PointsBet CEO relaxed on further tax hikes in “under pressure” Australia
Sam Swannell prepared for Victoria point of consumption tax leap to 15% as he looks ahead to post-US future
PointsBet CEO Sam Swannell has dismissed fears over further point of consumption tax hikes in Australia ahead of Victoria’s planned increase in July.
Speaking on an analyst call following the operator’s fiscal Q3 results, Swannell said he did not foresee additional raises to the tax on the horizon.
Victoria will ramp up its point of consumption tax from 10% to 15% from 1 July, bringing the state in line with New South Wales, Western Australia, South Australia and Tasmania.
Of that 15%, the horseracing industry’s share of revenue will land at 7.5% of tax incomings to the state.
PointsBet reported a 9% jump in gross win to A$76.9m (£40.3m) and a 20% leap in net win to A$60.8m in fiscal Q3, with Swannell noting this performance came amid a tough backdrop.
The CEO also confirmed the group had budgeted for the upcoming five percentage point increase in point of consumption tax in Victoria.
He said: “Our results in Australia are in a market that’s under some pressure. We are pretty confident in our ability to keep that moment.
“We don’t see an environment where there’s further increases in point of consumption taxes. We think the principal racing authorities are very aware of the negative impacts that would result from further increases,” he added.
Meanwhile, in Canada, sports betting gross win jumped 64% to land at A$6.6m, while sports betting margin in the market moved up to 9.3% from 7.8%.
A 12% increase in cash active customers to around 43,000 coupled with a 52% hike in igaming revenue to A$5.5m also made for positive reading.
On Canada, Swannell said: “The structural difference is that they don’t have racing [compared to Australia]. Historically, we had probably been a bit conservative in our thoughts around where our Canadian sports betting margin would be. We’ve delivered 9.3% for this quarter.
“I would say high eights to nine is what we’d expect [looking forward], so we are definitely ahead of where we were this time last year.”
Finally, the Australian CEO also reflected on the completion of the $225m sale of PointsBet’s US assets to Fanatics, which completed during the quarter.
As a result, net cash flow for the quarter hit A$2m, which was the first positive net cash flow in the company’s history.
Swannell said: “With the sale of the US business complete and the lengthy and complex technical and operation migration behind us, it is a truly exciting time for PointsBet.
“In parallel with managing the closure of the US sale, we’ve completed a material six-month-plus transformation of our operating model, redesigning and building core workflows and resources structures across the business.
“I would like to acknowledge the entire PointsBet team for their significant efforts,” he concluded.