Thank you for standing by, and welcome to the PointsBet Holdings Limited Q4 FY 2020 Appendix 4C and Quarterly Activities Report conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Sam Swanell, Managing Director and Group CEO. Please go ahead.
Good morning, thank you for joining this call for the PointsBet Holdings Limited Q4 FY 2020 business update and activities report. This is Sam Swanell, CEO, and I'm joined on the call today by our CFO, Andrew Mellor, and General Counsel, Andrew Hensher. This morning, I would like to walk you through the Q4 FY 2020 trading performance for the Australian and U.S. businesses. I will hand over to Andrew Mellor to talk through the Appendix 4C quarterly cash flow update released to the ASX this morning. Please note all numbers referred to are unaudited and in AUD unless otherwise stated. We will allow for questions at the end. Please note, questions are for the benefit of shareholders and analysts. Media inquiries are to be directed to Jeff Elliott at GRACosway.
We are unable to answer any specific questions regarding full-year results, details of which will be released to the market at the end of August as part of the FY 2020 full-year statutory results. As can be seen on slide four, the Q4 performance of the Australian trading business resulted in strong growth across the key KPIs, including turnover of AUD 302.9 million. As expected, our U.S. business was impacted by the pausing of key U.S. sports in March. However, I was pleased that the business was able to generate AUD 46.5 million in handle over the quarter. Turning to slide five. The Australian trading business performed exceptionally well, achieving a record net win for the quarter of AUD 32.4 million, up 330.4% from the PCP, with each month successively breaking PointsBet's net win record. Net win margin of 10.7% was up from 8.7% in the previous quarter.
This represents a record quarterly net win margin. This strong overall performance has been driven by three key factors: PointsBet's racing turnover growth in percentage terms outperforming the market when compared to other wagering service providers, the improvement in PointsBet's overall product offering, leading to a greater share of wallet from existing clients, and the shift of gambling spend online as a result of COVID-enforced retail venue closures. In Australia, the business saw an 80.5% increase in turnover and a 330.4% increase in net win compared to the PCP. Quarterly net win of AUD 32.4 million takes the total FY 2020 net win in Australia to AUD 75.1 million, up over 159% on the PCP. As well as delivering record monthly net win in each of April, May, and June, the Australian trading business had its second and consecutive positive EBITDA quarter.
Despite a lack of sport for a large part of the quarter, Australia saw significantly improved results compared to Q4 FY 2019 across metrics such as bets per client, turnover per client, and net win per client. The launch of the Same Game Multi product in July, while still in its early days, has seen an increase in multi-turnover, which over time should drive an increase in gross margin. The quarter saw the successful execution of an agreement to become the exclusive wagering partner for Fox Sports AFL during the 2020 AFL season. This successful partnership complements the company's earlier media deal with Channel Seven to become the exclusive Victorian odds integration partner for their autumn and spring national horse racing coverage and highlights management's continued disciplined and opportunistic approach to targeting media assets to deliver efficient client acquisition and increased betting volumes. Turning to slide six.
As a result of the four major U.S. sporting leagues being absent for all of Q4 FY 2020, PointsBet U.S. recorded net win of AUD 1.2 million at a net win margin of 2.5% in Q4 FY 2020. This resulted in a year-to-date net win of AUD 7 million. During this quarter, as previously communicated, the U.S. marketing spend was reduced significantly from pre-COVID expectations. Following the suspension of the major sports leagues, a number of new sports and competitions were approved for wagering by U.S. regulators. Table tennis proved most popular, with over 100 events daily being able to be bet on pre-match and in-play, and as a result, table tennis represented the highest handle of all sports offered in April and May. AUD 46.5 million in turnover demonstrates the strong performance from the PointsBet team in keeping clients engaged during a period with no NFL, NBA, MLB, or NHL.
We are well-placed to execute on the restart of the major sporting leagues across the U.S., with Major League Baseball having commenced last Thursday, U.S. time, and NBA basketball and NHL resuming this week. PointsBet is operational in New Jersey, Iowa, and Indiana. As noted earlier this month, PointsBet has now also received a permit authorizing retail and digital operations in Illinois. Subject to the company's partner, Hawthorne Race Course, receiving its master sports wagering license, PointsBet plans to launch in Illinois by the end of August. Launches in Colorado and Michigan will follow Illinois. Michigan will see the launch of PointsBet's iGaming product, the development of which is progressing well and on schedule. As a reminder, PointsBet currently has access to a total of 12 U.S. states, subject to where relevant, the passing of enabling legislation and licensure. PointsBet is very well-positioned to continue to expand its state footprint.
PointsBet recently announced a partnership with the Detroit Tigers Major League Baseball team, being the first sports betting partnership for a professional sports team within Michigan, and also the first for any MLB franchise. Sponsorship agreements serve to drive brand awareness in the jurisdictions in which we have market access, and also shows continued confidence in our business and brand by major sporting organizations in the United States. During the quarter, PointsBet achieved a market share of 8.7% in New Jersey, based on New Jersey online sports betting handle for the quarter, as reported by the New Jersey Division of Gaming Enforcement. On 9 July 2020, PointsBet announced an agreement with BetMakers to offer fixed odds betting on racing in New Jersey, with scope to expand to other jurisdictions subject to receipt of all necessary regulatory and other approvals.
This represents a significant opportunity for the company given PointsBet's experience in fixed odds racing in Australia, as well as the potential size of the opportunity in the U.S. To provide some perspective, annually, there are twice as many horse races in the U.S. as there are in Australia, with larger total prize pools. Currently the amount wagered per capita in the U.S. on horse racing remains a fraction of that in Australia. Turning to slide seven . The suspension of the key global sports since March 12th had a direct impact on client acquisition and client activity overall in both the U.S. and Australia. In Australia, with the NRL and AFL seasons relaunching in the months of May and June, respectively, PointsBet has seen client acquisition activity normalize towards pre-COVID expectations.
In the U.S., due to the lack of premium sporting content for clients to bet on and the reduction of marketing spend that followed, lower activity naturally resulted. For the 12 months to 30 June 2020, the group had just over 111,000 active clients, being those clients who have placed a bet during the 12-month period. As can be seen from this slide, 12-month active clients have increased by 9,206, being 9% in H2 FY 2020, compared to an increase of 34,145, being 74% in H2 FY 2019. This is a direct result of the suspension of sports in Q3 and Q4, as just described. I will now hand over to Andrew Mellor to talk to the Q4 Appendix 4C quarterly cash flow update released to the ASX this morning.
Thank you, Sam, and good morning to all in Australia, and good afternoon to all in the U.S. Turning to Slide 10. As communicated in our last quarterly update, the company had a number of levers to pull to significantly reduce costs as we dealt with the impact of COVID. In the U.S., we immediately reduced our marketing expenses and cost of sales where possible, which resulted in a significant reduction of these expenses compared to our pre-COVID expectations. As Sam has spoken to, in Australia, the closure of retail wagering in gaming venues during the quarter saw a shift of gambling spend online. This, together with the upcoming brand consolidation in the market, created a unique opportunity for our Australian business. The company sought to capitalize on this by increasing our Australian marketing spend during the quarter.
The company has always taken a disciplined and pragmatic approach to managing its cash flows, and the importance of this strategy was never more pertinent than in Q4 FY 2020 as the company responded to COVID. At the 30th of June 2020, the company's corporate cash balance was AUD 135.4 million, with the quarterly AUD/USD FX movement resulting in an unfavorable contribution of AUD 11.7 million during the reporting period as the company holds the majority of its corporate cash in USD. As a reminder, the company has no borrowings. Receipts from customers for the quarter totaled AUD 33.4 million, bringing the year-to-date total to AUD 82 million. Net cash received from operating activities in the quarter ending 30 June 2020 was AUD 3.1 million. Excluding the movement in player cash accounts, net cash received from operating activities was AUD 1.2 million.
The positive quarterly net operating cash flows resulted primarily from Q4 U.S. marketing spend being reduced significantly from pre-COVID expectations in the June quarter, the strong performance of the Australian trading business, and the timing of operating payments. In Q1 FY 2021, as major U.S. sports restart, PointsBet will resume its targeted U.S. marketing strategy. As a result, the company expects to return to negative quarterly net operating cash flows in the coming quarters. Away from receipts from customers, operating cash flows were driven by cost of sales, being AUD 11.2 million. Non-capitalized staff costs, being AUD 6.7 million. Marketing costs, being AUD 9.3 million. Administration and corporate costs, being AUD 5.4 million. Net cash used in investing activities in the quarter ending 30 June 2020 was AUD 3.9 million, predominantly related to U.S. business development and capitalization of technology staff costs. I'll now hand back to Sam to provide some concluding comments.
Thank you, Andy. Turning to Slide 11. It is clear that throughout this quarter, every aspect of the business has retained our single-minded focus on execution. In Australia, the execution by the technology, marketing, client service, and trading teams to achieve the growth and margin improvements was first-class. In the US, our team continued to focus on maximizing engagement on minor sports and on the readiness for launch in Illinois, Colorado, and Michigan, and the relaunch of the key U.S. sports. Our global technology team continued unabated to build and improve upon our scalable proprietary technology platform. This can be evidenced by items such as the recent launch of our new lightning-fast and responsive app and website in Australia. Same Game Multi, as previously noted, will drive an increase in gross margin. Single sign-on functionality for our U.S. clients using our services in multiple jurisdictions.
Our U.S. market first Parlay Booster product. For the coming half, we look forward to executing our full brand-led marketing strategy in Indiana and Illinois, and further demonstrating the capability of our outstanding team to achieve target market share. In Australia, we will continue our strong momentum on the back of a smorgasbord of sport and racing. Significantly, we will have a never-seen-before depth of popular sports running concurrently as we enter the new financial year, seeing a resumption of the big four U.S. sports, the continuation of Australian sports in NRL and AFL, and continued strong racing content across all codes leading into the Spring Carnival. It truly is an exciting time for our business, and I would like to thank PointsBet staff globally for their resilience and dedication over the last few months.
I would like to thank you for your time today and would welcome any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Phillip Chippindale with Ord Minnett. Please go ahead.
Good morning, gents. Thanks for your time. First question, just want to touch on the New Jersey market share that was just under 9% for the quarter. Can you just talk to what, in your opinion, was the driver for that improved percentage? I know it was a significant jump from the previous quarter. I guess I'm wondering, is it more about the more niche sports that you're offering, or is there any other sort of driver for you, to points to?
Hey, Phil. Look, I think it was down to, again, us being very focused on keeping activity at decent levels, making the most of those 2nd-tier sports. You could say that some of our competitors that had an online casino product maybe shifted their focus to casino, to being less so on sports. I think those elements are what's contributed there.
Okay, thanks. Just turning to Illinois, can you give us a bit of an update in terms of the current state of the requirements regarding in-person sign-up in that state? I understand there was a period of time where that requirement was suspended. Is that still currently the case, or if you can just give us a bit of an update on that, please?
Yeah, for sure. The legislation as written requires in-person registration for 18 months in Illinois, and that was a net positive for PointsBet given our locations with Hawthorne Race Course, not only the primary location, but the three off-track betting shops which are very close or part of the Chicago area. We felt we were well-placed in Illinois to take advantage of that in-person registration requirement. The governor did effectively put that on the sidelines for a month, but that sidelining has now been removed. We're back to as per the legislation. Really, there's only one sportsbook live in Illinois, and that's Rivers. They've had a short window of opportunity to sign up people remotely, but we're now back to the intended in-person registration environment.
Okay, thanks. I just want to touch on some news out overnight regarding Major League Baseball being interrupted by COVID, some similar-ish articles talking about some impacts on NFL teams. Can you just talk about PointsBet's strategy if in fact there is significant disruptions to the big U.S. sports coming back online?
Yeah. I think the first thing is, the MLB is still ongoing, but yes, the Miami Marlins team had some positives. I think the other distinction is that both the NBA basketball and the NHL hockey, which are starting this week, are both doing so from hubs. The ice hockey, for example, they're actually in Canada, and they've been testing through the roof, and there's been no issues there. I think MLB is a little bit different risk level to the basketball and the hockey. In terms of catering for all scenarios, we just have to be on our toes and be agile and be built into any plans, whether we're making commitments to marketing assets or deals, that we build in the possibility that these could be interrupted seasons. Obviously, that's front of mind for everyone.
Again, I think our ability when COVID first hit to dial down our marketing and respond very quickly was first rate, and if required, we'll do that again. I think the NFL's entered their training camp, and as I said, the NBA and the ice hockey in the hubs, I think that's a pretty positive sign.
Thanks, guys. I'll jump back in queue with somebody else. Thank you.
Thank you. Your next question comes from Don Carducci with JP Morgan. Please go ahead.
Good morning, gentlemen. Thanks for your time. Just two questions from me. The first one being, you've been reporting Iowa and Indiana key metrics up until this quarter. Can you let us know why that's no longer relevant to look at your growth across those American states? Was this one of the key drivers to the gross win margin almost halving from 6.2% to 3.5%?
Yeah, Don. Hi. It did include on the very back page an appendix that breaks down the states. We did include that. The one thing I would note is that for Indiana, we literally launched for one week before COVID hit. It's effectively on hold. For Iowa, we've been clear since that market opened up, that mobile registration begins on January 1. Until then, it's in-person registration, and we don't have, unlike our Illinois set up, we don't have the best location there. We're not investing large amounts at all to marketing.
Okay, great. Maybe just to expand on the question that Phillip asked, I know you'd mentioned iGaming and casinos and whatnot, we all know there are fewer opportunities to wager. Can you help us understand what's happening with the U.S. growth story particularly? I'm trying to reconcile how you lost 8% of active customers in the fourth quarter. At the same time, your market share in New Jersey increased three percentage points from 5.6 to 8.7. It just feels like this means New Jersey was less attractive to the competition. If you're losing customers but gaining market share, we'd be keen to hear you kind of elaborate that on a little bit more, if you could.
Yeah. Well, it's even like Australia. Even take a month like April when there was no AFL or NRL in Australia, actives are way down because AFL and NRL and the American sports have the mass appeal. You're talking about in a market for all of Q4 in America where none of the big four sports were live. There's a large part of the consumer that really only wants to be active on sports betting when those big four sports are live. Activity just naturally drops, and then that's further, I suppose, emphasized by the fact that we all drop our marketing spend because it's not worth investing at the same levels, when you don't have those sports to monetize the activity. Those two factors just means that the overall market, obviously, if you look at the New Jersey total numbers, they've come down dramatically.
We're part of that, but I suppose relative to our peers, we were able to grow within that smaller market.
Would that mean that you would expect when sports turn back on that you're going to see your market share decrease or your active customers increase as a result?
Yeah. Certainly in terms of active customers, they will definitely start to increase, and we'll start to spend marketing dollars again, and the activity will pick right up. In New Jersey, we're spending at a marketing level that is equivalent by our measures to be about a 5%-6% player. Okay? We do see this as a slight outperformance compared to what we expect from our marketing investment.
Great. Perfect. Thanks, everyone.
Thank you. Your next question comes from Damien Williamson with Bell Potter. Please go ahead.
Yeah. Hi, Sam and Andy. Great result. Just a question on your Australian result. The daily net win rate has accelerated in what you reported at the end of May. Given the Australian results, do you see that you could potentially overtake Bet365 and Ladbrokes in terms of your ranking in the Australian marketplace over the next little while?
Hi, Damien. Look, I think it's really encouraging, obviously, that the online market as a whole that we're now playing into has definitely grown. There's certainly been a transference from offline to online, and even with offline opening back up, we always expected that a portion of that would remain online, and we're now playing into a bigger pool. We know that we are growing faster than our peers based off what we see from the principal racing authorities when they report some of their turnover numbers. Obviously we are coming off a lower base when you're compared to your Ladbrokes, et cetera. Look, Ladbrokes also own Neds, so we think of them as sort of combined. That's the one operator with two brands. They're still a fair way ahead.
Bet365 is probably a logical goal for us to aim for to sort of become that number four operator. You've got Sportsbet and BetEasy coming together, which is a great positive for us in this marketplace with the cessation of the BetEasy brand. You've obviously got Tabcorp, and then you've got Ladbrokes/Neds. I think our aspiration to be number four in the marketplace is strong.
Okay. Just a final question. In terms of launching in Illinois, can you provide an update on what the status is of DraftKings and FanDuel and their access to Illinois?
Yeah, certainly. DraftKings have announced their partnership with Casino Queen a casino in St. Louis, it's not in Chicago. They haven't launched yet, and I think there's still some regulatory hurdles that they need to jump through to get live. Obviously, the in-person registration being reinstated as per the legislation probably hurt their aspirations a little bit for the state. Probably one of the reasons their share price is down overnight. FanDuel haven't announced officially who their partner is, but it's expected to be Fairmount Park Racetrack. They're expected to be in the state of Illinois. As we've touched on, the in-person registration limits, I suppose, the ability for them to leverage their databases, and their locations certainly aren't as strong as those of PointsBet.
Great. I think that's all from me. Well done, guys.
Thank you. Your next question comes from Alice Lee with Credit Suisse. Please go ahead.
Hi, Sam. Hi, Andrew. Thanks for taking my questions. The first one is just a follow-up on Illinois. In terms of the launching, once PointsBet holds receives the master license, what still needs to happen? Like, is there going to be retail fit outs, for example, and how's the regulatory process?
There's still a couple of tick-offs that need to happen once Hawthorne receive their license. Just final checking of systems and that everything's in place. That's maybe a week or two, but we've sort of guided that towards the end of August or by the end of August, we hope to be live in Illinois.
Okay. I just wanted to confirm, for the three metropolitan retail shops, can they also take online registrations?
Can they take online registrations? Yes. Sorry. Yes, certainly they can. Yes. One of the opportunities for us, obviously, is that those off-track betting shops already have very good customers coming through the door betting on the horse racing that's going on through the ADW there. We'll certainly be, not just the fact that you have to go to a physical location to sign up an account before you go home and can bet on your mobile, but it's also an opportunity for us that there's good foot traffic and good quality clients there for us to acquire.
Just on that, once you're live, I think there will be a race in getting clients into your doors. What's the early days strategy going to be? Is it going to be TV, radio, digital first, or even event partnerships, for example?
Yeah. Obviously, if we're going into in-person registration, it's a different strategy than if it's mobile registration because we need to drive people at some part of the funnel to one of our four locations. We will be executing a more rounded marketing strategy than we've been able to execute in New Jersey. I've spoken before about the fact that one of the reasons we're limiting our spend in New Jersey to current levels and not pushing harder is twofold. One, we can't execute a full media strategy because a lot of media dollars would be wasted into New York and Pennsylvania. Two, we'll wait until we've got our online casino product live in that state before pushing to the next level. Indiana and Illinois are really the target states for us going forward, and we'll be looking to execute a more well-rounded brand strategy.
We want to introduce to the market that there's alternatives to FanDuel and DraftKings, and that PointsBet is here. Again, that's not something we've been able to do on a large scale in New Jersey. That's one of the reasons we are confident in our ability to hit our target market share in those states.
Great. Just one last point on Illinois. I think there's some ambiguity in terms of the branding rules in that state. Casino Queen, for example, recently rebranded as DraftKings. I just wonder, in terms of PointsBet's strategy, what's the name going to be for the brand? Is it corporate recall , maybe co-branding or just PointsBet?
No, it's definitely PointsBet. The rule issued by the Illinois Gaming Board around branding talks about co-branding. It's similar, as you'd know, Alice, to what's been happening successfully in Pennsylvania. Any brand recognition for locally advertised assets and on our app, et cetera, will contain sort of both logos, but it's definitely the PointsBet Sportsbook. Look, the state of Illinois recognizes that national players such as us, we're going to be doing national marketing, and that'll be under our national brand. If they want to get the benefit of that in the state of Illinois, we have to be able to use our brand, and that's what that rule represents.
Okay, great. Thanks. My next question is also a follow-up in light of the MLB league outbreaks. If in FY 2021, this is going to be the new normal for a while, being sporting events on and off, possible suspensions. You touched on committing to marketing dollars. Do you mind just going into a bit of details in terms of how much do you think is going to be fixed in terms of marketing, and what are some of the other fixed OpEx? How agile is PointsBet going to be in terms of like rolling with the punches with this?
Yeah, there's not much I can add there, Alice, other than just the fact that obviously we're aware of the risks and the flexibility that we need to build in, and all of our marketing plans and contracts have catered for those scenarios. Obviously, digital marketing you can turn up and down very quickly. With some of the brand and sponsorship, et cetera, you're making commitments, but we have catered to those scenarios.
Okay. I have one last question. Just in Australia, going forward, do you plan to maybe keep increasing spending and expanding over here or maybe take some profits and move your capital for the U.S.?
Look, our plan is to increase marketing spend in Australia because the opportunity is presenting, and we monitor this client lifetime value to cost per acquisition actively in real-time. If we can spend money efficiently and maintain that positive relationship, then we will keep spending. The Australian business has produced two positive EBITDA quarters. That gives us great confidence that we have some choices around the Australian businesses as to just how much we can invest in the Australian market. Hopefully, it will not be at the expense of our capital being allocated to the U.S.
Okay. That's great. Thank you so much for your time.
Thank you. Your next question comes from Rohan Sundram with MST Financial. Please go ahead.
Morning, Sam and Andy. Thanks for this. A couple of questions on the domestic front. Can I just start with, post the gradual reopening of the tabs, has anything surprised you in terms of the portion of customers you've been able to retain versus those that might have gone back to retail?
Look, it hasn't surprised because we always expected that once recreational customers experience online betting with a company like PointsBet, it's a pretty compelling experience compared to the pure cash play. The positive thing is that with the return of sport, as I spoke about, that's increased our, let's call it our active base, because it has broader reach and broader appeal. The momentum has continued, which has been good.
Okay, great. Last one from me. Around the net win margin, the spike you saw there, is there any way you can attribute that in ballpark terms between the customer and the product mix initiatives versus favorable results? Broadly.
What I'll say is that, the fact that you have a larger portion of your turnover racing-related than sports-related. Sports is lower margin, racing is higher margin. The fact that sports only started returning, and when we talk about sports returning, we're only talking about the Australian sports, we're not talking about the massively popular U.S. sports. NBA basketball is the biggest betting sport in Australia. These U.S. sports have an impact, even though it would otherwise be the downtime in U.S. sports at the moment. With this quarter, there's two main factors that I'll talk about. One, the fact that racing turnover was a greater share than it would otherwise have been, if not for sports suspensions. Two, there has been some favorable results. There's no doubt about that.
As our product improves and as our overall operation improves, our ability to attract and retain those recreational customers, and to give away less generosities to do so, improves. You've sort of got all of those factors working together.
All right. Thanks, Sam.
Cheers.
Thank you. Your next question comes from Desmond Tsao with Goldman Sachs. Please go ahead.
Morning, Sam. Morning, Andy. Thanks for taking my questions. I've just got a couple of really quick ones, perhaps asking Rohan's question in a slightly different way. Obviously, very impressive trends across the net win margins. As you sort of alluded to, sort of a move from sports to racing. I just want to pick up on a comment on the call. I think you mentioned that month-on-month, that trend has been increasing, but really keen to sort of perhaps focus on how the net win margin looked in June, particularly when you had AFL and NFL restarting. I guess, how we should think about it into July with racing somewhat sort of easing, and then you've got an avalanche of sports coming back online.
Yeah. We haven't released June specific numbers, so I won't talk to that specifically. We did make the comment that we've continued our run of record net win results. June was bigger than May was bigger than April. Given that June saw the return of at least the Australian sports, and then the return to, let's call it, the new COVID normal through most parts of Australia, I think that's pretty encouraging for going forward.
Yeah. Okay, that's great. Maybe just a question around, I suppose, the theory that potentially there may be player fatigue with all these key sporting events coming back online. You had the Premier League, NRL, and AFL in June and July. What lessons can you sort of learn from the Australian business and apply that to the U.S. with the four key sports coming back on in the U.S. over the near term?
Yeah. Look, in Australia, as I touched on, we're going to have the Aussie sports, the American sports, and racing all going at once. They normally get spread out. We expect to see really heightened activity. There's still some restrictions, especially in Victoria, on the way people can spend their discretionary entertainment dollar. We're still in this sort of slightly strange post-COVID environment in Australia. In the U.S., look, NFL is the biggest sport. That's the way it is. NBA is next biggest, the NFL on a per match basis. That's on track for September. That works out well. Look, we know our clients. We know what they like to bet on. From a CRM perspective, you try and target offers and the materials that you're putting in front of them.
We've just got to prioritize based on our knowledge of our client base and what appeals in the market.
Okay. Now, that makes sense. Thanks, guys.
Thank you. Your next question comes from David Fabris with Macquarie Group. Please go ahead.
Oh, hi, Sam. Hi, Andy. Look, a lot of the questions that I was going to ask have already been done. Firstly, just trying to get a bit more color of the Aussie market, and I guess trying to understand sort of consumer behavior on a sequential monthly basis, if you can talk to it around sort of bet size and frequency. Has that changed more so as offline has reopened and you've got more subsidization of consumer activities available, or have you still seen continued frequency and bet volumes from your customer base?
As the Aussie sports have returned and your client base gets deeper, again, because they have the mass appeal, whereas the people that were betting through the period where there was no Aussie sports, there was transference from sport to racing, but they're your keener punters. As the mainstream appeal sports return, you'd naturally expect your actives to go right up. There's more people betting in a month, but they might be the type of people that only have one bet a week or two bets a week. Some of your per active statistics would naturally come down. Similarly, as we've spoken about before, yields should come down because sports should make up a larger portion of the turnover.
There's nothing happening that we wouldn't expect to happen other than to say that strong momentum, generally, I think both from the market but also from us, because of the improvements we've made and the momentum that we've built is carrying us well through this period.
Got you. Just some comments you made, and obviously, how strong these U.S. sports are to some customers. Do you think there's a cohort of the customer base that's going to come back on and give you incremental share of their wallet, or do you think they'll just subsidize it from other betting products like table tennis back into NBA?
I think there's definitely players out there that are U.S. players. They're the sports that appeal to them, and that's when they bet. They may bet a little bit when those sports aren't there, but they will predominantly bet when their favorite sports are available. Again, it just adds to that equation I was talking about. Your actives will grow because you've got all the sports that have appeal happening, so your activity will be strong. Just in terms of the per player activity, you may see some of those individual stats come down.
Got you. Just one last question. Just on the shift between offline to online, and with the reopening of some wagering venues, have you seen a drop-off in volumes from those customers over the sort of from the three-month period, and what are you doing to try and keep them on the platform?
That's been a positive. During, let's call it the full lockdown period, as I said, it's your really keen punters that are playing regularly. There was also that element of transference, and there was that element that there was no other entertainment options in town. Even some of my friends who really only bet on Melbourne Cup Day were having a bet occasionally on a Saturday. You're seeing that it's a consistent message. You're seeing the average client be less, I suppose, of that really committed, keen player all the way down to the more recreational. Generally speaking, the quality of clients that PointsBet is able to attract and retain now is far better than it was 12 months ago, and that's on the result of an improving product.
Yeah, I guess what I'm trying to work out is some of those customers that have come from retail, have you seen them sort of migrate back to retail, or you think they're sticking and spending the same amount of money?
No, we think they're sticking. Yeah.
Okay, great. Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Joseph [Mpunga], a private investor. Please go ahead. Hello, Joseph. Your line is live into the call.
Hi. Sorry about that. I was just on mute. Hi, guys. Thanks for taking my call. My query was just, I had two queries. First one in relation to the partnership with BetMakers. I note that they have recently acquired seven new tracks, one being Fairmount Park in Illinois. I know you just made reference to Andrew potentially partnering with them, I'm unsure whether or not you're maybe looking into extending the partnership with BetMakers from the Monmouth Park track in New Jersey to extend it to Fairmount Park, per se. The second query was just in relation to, I guess, you mentioned the four major sporting codes in the U.S. Obviously, you've got Allen Iverson as the face of just NBA, also the partnership with Ralph Wilson from NFL to your partnership with Detroit Tigers, there's nothing seemingly in the works for NHL.
Just wondering whether you have any intention to, I guess, for some kind of market penetration strategy into that code.
Yeah, thanks, Joseph. Firstly, in terms of BetMakers, they've started by signing Monmouth Park as a track that they will allow, for example, PointsBet to bet on, subject to regulatory approvals. Their aim, as you touched on, they've then gone further, secured more tracks. Their aim is to go around and sign up a bunch of tracks in America, but also tracks from outside of America to provide content for us to offer in states like New Jersey and other states as we launch. I suppose they're doing a bit of a role of educating the marketplace in the U.S., the tracks about taking on fixed odds betting, because they're all parimutuel at the moment. We'd expect that the list of domestic tracks in America and international tracks that U.S. clients can bet on will slowly increase over time.
The first, obviously, thing that needs to happen is the regulatory approval in each state. Yeah, it's certainly our intention that this will become a larger product set than one track, and we'll have a good, just like in Australia, we have a really strong product mix of racing, that the same thing can occur in America over time. In terms of brand ambassadors, I think it's probably more about finding individuals that have appeal in certain locations. Yes, that may be an NHL player, it may be an NBA player, but what we did with Allen, for example, was targeted to that New Jersey market where he had really strong recognition and high appeal. I think it's definitely within the possibilities as we go into new markets and new areas of America that we also use other brand ambassadors.
Okay, thanks for that. Obviously, you had the Haskell event at New Jersey in the recent week. Was your offering available for that weekend?
No. The BetMakers, the Haskell the big event for Monmouth every year, and BetMakers were hoping that perhaps their product would be live by that date. No, it's still awaiting regulatory approval in New Jersey, so until that happens, that's the final domino that has to fall. We can't bet on that product.
Okay. Thank you.
Thank you. The next question is a follow-up question from Don Carducci with JP Morgan. Please go ahead.
Thanks, everyone. One more question. You've mentioned being disciplined and targeted with your media and marketing spend in specific states. On a relative basis, your competitors who are planning to do the same have raised a little over $2 billion in aggregate over the last few months. Can you talk to what your comfort level is to retain competitiveness with those operators when you have less than $100 million on the balance sheet?
Thanks, Don. Look, my aim for the business has always been that the business will always have enough cash to execute upon its aspirations. That's always been the case, and as we grow and confirm our aspirations in certain states, that will dictate how much cash we need. We're certainly not naive to the equations around marketing investments, and at this stage, we're aiming for a 10% market share in the states in which we're going live into. Yeah, the pace at which those states legalize and our aspirations of business will dictate how much cash we need.
Great. Thank you.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Swanell for closing remarks.
Thanks, everyone, for your time. Look forward to speaking in the future.