Earnings Call: H1 2020

Feb 26, 2020

Good morning. I'd like to thank you for joining this call for the Pointsworth Holdings Limited Half Year twenty twenty Results. This is Sam Swanell, Group CEO, and I'm joined today by our CFO, Andrew Melor and Eric Foote, U. S. Chief Commercial Officer, joining us from New York. Today, we will talk through our investor presentation, which was lodged with the ASX this morning, together with our half year financial report, and provide some commentary of our achievements since listing. All figures in this presentation are in Australian dollars unless otherwise stated. Turning to Slide four. I'm thrilled with our progress in all key metrics, including turnover, active clients, net win and U. S. Market access. Compared to the six months to thirty first December twenty eighteen to be referred to as the PCP, turnover was up 154% and net win was up 124 to 29,800,000.0 Demonstrating our significant progress, the net win for the half exceeded net win for the full year to thirty June twenty nineteen of $28,200,000 Growing our active client base in both Australia and The U. S. Will be a key factor in our ongoing success, and a PCP increase of 123% to 102,000 active clients provides great confidence. As shown on Slide five, the company now has market access in 12 states, representing USD 5,200,000,000.0 of sports betting gross gaming revenue, up from two states, which represented USD 1,900,000,000.0 as at thirty first January twenty nineteen. As evidenced by Slide six, PointsBet is well positioned for future growth. During the reporting period, the company saw strong net revenue growth and importantly, recorded its first positive net revenue half in The U. S. We also achieved record transactional volumes to finish the year strongly, with over 4,000,000 bets taken during October, November and December. I've consistently stated that the caliber of the PointsBet team is a strength of the business. The areas of technology, media, governance and compliance will be key indicators for sustainable long term success in both Australia and The U. S. I am pleased that during the reporting period, we have added key talent in these areas with the appointments of Becky Harris, the first ever Chairwoman of the Nevada Gaming Control Board and former Nevada State Senator as a nonexecutive director Manjit Gombrasinghe as President, Product and Technology, formerly Chief Technology Officer of Aristocrat Leisure Limited and Eric Foote, formerly CBS Sports Digital VP, as U. S. Chief Commercial Officer. These appointments, together with our existing experienced and dedicated staff, provide me with absolute confidence that PointsBet can execute on the opportunities which are ahead, especially now that we have secured a market access footprint to 12 states and are bullish on adding more. I am pleased that shareholders share this confidence with the company successfully raising AUD 122,000,000 in our November 2019 capital raising to support PointsBet's continued growth. As at thirty one December twenty nineteen, the company had a corporate cash balance of $147,900,000 I will now hand over to our Chief Financial Officer, Andrew Mellor, to run through the detail of our results before providing some further comments on the growing U. S. Opportunity. Thank you, Sam, and good morning, everyone. Before I talk to the group's statutory and normalized results for the reporting period, I'd like to walk you through the trading performance of the Australian and U. S. Businesses over the period, as detailed in the previously announced Q1 and Q2 Appendix 4Cs released in October 2019 and January 2020, respectively. Turning to Slide nine. The Australian business continues to build growth and sustainability, with betting turnover increasing by 67% on the PCP to $349,200,000 Gross win margin of 10.9% resulted in a gross win of $38,100,000 up from $21,800,000 on the PCP. Significantly, net win margin improved from 6.3% in the PCP to 7.8%, generating a net win of $27,200,000 for the reporting period. Unlike in The U. S, in Australia, waging operators pay a federal goods and services tax of 10% on net win. And as a result, net revenue for Australia for the reporting period was $24,800,000 Turning to Slide 10. It is clear that in The U. S, momentum is building. Betting turnover for the half was 183,900,000 not an insignificant achievement from a standing start in January 2019, winning at a gross win margin of 5%, which, as previously communicated, is a fair gross win assumption for our U. S. Business. Net win for The U. S. Business in the reporting period was $2,600,000 resulting in a net win margin of 1.4%. September to December is an important acquisition period for the company with use of promotional bets, key marketing lever, and this, in conjunction with our high staking client segment, led to a reduced net win margin. I'll now bring your attention to Slide 11. As part of our Q1 and Q2 4C announcements, we provided a detailed breakdown of our U. S. Business by state and business area, being New Jersey Digital, high staking clients and Iowa Digital and Retail. This slide consolidates both those announcements into the respective performance for the reporting period. Now turning to the company's reported results on Slide 12. I'll be talking to our normalized results today. However, there is a reconciliation from the statutory results included in the review of operations and on Slide 44 of this presentation. For the reporting period, PointsBet reported a net revenue of $27,400,000 a growth of 126% versus the PCP. While the Australian business has been the primary driver of this growth as the team executed our strategy of client acquisition and retention leading to revenue generation, it is pleasing to report that our U. S. Business represented 9.6% of the group's total net revenue for the reporting period. Australian gross margins have remained consistent on a PCP basis despite the introduction of the broader state point of consumption taxes in January 2019. As our U. S. Business grows and New Jersey moves from launch phase into execution phase, we expect our U. Gross profit margin to improve as the business reduces promotions as a percentage of gross win and grows its net win in absolute terms. Half year ended thirty one December twenty nineteen was a period of continued focus on establishing a platform for future growth. This was characterized by continued investment in market access, our scalable cloud based technology platform and product, our people and executing on our marketing strategy to efficiently acquire clients. In The U. S, our marketing expenses on average have been tracking at approximately USD 1,000,000 per month, predominantly focused in New Jersey as well as building brand recognition across other relevant states with our free to play offering. In Australia, the reporting period represented an important acquisition period for the company, including the spring racing carnival and the NRL and AFL finals. And as a result, the company applied a great percentage of its annual marketing budget over the past six months. As a result of this investment and our focus on marketing ROI, we are pleased to see growth in both our U. S. And Australian registered clients during the reporting period. It should be noted that these numbers exclude our free to play database, which is steadily growing outside the states in which we are operational. Employee benefits expense unsurprisingly increased over the reporting period across all areas of the business as the group continued to build a world class team. Specifically, headcount at the 12/31/2019 grew 76% from the thirty first December twenty eighteen with 192 total employees, split between 111 in Australia and 81 in The U. S. The normalized EBITDA loss, excluding significant items, of $28,400,000 reflect the investment we have made over the reporting period. It is pleasing to see that net revenue continues to grow whilst we continue to make the investment to take advantage of the burgeoning U. S. Betting opportunity that is only going to happen once. For completeness, the statutory EBITDA loss was $29,300,000 for the reporting period. Turning to Slide 14. I now wish to speak to our business segments. On a normalized basis, the Australian Trading business segment recorded net revenue of $24,800,000 and an EBITDA loss of $3,400,000 in the reporting period compared to the EBITDA loss of $1,700,000 in the PCP. As noted earlier, July to December represented an important acquisition period for the company. And as a result, the company applied a greater percentage of its annual Australian marketing budget during this period. Given this fact, we expect a lower absolute value of marketing spend in the second half of the financial year, which should deliver a positive EBITDA in the Australian Trading segment for the second half of the financial year. On a normalized basis, the U. S. Trading segment recorded net revenue of $2,600,000 and an EBITDA loss of $21,900,000 in the reporting period. We've increased our U. S. Staff to 81 at the thirty first December twenty nineteen, and U. S. Marketing expenses on average have been tracking at approximately USD 1,000,000 per month, predominantly focused in New Jersey as well as building brand recognition across other relevant states. The Technology segment derives its revenue from licensing fees charged to the Australian trading business and the group subsidiaries in The United States. Please note this revenue is eliminated in the company's consolidated results. On a normalized basis, the EBITDA loss for the Technology segment for the half year ended thirty one December twenty nineteen was $2,100,000 Corporate administrative costs cannot readily be allocated to individual operating segments, and the normalized EBITDA loss for the Corporate segment for the half was $1,000,000 Turning to the balance sheet on Slide 15. The balance sheet was strengthened over the reporting period with the group having net assets of $185,000,000 as at the thirty one December twenty nineteen. Our intangible assets predominantly comprised our capitalized U. S. Licenses and market access assets as well as a result of both equity and cash outflows as well as the capitalized cost of the development of our betting platform. During the reporting period, the investment in development of our betting platform and licenses and market access saw additions to intangible net assets, which included noncash capitalization of the share and the option issuance to Penn National Gaming as well as payments to other market access partners. As has been well documented, the company completed a successful capital markets transaction in November 2019, raising $122,000,000 As a result, the company had $147,900,000 of corporate cash at the end of the reporting period. PointsBet does not have any borrowings. Effective the July 1, the company adopted the new leases standard AASB 16, and as a result, recorded a right of use asset on the balance sheet of $9,600,000 and a corresponding lease liability of $9,700,000 in relation to operating lease commitments. Please note that the first half full year 2019 has not been restated to reflect the changes in the accounting standards. Turning to slidesixteen.net cash flow used in operating activities in the year ending thirty first December twenty nineteen was 23,000,000 Net cash outflows from investing activities was $12,600,000 and net cash inflow from financing activities was $118,300,000 as has been previously detailed in the Appendix 4Cs lodged over the reporting period. The company continues to appropriately plan for the requirements and demands presented by The U. S. Sports wagering opportunity, and future cash flows will be correlated to the timetable of future U. S. State rollouts. I'll now hand back to Sam for some further comments. Thanks, Andy. It truly has been a great period of continued progress for PointsBet. Moving to Slide 18. PointsBet continues to innovate in The U. S. Market. In January, we released a new version of our app in New Jersey. This lightning fast app includes a range of user experience enhancements, including a fantastic bet slip and quick parlay builder. We remain the only operator with points betting and one of only a few with a Spanish language site to service the 13.4% of the American population that speaks Spanish. Overall, our app is widely recognized as being amongst the best in The U. S. A, which is encouraging given we have a stream of additional improvements still to come. From a marketing and PR perspective, our team that came up with the Karma Committee and Bad Bead Index produced another acclaimed initiative in Fade Revelle, as seen on Slide 20, where we partnered with the Action Network's Darren Ravel to create engaging content for a huge audience, which included his 2,000,000 plus Twitter followers. We've continued investing in building our brand and free to play database outside of New Jersey. Not only does this mean that PointsBet will enter new states with existing brand recognition, but it'll also assist in PointsBet's market access strategy as we expand across The United States. The results are clear, with PointsBet now having market access deals in place for 12 states. I was thrilled to announce earlier this month that PointsBet USA entered into a multiyear partnership with the NBA, making PointsBet an authorized sports betting operator, representing PointsBet's first partnership with a professional sports league in The U. S. This agreement does not extend to Australia. As part of the partnership, PointsBet will integrate the first ever win probability metric across key NBA platforms, including on nba.com and NBA social media channels. Powered by PointsBet, the win probability metric will provide fans with real time insight toward projected outcomes, utilizing the same analytics and statistics that fuel PointsBet's sports book. Additionally, PointsBet will have access to official NBA betting data and lead trademarks across PointsBet's digital betting platforms. Transactions of this nature highlight the growing reach of PointsBet in The United States and the confidence shown by some of the world's most well known sporting organizations in the PointsBet brand. As shown on Slide 21, early this month, Miami hosted the twenty twenty Super Bowl when the Kansas City Chiefs beat the San Francisco 49ers in a gripping contest. The PointsBet technology platform was outstanding before, during and after this high traffic event, taking 67% more individual bets on the Super Bowl in New Jersey and Iowa than taken during the two thousand and nineteen AFL Grand Final, one of Australia's largest sporting events. This helps illustrate the potential size of The US opportunity. Turning to Slide 25. PointsBet is pleased to announce that the company has embarked upon the creation of its proprietary online casino platform in anticipation of launching the company's first online casino product in select U. S. Jurisdictions. Additionally, PointsBet has identified best in class game suppliers to support the launch of its casino product with top quality licensed casino gambling content in addition to PointsBet's own proprietary content initiatives. PointsBet anticipates initially launching online casino operations through its current market access partners, where PointsBet holds an option to operate online casino pending legalization of the activity. PointsBit is also in ongoing discussions with numerous parties regarding the opportunity to launch online casino operations in additional U. S. States where such activity is or becomes permitted. The established New Jersey online casino market drove over USD $481,000,000 in total revenue in calendar twenty nineteen, representing nearly 61% year over year market growth. The online casino market has been heavily bolstered by the launch and proliferation of regulated sports betting. PointsBet notes that the sports betting operators that have won strong market share in New Jersey have also won significant online casino market share, evidencing the size of the cross sell opportunities across The United States for those with scale given the significant synergies available. PointsBet's new online casino vertical is expected to generate new revenues for the organization as the company continues to expand its footprint across The United States. Online casino, also known as iGaming in America, addresses a significant incremental revenue opportunity in The U. S. While online casino is only currently legal in a small number of U. S. Jurisdictions, PointsBet's strategic approach to the build of this new business vertical represents an effort to future proof the company's casino operations for scalability and sustainability in the long term. In terms of potential new products in The U. S, we are also encouraged by the recent developments regarding the distribution of fixed odds horse racing content in New Jersey. Experience from Australia points to a significant opportunity for PointsBet should access to local and international racing offerings expand across U. S. Jurisdictions. This will be particularly significant in the periods of low sports betting opportunities where next to jump racing events can fill the void. Now to Slide 27. We are on track to launch in Indiana shortly, in advance of the huge NCAA March Madness tournament. This will be followed by retail and online launches in Illinois, where we have the advantage of four Chicago based in person registration venues. Online launches in Colorado and Michigan, pending the relevant state regulations, are also on track for 2020. This would result in PointsBet being operational in six states by the end of the calendar year, with a total estimated sports betting market size of USD 2,600,000,000.0 per annum by 2023. I'm excited by the opportunity to launch in Indiana, the seventeenth largest U. S. State by population. As out on Slide 28, Indiana represents an opportunity for PointsBet to establish ourselves as one of the earliest operators in the state, with only three operators currently having a meaningful market share. The favorable state tax rate of 10%, ability to access focused television advertising and existing brand recognition will allow Pointsbet to leverage learnings from our existing U. S. Operations and successfully complete compete for market share. I'm equally excited about the opportunity in Illinois. As can be seen on Slide 29, the benefits of our optimally located premises Hawthorne Racecourse, just 13 kilometers from Downtown Chicago, together with three PointsBit branded off track betting establishments throughout the Chicago Metropolitan Area, will provide a significant strategic advantage following launch as Illinois has legalized an in person sign up period for the first eighteen months of sports wagering operations. The ability to gain early market share will be a key indicator of ongoing success in a state with an estimated annual sports betting gross revenue of USD $784,000,000 in 2023. The addition of planned casino operations at Hawthorns Racecourse in 2021 will only enhance the benefits of this prime location. I'd now like to introduce and hand over to our U. S. Chief Commercial Officer, Eric Foote, to provide an overview of The U. S. Media market. Thank you, Sam, and good morning, everyone. As can be seen from slide 34, The US media market has numerous participants, each with their own nuance and strategy, but all focused on benefiting from the nascent sports wagering opportunity that recently presented itself. The US media landscape is ever changing with new disruptors, more innovative products, and larger than ever before distribution platforms. Additionally, digital media has surpassed traditional media as the medium of choice for many US consumers. As a result, the cord cutting universe continues to grow with time spent watching pay television declining. By the end of twenty twenty, cord cutting households will surpass 25,000,000 homes, approximately 20% of The US. Today, there are countless video distribution models in The US due to the growth of smartphone and connected TV users. The traditional broadcast TV companies understand the streaming shift is underway. However, the traditional linear distribution business still has many years left. During 02/2019, pay TV households in The US amassed 86,500,000.0 with 96 of the top 100 live televised sporting events airing across NBC, CBS, ABC, and Fox national networks. Over the past ten years, the number of cable, national cable, and regional sports networks have ballooned. Professional sports leagues and colleges have created an abundance of live viewing options for The US sports fan. The national cable channels are distributed across the full US footprint based upon carriage deals with cable and satellite companies. Regional sports networks are dedicated channels for select metro areas known as DMAs that may run beyond state lines. Today, there are over 50 regional sports networks in The US. More recently, the tech giants in The US have entered the sports landscape and disrupted traditional distribution deals across most major sports leagues, including the NFL, MLB, NBA, and the PGA Tour. Amazon, Google, Facebook, and Twitter all have secured live sports content partnerships in The US and will likely continue to secure additional rights in the years ahead. As the traditional broadcast companies look into their futures, they have become more focused on managing a smooth transition into digital media. Therefore, they are leveraging existing revenues from linear to subsidized digital efforts. This has resulted in the creation of several direct to consumer subscription video services such as ESPN plus, NBC Sports Gold, and CBS All Access. Companies are rapidly diving headfirst into these services to pursue a Netflix style strategy of owning their customers for future cross sell opportunities. On a smaller niche scale, a few sports leagues have also created digital only branded single service platforms. Their primary goal is to capture revenue through premium content subscriptions while taking advantage of cord cutters across the country. The WWE is just one example of a successful entrant into this market. As can be seen from slide 34, there are a significant number of opportunities for strategic media partnerships for PointsBet. As we heighten our focus on media partnerships in 2020, we've established a disciplined approach for evaluating strategic partners who carry an elite level of brand reputation, own a diverse portfolio of sports rights, and are aligned with our goal of driving audience into first time sports bettors of PointsBet. Thank you for your time today, and I hope this has provided some helpful insights into The U. S. Media market. I now hand back to Sam. Thanks, Eric. Moving to Slides forty and forty one, I will make a few final comments before opening up the line for questions. In summary, as we've previously referenced, the PointsBet Australian business, a robust and growing business, provides a clear blueprint of the model which will be rolled out in The U. S. As such, we are very pleased that at the conclusion of our second calendar year of operations with the points betting, fixed odds racing and fixed odds sports products, the latter launching in just March 2018, we have achieved outstanding year on year growth in all key metrics, including active clients, turnover and, importantly, net win. This highlights the company's in-depth understanding of the critical relationship between cost per acquisition and lifetime value of acquired clients and the pathway to profitability. As we move into new states in The U. S, our operational learnings from the New Jersey market and the continually improving technology stack will provide greater efficiencies and effectiveness when launching in additional states. Company is pleased with its market access achievements to date and continues to assess future opportunities, which will complement the group's existing operations and market access partners. The company has appropriately planned for the requirements and demands presented by The U. S. Sports wagering opportunity and has been building the global capabilities for the team in preparation for the next phase of The U. S. Strategy. We are excited by what we have achieved globally as we know there remains significant upside across all areas of the business that will further solidify PointsBet's position as a market leader. The capability of the PointsBet team is clear to see. From being virtually unheard of twelve months ago, the company now has a reputation for excellence in strategic and operational execution. The legalization of The U. S. Sports betting and online casino markets is only going to happen once, and the PointsBet team is better placed than ever to parlay its management excellence and in house tech and product into long term success. I'm happy to take questions. Your first question comes from Larry Gambler from Credit Suisse. Please go ahead. Thanks, guys. Well done on the presentation result. Just in terms of your media, what do you find where are you sort of allocating the bulk of the budget to? I imagine it's digital. And what do you find is the, most successful channel for converting, say, from an ad into a sign up? What how's that process? And, where's the most successful channel for doing that? Larry, yes, I think in terms of the channels that we're using, we've been we've spoken about the fact that in New Jersey, we are somewhat limited because the New Jersey media market takes a lot of content from New York and Pennsylvania. So to spend money effectively, for example, on TV, is basically impossible. So the New Jersey strategy has been more digital and direct response than you would otherwise want in a more balanced marketing strategy. That's one of the reasons why we're excited about Indiana, because it's a far cleaner DMA, as Eric termed it. Media market is far cleaner. And for our launch there very shortly, we'll be including, virtually for the first time, a more robust overall marketing strategy, which will include TV. And when you're building a brand, that's an important element. I mean, the funnel normally starts with your brand building channels, your TV, your radio, and then the funnel ends. And where you get the strongest conversion is your direct response channel, so your Google AdWords and your Facebook. But you've got to build some brand recognition to ensure the effectiveness of those, conversion channels. So, you know, there's no doubt that the direct response digital channels is where you see the final conversion, but those mass media assets play a big part in, the overall strategy. Your next question comes from Des Searle from Goldman Sachs. I've got a couple of really quick ones. Just firstly, just around your comments with regards to the changes that you made through Jan and Feb. Just wondering if you have any sort of metrics or numbers that you can wrap around how that sort of led to improved turnover and then customer acquisition? And then the second question is just around the opportunity ahead for iGaming. Just came to sort of get some more color around the timing of that opportunity and how we should think about cost and investment profile for that going forward? Yes. Okay. So in terms of the app, we've done some internal testing, and there's been there's some sites that you can go to that sort of measure speed of uploading pages and the like. Anecdotally, this isn't sort of verifiable information, but we believe our app is twice as fast as any other app in the marketplace. From a product perspective, I mean, takes time to sort of have its benefit from an acquisition retention, but I think we've included some client quotes in the slide presentations that's certainly noticeable, the quickness and the speed. I think in terms of margins and the like, one area where we've under indexed a little bit has been in our parlay or multi turnover as a percentage of the market. And with the new bet slip and the parlay builder, which we believe is the best in the market, we are we're seeing some early signs of some improvement in that percentage as a total of turnover. So I think overall, it's still very early days of the impact of the app, but we know from the Australian experience that speed and UX is vitally important, and we've always prioritized that near the top of the list. So we're thrilled that we believe it's the fastest and the best user experience out there. In terms of the iGaming opportunity, I think the reference point is The U. K. Market. The U. K. Market has traditionally been able to offer iGaming side by side with sports betting, and it's actually a larger vertical in The UK than it is than sports betting. Look, sports betting is definitely more widely accepted as a form of gambling. Obviously, it's a very mainstream activity. And we don't expect online casino to be rolled out in states as quickly as sports betting will. But there's enough evidence now, New Jersey, Pennsylvania, West Virginia, Michigan, for example, that have introduced it or are in the process of introducing it that. A portion of the states that legalise sports betting will also have online casino. The attraction for us is we won't necessarily change our positioning in the market to be now being an online casino operator. We'll still be using sports betting as the acquisition. But as seen by the success of DraftKings, for example, in the New Jersey market, that can lead to a fantastic cross sell opportunity, whereby your marketing dollars go further, I suppose, the lifetime value of those clients. And for us, for example, taking New Jersey as an example, we are at a little bit of a competitive disadvantage by not having that product, because if a product, if a client likes playing some blackjack or some roulette as well as their sports betting, that's something that we don't currently have. There is a level of investment. It's not huge. We're building the product ourselves, and we're doing it very cost effectively, but we'll produce a fantastic product, a bit like we've done with our sportsbook platform. As I said, from a marketing perspective, really nothing additional. There'll be a small additional increase in terms of some operational staff, but really, the reason that we're excited about this opportunity is that it is it really is incremental revenue with not a huge amount of additional cost. Obviously, you've to pay your taxes and your fees, etcetera. Your next question comes from Alice Lai from Credit Please go ahead. Hi, Sam, Andrew and Eric. I would like to start by talking a little bit about Colorado. So the Colorado division gaming confirms that your partner, Double Eagle, has been granted a master license for sports betting last week. So first of all, congratulations on that. Thank you. So would Ponsmart be, on track to start operations from, say, May 2020? I believe that's the time line the state is aiming for operators to go live. Yeah. Thanks, Alice. So I think our road map currently looks like this. So Indiana, very shortly, in time for March Madness. We've then prioritized Illinois because of the strategic advantage that we believe we have from an in person sign up perspective, and that's two channels because we're rolling out retail in four venues as well as online. And then it will likely be Colorado after that. So the only guidance that we've given is that Indiana this quarter, very shortly, and then Illinois, Colorado and Michigan all completed, we plan to complete by the end of the year. So I'd say it's unlikely May. That will probably come around a bit quickly, and we'll be prioritizing Illinois over Colorado. But we won't be far behind. And I've previously made a comment that one of the things that we're putting a lot of emphasis on is our ability to get live quickly in states. And from a technology and product perspective and from a property and licensing perspective and operationally, I think we'll really hit our strats. We're still playing catch up a little bit, but I think by the end of this year, early next year, we plan to be one of the companies that can roll out more swiftly than our competitors due to the fact that we do control our tech stack. Okay. Sure. So in Illinois, I understand that there are currently more applications for licenses than the gaming board has issued to for temporary sports betting license. So how's Ponsberg positioned in terms of securing license in that state? Yeah. No, we're going through the process at the moment. The parties, and I know two of them off the top of my head, that have been switched us out of the gate, Rivers and Churchill Downs, they're both, I suppose, incumbent operators in the state. So they have existing infrastructure, existing licenses and existing relationships with the IGB, etcetera. So those sorts of groups always got to be a little bit quicker out of the gates. But our licensing probity process, subject to obviously getting that ticked off, won't won't be a factor in slowing us down. It's about operational readiness for us. Okay. Jumping to Indiana, if I may. So on Slide 28, I just want confirm that in the current state of play, that's online operators only because I think William Hill has a retail presence in the state. Yeah. I mean, I don't know if No, William Hill is Yeah, that might be online. When we look at the market share, though, you can basically see that Fanjul and DraftKings and William I don't think William Hill are licensed in that state, but if they are, it will definitely be retail only and not online. I think the thing about Indiana is that for fully mobile states, as we've seen in New Jersey, we expect it to trend towards 90% plus of digital. While Kentucky and other states that border Indiana don't have legal sports betting, they'll benefit from some people creeping over the border to place a sports bet. So, yeah, we're excited by Indiana and the fact that we'll be the fourth online to launch, it looks like, and one of those four that has launched so far hasn't really had an impact. That's pretty exciting. Okay, sure. Just last question from me in that state, perhaps for Andrew. So the marketing spend for Indiana, along with other expenditure in terms of launching, that would have been included in the cash flow projections for Q3. Is that correct? That is correct. Yes. The cash flow projections will include the initial marketing in Indiana. Thanks, Alice. Thank you. Your next question comes from Damian Williamson from Bell Potter. Please go ahead. Hi, guys. Just a question on the New Jersey racing product and the fixed odds offering, which I think was aligned with the announcement from BetMakers. Just can you sort of outline how you see that working? And also, what you also see in terms of getting media to potential bidders, and what's media offering on showing rising to The U. S. Consumers at the moment? Yeah. Hi, Damien. Yeah. I mean, I think we've been cautiously sort of waiting for some movement on fixed odds horse racing in America. It's a very complicated environment. I just need to say that up front. Effectively, the horsemen in America who control their content, their products, need to agree to having fixed odds bet on their products. So that's the first step. Monmouth Park in New Jersey, which is the main racetrack in New Jersey, has agreed for fixed odds betting to begin on their product. And the expectation is that other tracks will follow. I mean, the reality is, is that U. S. Horse racing isn't necessarily booming, and it's a little bit like Australia many years ago when fixed odds racing came in with the corporate bookmakers, and it really boosted revenues for the racing industry. The second part is the regulator in each state needs to approve racing as an approved product. So everything we bet on has to go to the regulator to say, Are we allowed to bet on that soccer league? Are we allowed to bet on that sporting event? So they have to approve racing. Now we haven't seen anything official that says that, but the indications are that, that is forthcoming. So then it will be dependent on other state regulators also approving fixed odds racing as an improved product. And it's not just racing betting on their own content, but the opportunity also to take international content into America and have Americans betting fixed odds on content from other countries around the world. So yes, an opportunity, it's going to take a little bit of time, but obviously, we have great expertise in fixed odds horse racing bookmaking. And we have the systems and processes in place, and we feel confident that we could make a go of it. Terms of media to acquire those clients, again, the New Jersey market is a little bit of a challenge, as we've spoken about. We would just have to, I suppose, adjust our approach a little bit to try and target those clients that we know have an interest. But I think the cross sell opportunity, as we've seen from Australia, I mean, the growth in Australian horse racing revenue and turnover, a lot of that comes from the fact that the bookmakers do a very good job of acquiring clients on AFL and NRL, and then introducing them to this product, and that's sort of what we would look to do in America. Okay. And just another question on your your marketing. You you mentioned earlier that your marketing was, you know, aligned with with the ramp up in the NFL season and and the AFL and NRL finals here. Did you see your marketing expenses ramping up as well when you launch in Indiana, or do you sort of see that coming back a little bit in the second half this year? So Australia will be consistent year on year. I think we've communicated pretty wildly that we spent about $16,000,000 in Australia last year, and this year will be very similar. So although we've front ended the Australian spend a little bit, we certainly Australia will be steady, as we've previously advised. In terms of Indiana, the intention would be that it will be additional spend. We want to keep our spend going and keep growing our market share in New Jersey. Now where, how much that spend is, is still to be determined. As we've talked about, we apply a disciplined approach. We go in there with some aspirations of a certain level of market share that we want to acquire, and we spend marketing dollars that will lead to that sort of market share. But it's iterative. If things are working or not working, if they're working and we're acquiring clients for cost per acquisition that we believe is a positive equation, we will spend more than perhaps initially planned because that would be an indication that there's small market share up for grabs. Conversely, if we go in there and the cost per acquisition is high, well, then we'll pull back a little bit on our marketing share, marketing spend. So we will always take a disciplined approach. If there is a situation where a particular state is extremely cost effective from an acquisition perspective, could that mean that we take spend from certain states and prioritize that state? Yes, it could. Okay. That's all for me today. Thank you. Thank you. Your next question comes from Philip Chiperdale from Earning App. Please go ahead. Most of my questions have been answered. Just wanted to circle back to the iGaming opportunity. Is it fair to assess that a state like Michigan is probably the most likely one to see first revenues for that business for you guys? And then secondly, just as to timing, is this a sort of FY 'twenty one type of opportunity? Or is that too ambitious at this point? Philip, yes, I think Michigan is most likely to be first cab off the rank for us from an iGaming perspective. Michigan Online is looking sort of later this year, early next year. I think from our perspective, the most cautious guidance would be that we'll be ready to go by the end of this year. So if there's a jurisdiction that's ready, I think by the end of this calendar year, we'll have our products ready to go and be in a position to take advantage of that opportunity, whether that be Michigan or another state.