PointsBet Plans iGaming Debut For Momentous Michigan Launch

Written By Matt Schoch on April 28, 2020Last Updated on December 13, 2021
PointsBet Michigan

From half a world away, PointsBet executives will keep a close eye on Michigan over the next few years.

The Melbourne, Australia, company has a landmark pact in the Great Lakes State for two reasons.

PointsBet is launching its first foray into iGaming as part of its deal with the Lac Vieux Desert Band of Lake Superior Chippewa Indians in the Upper Peninsula. That partnership is the company’s first Native American tribal market access deal.

“The opening of the US sports betting and iGaming market was already a once-in-a-lifetime opportunity,” said PointsBet CEO Sam Swanell, of Melbourne, this week on a conference call detailing the quarterly business report.

“However, the trending continued behaviors of moving to an online environment as a result of COVID-19 … will likely create an even larger and expediated opportunity for the company in the US.”

The earnings call took place midmorning Tuesday in Australia while Michigan residents settled into their Monday evenings.

Upper Peninsula pact a first for PointsBet

The Lac Vieux tribe in Michigan’s Upper Peninsula operates Northern Waters Casino Resort in Watersmeet, near the Wisconsin border.

As one of 12 federally recognized tribes in Michigan, the tribe is allowed to partner with a third party for online casino operations, per expended Michigan sports betting legislation signed by Gov. Gretchen Whitmer in December.

The Lac Vieux tribe was one of the first to announce such a partnership, announcing its deal with PointsBet on Jan. 6.

In addition to mobile sports betting and negotiations to operate the Northern Waters retail sportsbook, the deal will be PointsBet’s first online casino offering anywhere.

Though retail sportsbooks opened in Detroit’s three casinos in March, rules for iGaming and online sportsbooks are still being drafted by the Michigan Gaming Control Board with implementation expected in early 2021.

Michigan key for PointsBet US expansion

Swanell said PointsBet now has market access in 12 states with many, like Michigan, still grappling legislative hurdles.

PointsBet is online in New Jersey, Iowa and Indiana, opening there on March 5.

In the Hoosier State, PointsBet is partnered in with southeast Indiana’s Hollywood Casino in Lawrenceburg, a property of Penn National Gaming, the owners of Detroit’s Greektown Casino-Hotel.

That was similar unfortunate timing as Michigan’s retail sportsbooks, which also fast-tracked openings to coincide with a now-doomed NCAA Tournament.

Still, with a US corporate headquarters now opened in Denver, PointsBet has high hopes for American operations, with a partnership also announced in Kansas, and launches also coming in Illinois and Colorado.

Online casino main Michigan focus for PointsBet

In Michigan, Swanell said the focus is on the online gaming side, noting that a retail launch in Watersmeet won’t do much good while sports are shut down anyway.

“While there’s no sports, the launch really doesn’t mean much and we don’t feel like we’re losing any ground,” he said. “Secondly, until online happens, that’s where 95%-plus of the market opens up.”

A primary PointsBet focus is its new iGaming vertical, being developed for a Michigan debut with hopes for other markets down the road.

“We will have that iGaming opportunity seen side by side with sports betting, which is really important,” Swanell said. “We’re productively using this time that’s very available to us to progress our technology and our go-live solution to our iGaming product.”

Even with the sports slowdown, though, Swanell said PointsBet is committed to being a sports betting company but added the iGaming vertical could be an opportunity to cross-sell customers.

Swanell said PointsBet’s goal is typically to achieve a 10% market share for American states. In New Jersey, the company reported a 5.6% market share.

Swanell: PointsBet ready if Michigan moves faster

Swanell acknowledged that because of the pandemic forcing people to stay home, some Michigan state legislators and industry advocates are hoping to speed up regulatory efforts for online gaming launches.

PointsBet would be ready for a quicker timeline if that happens, Swanell said.

“We’re monitoring that situation closely,” he said. “We think we can get live earlier than otherwise planned, and we would work towards that.”

The CEO also noted the company would be “at or very near the starting line” for mobile launch in Colorado.

Colorado is scheduled to launch sports gambling on May 1 with PointsBet, which is one of 17 forthcoming sports betting app options.

The Denver Post reported the PointsBet app would not launch on May 1, though.

CEO: PointsBet should bounce back stronger

Swanell noted that April to August is usually a quiet time for sports betting anyways, citing that only 28% of annual sports betting happens during the five-month period.

The CEO said PointsBet, less connected to the performance of brick-and-mortar casinos than some American competitors, could bounce back stronger.

“A lot of them are going to the walls pretty seriously,” Swanell said. “It’s a different focus for the business that, while we need to be prudent, we also need to be ready to go.

“We honestly believe that when the market resumes wholeheartedly in the US, we’re going to resume in a stronger position than we left off.”

Profound losses for Michigan Native American tribes

The UP tribes, like the Lac Vieux, are among those feeling the pain from the shutdown.

Bridge Magazine, a nonprofit news organization in Michigan, detailed the impact of the casino closures on the state’s tribes in a report on Monday.

The tribes are not required to disclose internal budgetary details, but there’s profound pain.

Frank Ettawageshik, executive director of the United Tribes of Michigan, told Bridge that “on average, gaming contributions comprise about half of the government budgets for Michigan tribes.”

That means serious dents in tribal services across the board, including health care, education, housing, courts, fire services and police.

Michigan’s tribes also contribute to local non-tribal communities through their pacts with the state.

According to the annual report by the state’s gaming board, Michigan tribal casinos contributed more than $30 million to local governments and more than $54 million to the state from the revenue sharing in 2019.

Northern Waters announced over the weekend that it would not be reopening May 1 as was scheduled, the latest of a series of postponements after the facility closed in mid-March.


Horse racing helps PointsBet handle COVID shutdown

Despite global sports being largely shut down by the coronavirus pandemic, PointsBet reported some positive numbers with hopeful projections down the road.

However, Swanell also said 20 US employees in training, client services and marketing have been furloughed because of the shutdown.

For its Australian market, the company reported an 89.8% growth in net win compared to the corresponding quarter one year ago. March set a net win record for the company despite many sports shutting down during this time.

Swanell said much of that was due to bettors switching over to horse racing, a higher margin market for PointsBet.

Michigan does not offer horse racing betting in sportsbooks.

However, the state’s one remaining live racing track, Northville Downs, was granted the ability to partner with a third-party for advance deposit wagering from the expanded gaming laws.

Variable ‘PointsBetting’ unique option for bettors

Whenever PointsBet does launch in Michigan, the app will offer a unique spin on mobile sports betting.

In addition to traditional fixed markets, “PointsBetting” offers variable bets where outcome amounts are dictated by the margin of a bet’s win or loss.

The company also boasts more prop bets than competitors, including markets such as quarterback completion percentage bets in football and the time of a first basket by a particular player in basketball.

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Matt Schoch

A Michigan native, Matt has worked at newspapers in Michigan, Missouri and the Virgin Islands. A versatile sports reporter, Matt has covered sailing on the Great Lakes, cricket in the Caribbean, high school and pro playoffs, and the Olympics in Rio. He’s also the former host of the Locked On Pistons Podcast and producer of a documentary on Emoni Bates. A former blackjack dealer, Matt has studied the industry from all sides.

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