

In addition, the company offers a wider range of prop bets compared to its competitors. These include unique markets like bets on quarterback completion percentages in football and the specific timing of a first basket made by a particular player in basketball.

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