PointsBet Looks to Alberta for Canadian Expansion After U.S. Departure

After suspending its U.S. operations, PointsBet has shifted its focus to the Canadian market, with Alberta emerging as a prime target. The gambling giant is eyeing an expansion similar to the Ontario model, where private sportsbooks can legally operate under provincial licences.

Ontario has been the pioneer in allowing third-party operators to offer online gambling services, a move initiated in April 2022. Despite its recent inception, the sector has already witnessed significant wagering volumes and substantial revenues. However, the lower attention to the players' protection is also taken place there.

The Return of Alberta's United Conservative Party earlier this year has fuelled speculations that the province might adopt a model akin to Ontario's. If this materializes, it would open up new opportunities for companies like PointsBet, extending the total addressable market in Canada beyond Ontario's borders. This prospect has been well received by PointsBet's CEO, Sam Swanell.

Swanell stated that PointsBet believes Alberta could become part of its target market by the second half of 2024, expanding a CA$2 billion market to CA$2.5 billion. He also emphasised that the expansion into Alberta wouldn't significantly impact the company's finances, as their marketing efforts in Ontario already spill over into the western province.

These plans come on the heels of PointsBet's decision to exit the U.S. market, selling its U.S. division to Fanatics for approximately US$225 million. The company, previously involved in New York's mobile sports betting market, won't need to transfer licenses to Fanatics for them to commence legal operations in the Empire State.

Now, PointsBet is turning its attention to profitability, with a focus on expanding into additional provincial markets in Canada, including Alberta. Swanell anticipates increased revenue from Canadian operations, leading to a reduction in losses over the next year, ultimately resulting in positive EBITDA for the operator's 2025 fiscal year.

The Current State of Alberta's Gambling Landscape

Presently, Alberta operates only one licensed online gambling platform, the government-owned PlayAlberta. However, the province is actively working on its gaming market. Towards the end of 2021, the Alberta Gaming, Liquor, and Cannabis Commission initiated a Request for Proposals for sports betting operators. Yet, the winners of this process have not been disclosed.

Initial plans aimed for the launch of the new sports wagering market by the end of 2022. However, this timeline was not met, and the launch was postponed. Karin Campbell, AGLC's manager of communications, shared that negotiations are still ongoing, with no further updates available on the subject.

Our Conclusion

PointsBet's decision to exit the U.S. market doesn't signify a retreat into obscurity; rather, it appears to be a strategic pivot. The company's renewed focus on Canadian expansion, particularly in Alberta, suggests a well-thought-out plan to tap into new markets without a strict legislation. Especially Ontario has proved to be not caring much about players and operations' regulations.