Earnings Call: Q4 2020

Jul 27, 2020

Thank you for standing by, and welcome to the PointsBet Holdings Limited Q4 FY twenty twenty 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. I would now like to hand the conference over to Mr. Sam Managing Director and Group CEO. Please go ahead. Good morning, and thank you for joining this call for the Pointsworth Holdings Limited Q4 FY 'twenty business update and activities report. This is Sam Swinell, CEO, and I'm joined on the call today by our CFO, Andrew Melo and General Counsel, Andrew Henscher. This morning, I would like to walk you through the Q4 FY 'twenty trading performance for Australian and U. S. Businesses. I will then hand over to Andrew Melo 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 Australian dollars unless otherwise stated. We will allow for questions at the end. However, please note questions are for the benefit of shareholders and analysts. Media inquiries are to be directed to Jeff Elliott at GRA Cosway, and we are unable to answer any specific questions regarding full year results, details of which will be released to the market at the August as part of the FY 'twenty 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 $302,900,000 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 £46,500,000 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 $32,400,000 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: PointsBit's racing turnover growth in percentage terms, outperforming the market when compared to other wavering service providers the improvement in PointsBit'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 $32,400,000 takes the total FY 'twenty net win in Australia to $75,100,000 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 of lack of sport for a large part of the quarter, Australia saw significantly improved results compared to Q4 FY twenty nineteen across metrics such as bets per client, turnover per client and net win per client. Further, 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 twenty twenty 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 horseracing coverage and highlights management's continued disciplined and opportunistic approach to targeting media assets to deliver efficient client acquisition and increased betting volumes. Now turning to Slide six. As a result of the four major U. S. Sporting leagues being absent for all of Q4 FY 'twenty, PointsBet U. S. Recorded net win of $1,200,000 at a net win margin of 2.5% in Q4 FY 'twenty. This resulted in a year to date net win of $7,000,000 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. 46,500,000.0 in turnover demonstrates the strong performance from the PointsBet team in keeping clients engaged during a period with no NFL, NBA, NLD 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 Racecourse receiving its Master Sports wagering license, PointsBet plans to launch in Illinois by the 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 09/2020, 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 dodge 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 size pools. However, currently, 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 12 had a direct impact on client acquisition and client activity overall in both The U. S. And Australia. In Australia, with the NOL and AFL seasons relaunching in the months of May and points for the same client acquisition activity normalized towards pre COVID expectations. In The U. S, due to lack of premium sporting content for clients to bid on and the reduction of marketing spend that followed, lower activity naturally resulted. For the twelve months to thirty June twenty twenty, the group had just over 111,000 active clients, being those clients who have placed a bet during the twelve month period. As can be seen from the slide from this slide, twelve month active clients have increased by 9,206 being 9% in H2 FY 'twenty compared to an increase of 34,145 being 74% in H2 FY 'nineteen. And this is a direct result of the suspension of sports in Q3 and Q4 as just described. I will now hand over to Andrew Melo 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 expectation. As Sam has spoken to, in Australia, the closure of retail wagering and 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 and 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 'twenty as the company responded to COVID. At the June 30, the company's corporate cash balance was $135,400,000 with the quarterly AUDUSD FX movement resulting in an unfavorable contribution of $11,700,000 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 $33,400,000 bringing the year to date total to $82,000,000 Net cash received from operating activities in the quarter ending thirty June twenty twenty was $3,100,000 Excluding the movement in player cash accounts, net cash received from operating activities was $1,200,000 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, the strong performance of the Australian trading business and the timing of operating payments. In Q1 FY 'twenty one, as major U. S. Sports restart, PointsBet will resume its targeted U. S. Marketing strategy. And 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 11,200,000.0 non capitalized staff costs being $6,700,000 marketing costs being $9,300,000 and administration and corporate costs being $5,400,000 Net cash used in investing activities in the quarter ending thirty June twenty twenty was $3,900,000 predominantly related to U. 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 U. S, our team continued to focus on maximizing engagement on minor sports and on the readiness for launching 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, which was, as previously noted, will drive an increase in gross win margin single sign on functionality for our U. S. Clients using our services in multiple jurisdictions and our U. S. Market first pilot 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 racing. Significantly, we will have a never seen before depth of popular sports running concurrently as we enter the new financial year, being 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 we'd welcome any questions. Thank Your first question comes from Phil Chickendale with Audit Minute. 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? And there was a significant jump on the previous quarter. So I guess I'm wondering, is it more about the more niche sports that you're offering? Or is there any other sort of drivers that you could point to? Phil, look, think it was down to, again, us being very focused on keeping activity at decent levels, making the most of those second 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. Just turning to Illinois. Can you give us a bit of an update in terms of the current state of the requirements regarding the person to sign up in that state? I understand there's a period of time where that requirement was suspended. So is that still currently the case? Or can you just give us an update on that, please? Yes, for sure. So the legislation as written requires in person registration for eighteen months in Illinois. And that was a net positive for PointsBet given our locations with Hawthorne Racecourse, not only the primary location, but the three off track betting shops, which are very close or part of the Chicago area. So 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 it's now that sidelining has now been removed. So we're back to as per the legislation. Really, there's only one Sportsbook Live in Illinois, and that's Rivers. So 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. Finally, just want to touch on some news out overnight regarding Major League Baseball being interrupted by COVID, some sort of similar ish articles talking about some impacts on NFL teams. Can you just talk about points of strategy, if in fact there is significant disruptions to the big U. S. Sports coming back online? Yes. 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 is starting this week, are both doing so from hot hubs. The ice hockey, for example, they're actually in Canada. And they've been testing through the roof and no issues there. So I think MLB is a little bit different risk level to the basketball and 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 this could be interrupted seasons. And obviously, that's front of mind for everyone. And again, I think our ability when COVID first hit to dial down our marketing and respond very quickly with first rate. And if required, we'll do that again. But I think the NFL's entered their training camp. As I said, the NBA and the ice hockey in the hubs, I think that's a pretty positive sign. Your next question comes from Don Cardusi with JPMorgan. Just two questions from me. The first one being that 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? And was this one of the key drivers to the gross win margin almost halving from 6.2 to 3.5%? Yes. So hi, Ali. No, we did include on the very back page an appendix that breaks down the states. So we did include that. The one thing I would note is that for Indiana, we literally launched for one week before COVID hit. So it's effectively on hold. And 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 setup, we don't have the best location there. So we're investing large amounts at all to marketing. Okay, great. And then maybe just to expand on the question that Phil had asked. I know you'd mentioned iGaming and casinos and whatnot. We all know there are fewer opportunities to wager. But 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, would be keen to hear you kind of elaborate that a little bit more if you could. Yes. It's even like Australia. So 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. So you're talking about in the market through all of Q4 in America where none of the big four sports were live. So 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. So 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. So we're part of that. But I suppose relative to our peers, we were able to grow within that smaller market. So 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? Yes. So 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. But in New Jersey, we're spending at a marketing level that is equivalent by our measures to be about a 5% to 6% player, okay? So we do see this as a slight outperformance compared to what we expect from our marketing investment. Your next question comes from Damian Williamson with Bell Potter. Great result. Just a question on your Australian result. The daily net win rate has accelerated from what you reported at the May. And given the Australian results, did you say that you could potentially overtake BET365 and Ladbrokes in terms of your ranking in the Australian marketplace over the next little while? 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 the 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. But obviously, are coming off a lower base when you compare to your lab ropes, etcetera. So look, lab ropes also own MEDs, so we can condemn as sort of combined. That's the one operator with two brands. They're still a fair way ahead. BET three sixty five is probably a logical goal for us to aim for to sort of become that number four operator. You've got Sports Bet 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 then you've got LadbrokesNED. So I think our aspiration to be number four in the marketplace is strong. Okay. And just a final question. In terms of launching in Illinois East, provide an update on what the status is of DraftKings and Fanjuls and their access to Illinois? Yes, certainly. So DraftKings have announced their partnership with Casino Queen Casino in St. Louis, so 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. It's probably one of the reasons their share price is down overnight. Fanjul haven't announced officially who their partner is, but it's expected to be Fairmont Racetrack. So they're expected to be in the state of Illinois. But 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 have points been. Your next question comes from Alice Lee with Credit Suisse. First one, just a follow-up on Illinois. So in terms of launching, once home of its host receives the master license, what still needs to happen, like if they're going to be retail free house, for example, and how's the regulatory process? Yes. There's still a couple of key costs that need to happen once Hawthorne received their license. Just final checking of systems and that everything's in place. So that's maybe a week or two, but we've sort of guided that towards the August or by the August, we hope to be live in Illinois. Okay. And I just wanted to confirm, for the three metropolitan retail shops, can they also take on registration? Can they take on the registration? Yes. I'm sorry. Yes, certainly they can. Yes. Yes. I mean, look, 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 IDW there. And 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. And just on that, once you're live, I think there will be a great scene that defines into your doors. So what's the early guys strategy going to be? Is it going to be TV, radio, digital Facebook or even buses, for example? Yeah. Obviously, if it's regarding 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. But 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 the reason 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. And 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 Flange All and DraftKings, and that PointsBet is here. And again, that's not something we've been able to do on a large scale in New Jersey, and that's one of the reasons we are confident in our ability to get our target market share in those states. Great. Just one last point on Mino. I think there's some ambiguity in terms of the branding rules in that state. So, you know, Casino Queen, for example, recently revalidized masking. So I just wonder, in terms of points by strategy, what's the name going to be for the brand? Is it wholesome recalls, maybe co branding or just points back? It's definitely points there. The rule issued by the Illinois Gaming Board around branding talks about co branding. And it's similar, as you know, Ellis, to what's been happening successfully in Pennsylvania. So any brand recognition for locally advertised assets and on our app, it sets will contain sort of both logos, but it's definitely the PointsBet Sportsbook. And look, the state of Illinois recognizes that national players such as us, we're going be doing national marketing and that will be under our national brand. And so 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. And my next question is also a follow-up in light of the MLB leak outbreak. So in FY one, this is going to be the new normal for a while being spotting runs on and off, possible suspension. You touched on, you know, committing to marketing dollars. So 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 OPACs? How agile is contract going to be in terms of like rolling the punches with this? Yes. There's not much I can add there, Alas, 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. I mean, obviously, digital marketing, we can turn it up and down very, very quickly. But some of the brands and sponsorship, etcetera, 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 profit and reduce capital for The U. S? So look, we probably will 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. And if we can spend money efficiently and maintain that positive relationship, then we'll keep spending. The Australian business has produced two positive EBITDA quarters. That gives us great confidence that we have some choices around Australian businesses, just how much we can invest in the Australian market. And hopefully, it won't be at the expense of our capital being allocated to The U. S. Your next question comes from Rohan Sundram with MSG Financial. Good morning, Sam and Andy. Thanks, Elyse. 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. And 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. But the momentum has continued, which has been good. Okay. Great. And last one for 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? Yes. 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. So the fact that sports only started returning and when we talk about sports returning, we're only talking about Australian sports. We're not talking about the massively popular U. S. Sports. I mean NBA basketball is the biggest betting sport in Australia. So these U. S. Sports have an impact, even though it would otherwise be the downtime in U. S. Sports at the moment. But with this quarter, there's two main factors that I'll talk about. One, the fact that ratio turnover was a greater share than it would otherwise have been, if not for sports suspensions. And two, there has been some favorable results. There's no doubt about that. But 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. So you've got you've sort of got all of those factors working together. Your next question comes from Desmond Sow with Goldman Sachs. I just got a couple of really quick ones, perhaps asking Roland's question in a slightly different way. Obviously, very impressive trends across the net win margins. And as you sort of alluded to, sort of the move from sports to racing. But I just want to pick up on a comment on the call. Think you mentioned that month on month that trend has been increasing, really came to sort of perhaps focus on how the margin and the net win margin looked in June, particularly when you had AFL and NFL restarting. And then I guess how we should think about it being shut into July with racing somewhat sort of easing and then you've got Avalanche Sports coming back online? Yes. So we haven't released June specific numbers. So I won't talk to that specifically. But we did make the comment that we've continued our run of record net win results. So June was bigger than May. May was bigger than April. And 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 for most parts of Australia, I think that's pretty encouraging for going forward. Yes. Okay. That's great. And then maybe just a question around, I suppose, the theory that potentially there may be play 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 US with the four key sports coming back on in The US over the near term? Yes. I mean, look, you've got all in Australia, as I touched on, we're going to have the Aussie sports, the American sports and racing all going at once, and they normally get spread out. So we expect to see really heightened activity. And there's still some restrictions, especially in Victoria, on the way people can spend their discretionary entertainment dollar. So 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. So that's on track for September. That works out well. We know our clients. We know what they like to bet on. So 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. Your next question comes from David Hebris with Macquarie Group. Look, a lot of questions I was gonna ask have already been done. So, I mean, firstly, just trying to get a bit more color on the Aussie market. And I I guess trying to understand sort of consumer behavior on a sequential monthly basis, if you can talk to it around sort of bet sizing frequency. Has that changed more so as offline has reopened and you've got more subsidization of consumer activities available? Or do you still see 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, was the people that were betting through the period where there was no Aussie sports. There was transfer from sport to racing, but they're your keen upon this. But as the mainstream appeal sports return, you naturally expect your actives to go right up. So there's more people betting in a month, but they might be the type of people that only have one better week or two better weeks. So some of your per active statistics would naturally come down. And similarly, as we've spoken about before, then yield should come down because sports should make up a larger portion of the turnover. So 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. And 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? No, think there's definitely players out there that U. S. Players. They're the sports that appeal to them and that's when they bet. And they may bet a little bit when those sports aren't there, but they will probably bet when their favorite sports are available. So 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 steps come down. Got you. And just one last question. Just on the shift between off line 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? No, that's been a positive. During, let's call it, the full lockdown period, as I said, two really keen punters that are playing regularly. But there was also an element of transfer and there was that element that there was no other entertainment options in town. So even some of my friends who really only bid on Melbourne Cup Day were having a bet occasionally on a Saturday. So you're seeing that it's a consistent message. You're seeing the average client being less, I suppose, into that really committed team player, all the way down to the more recreational. But generally speaking, the quality of clients at PointsBet is able to attract and retain now is far better than it was twelve months ago, and that's on the result of an improving product. Yes. 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. Yes. Okay. Great. Thank you. Your next question comes from Joseph Sembonga, a Private Investor. 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 in relation I had two queries. First one in relation to the partnership with BetMakers. I think that they have recently acquired seven new tracks on being Fair Enough Park in Illinois. I know you just made reference to essentially partnering with them. So I'm unsure whether or not you're maybe looking into extending your partnership with that makers from the Monmouth Park Track in New Jersey to extend it to Fairmont Park, should I? And the second query was just in relation to I guess, you mentioned the four major sporting codes in The US. Obviously, you've got Allen Iverson as the face of this NBA, also a partnership with another person from NFL. Obviously, a partnership with Detroit Tigers, but there's nothing seemingly in the works for NHL. Just wondering whether you have any intention to this for some kind of market penetration strategy into that code. Yes. Thanks, Joseph. So first thing in terms of bet makers, they started by signing Monmouth Park as a track that they will allow, for example, PointsBet to bid on subject to regulatory approvals. Their aim, you touched on, they've been gone further, secured more tracks. And so 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. So they're I suppose they're doing a bit of a role of educating the marketplace in The U. S. The track's about taking on fixed odds betting because they're all pari mutuel at the moment. And so 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. But the first, obviously, thing that needs to happen is the regulatory approval in each state. So yes, 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, but 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. So yes, that may be an NHL player, may be an NBA player. But what we did with Alan, for example, was target to that New Jersey market where he had really strong recognition and high appeal. And so 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. So obviously, you had the Haskell event at New Jersey in that recent week. So is your offering available for that weekend? No. No. So the BitMakers the Haskell is the big event for Monmouth every year and BitMakers were hoping that perhaps there'd be a product to be live by that date. But no, it's still waiting 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. Your next question is a follow-up question from Don Cassidy with JPMorgan. Thanks, everyone. One more question. So you've mentioned being disciplined and targeted with your media and marketing spend in specific states. But on a relative basis, your competitors are planning to do the same. They've raised a little over US2 billion dollars 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 USD 100,000,000 on the balance sheet? Yes. Thanks, Don. Look, my aim for the business has always been that the business will always have enough cash to execute upon its aspirations. As we 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. And yes, the pace at which those states legalize and our aspirations of business will dictate how much cash we need. There are no further questions at this time. I'll now hand back to Mr. Suneil for closing remarks. Thanks, everyone, for your time. Look forward to speaking in the future.