Earnings Call: Q3 2021

Apr 30, 2021

Good morning, and thank you all for joining the PointsBet Holdings Limited Q3 FY 'twenty one Business Update and Activities Report. This is Sam Swannell, CEO, and I'm joined on the call today by our CFO, Andrew Mello. This morning, I would like to walk you through the Q3 FY 'twenty one trading performance for the Australian and U. S. Businesses. Please note all numbers referred to are unaudited and in Australian dollars unless otherwise stated. Turning to Slide 4, I was very pleased with the performance of the global trading business during Q3. The performance compared to the prior corresponding period of Q3 FY 'twenty to be referred to as PCP was as follows. Turnover was up 2 36% at $905,200,000 gross win up 2 75 percent at 100,500,000 Net win up 246 percent at $64,900,000 active clients up 169 percent at 286,000 clients. Turning to Slide 5. It can be seen that our financial year to date being the 9 months to 30 March 2021 is tracking well across all key metrics, including net win, which is up more than 3 times the PCP. Over the past 12 months, we have launched in 4 new U. S. Jurisdictions. As can be seen from Slide 6, this has diversified our business to now be operating in 7 jurisdictions, including Australia. Now turning to Slide 7. As PointsBet continues to focus on achieving an Australian market share of 10% by 2025, the company executed a refreshed brand campaign featuring NBA MVP, Shaquille O'Neal. Leveraging such an iconic figure in global sport during the Ault and Racing Carnival and for the commencement of both the AFL and NRL seasons has continued to build the PointsBet brand across the country. The Australian Trading Businesses Q3 marketing expense was $13,500,000 resulting in active clients being up 90% to 158,041 compared to the 12 months to 31 March 2020. In the United States, the March quarter is an important acquisition period due to significant depth and volume of sports betting content. The company's U. S. Quarterly marketing expense of $33,300,000 resulted in active clients for the 12 months to 31 March 2021 of 127,470, a 4 61% increase on the 12 months to 31 March 2020. We have a constant focus on our cost per acquisition and we were pleased that first time better CPAs across all operational U. S. States for the quarter tracked below US500 dollars In Q3, PointsBet continued its targeted marketing investment in New Jersey, Indiana, Illinois and Colorado. We also increased marketing investment in Iowa following in person registration being replaced by remote online registration on 1 January and commenced marketing in Michigan following its January launch. Now turning to Slide 8. The Australian trading business continued its strong performance, ending the quarter with turnover of $423,200,000 up 137% compared to the PCP and net win of $38,200,000 up 147% from the PCP. Improvements were also seen in both the gross win margin and net win margin. A gross win margin of 12.9% was achieved up from 11.9% in the PCP, A net win margin of 9% was achieved, up from 8.7% in the PCP. The Australian trading business has seen improvement across a number of key KPIs as client behavior shifts to the higher margin multi segment. Improvements in marketing tech tools delivered enhanced acquisition and retention execution. The performance of the Australian trading business remains an excellent blueprint for PointsBet's aspirations in North America. As previously mentioned, during the quarter PointsBet announced the appointment of professional basketball champion and 3 time finals MVP, Shaquille O'Neal as its Australian Brand Ambassador. Shack has headlined the company's 2021 Australian brand campaign, which was rolled out across television, digital, mobile and social media. Professional basketball continues to be the largest betting sport in Australia and therefore aligning with Shaquille O'Neal is particularly exciting for the business. Turning to Slide 9, I will now speak to the U. S. Trading results for the quarter. The U. S. Business achieved a quarterly gross win of $45,800,000 compared to gross win of $5,600,000 in the PCP, with a net win of $26,700,000 compared to a net win of $3,300,000 for the PCP. This quarterly result partly assisted by a reversal of the short term negative variances experienced during the December quarter, predominantly in New Jersey. The U. S. Business also achieved a record quarterly gross win margin of 9.5% and a record quarterly net win margin of 5.5%. Pleasingly, the percentage of total U. S. Handle represented by the higher margin multi or parlay segment doubled in Q3 compared to the PCP. Q3 FY 'twenty one was a busy period for the U. S. Sporting calendar, including the conclusion of the NFL season, the continuation of the 2021 NBA season, the commencement of the delayed 2021 NHL season, as well as the NCAA March Madness Basketball Tournament. During the period, the company had a very successful Super Bowl. Importantly, unlike some of the company's competitors, PointsBet suffered no technical issues or delays during this high volume betting event. On 22 January 2021, PointsBet launched online sports betting operations in Michigan as part of the first wave of operators to launch in the state. This also represents the company's 1st tribal market access partner to go live. On 27 January 2021, PointsBet announced the appointment of Paige Speranek as a global brand ambassador. The former professional golfer and social media influencer has built a following of over 3,000,000 followers on Instagram and 7,000,000 across all social platforms, the largest of any golf personality in the world. Following the signing of Page, by the end of Q3 FY 'twenty one, PointsBet's U. S. Instagram page grew followed us by 5 times compared to the end of Q2, ranking the PointsBet page as second by the number of followers amongst all U. S. Wagering operators. On 26 March 2021, Penn National Gaming agreed to provide PointsBet with online, sports betting and iGaming market access in Pennsylvania and Mississippi, Mississippi being subject to enabling mobile legislation. Both online sports betting and iGaming are currently legal in Pennsylvania. The agreement expands PointsBet's United States sports book market access footprint to 16 states subject to the passing and enabling legislation and license act. PointsBet is operational in New Jersey, Iowa, Indiana, Illinois, Colorado and Michigan. Michigan will also see the inaugural launch of PointsBet's iGaming product. Subject to the timing of licensure, by the end of calendar year 2022, we are targeting to be live in 18 U. S. States plus Australia and Canada. Turning to Slides 10 and 11, I will now briefly touch on each state. New Jersey. New Jersey recorded a quarterly gross win of $23,100,000 at a gross win margin of 11.5% and a net win of $18,500,000 at a net win margin of 9.3%. This result was partly assisted by a reversal of the short term negative variances experienced during the December quarter. PointsBet achieved 6.9% market share in New Jersey for online handle during the quarter, finishing with 8.1% in March. With iGaming due to launch in New Jersey in June, PointsBet looks forward to closing the competitive disadvantage it has had in the New Jersey market. Illinois, PointsBet achieved 8.1% market share in February for online handle, up from 7% in January and 6.5% in December and demonstrating strong momentum on the back of leveraging the powerful NBC Chicago regional sports network. Illinois recorded a quarterly gross win of $12,200,000 at a gross win margin of 7.4% and a net win of $6,100,000 at a net win margin of 3.7%. On 22 January 16 March respectively, PointsBet launched retail sports wagering operations at the Crestwood, South Chicago area and Prospect Tides, North Chicago area off track bedding shops. As can be seen in the appendix, during the quarter, Illinois remained remote registration environment due to the emergency order. However, this order expired on 3 April. As a result, from the 4th April 2021, new clients of all online sports wagering operators in Illinois are required to register in person at the relevant licensed partners physical locations before placing online wages. As previously noted, PointsBet's strategic retail sportsbook locations, including the Hawthorne Racecourse located just 8.5 miles from downtown Chicago and the 3 off track betting shops in the Greater Metro Chicago area, 2 of which are operational, provides a significant competitive advantage in an in person registration environment. Indiana. Indiana recorded quarterly gross win of $3,700,000 at a gross win margin of 8.4 percent and a net win of 1,400,000 at a net win margin of 3.2%. In Indiana, PointsBet achieved 4.6% market share for online handle during the quarter, ranking as the 4th largest operator by handle for the quarter. Details of the company performance in Colorado, Iowa and the recently launched Michigan are set out in the quarterly update released to the ASX this morning. I will now hand over to Andrew Mellon. Thank you, Sam. Now turning to the Q3 FY 'twenty one Appendix 4C cash flow summary released earlier today, Please refer to Slide 12. At the 31st March 2021, the company's corporate cash balance was $328,000,000 The company has no corporate borrowings. Receipts from customers or net win for the quarter totaled $64,900,000 as previously detailed by Sam. Net cash used in operating activities in the quarter ending 31 March 2021 was $27,400,000 Cash outflows during the quarter include cost of sales payments of $25,200,000 non capitalized staff payments of $9,700,000 marketing payments of $45,100,000 and administration corporate costs and GST paid on net win of $11,700,000 U. S. Marketing payments grew quarter on quarter as the company marketed for the full quarter in New Jersey, Illinois, Indiana, Iowa, Colorado and Michigan. The March quarter is an important acquisition period in the U. S. With the Super Bowl and March Madness both occurring during the quarter and the growth in 12 month active clients from 68,000 at the 31st December 2020 to 127,000 at the 31st March was an extremely pleasing result. Net cash used in investing activities in the quarter ending 31 March 2021 was $4,700,000 the majority being the capitalization of our technology and product staff costs of $3,600,000 Now turning to Slides 13 and 14. I would like to provide some comments on iGaming, which is a key part of our U. S. Strategy. As can be seen on Slide 13, iGaming revenues have grown exceptionally since the repeal of Casper in May 2018. As an example, New Jersey Eye Gaming revenues grew at a CAGR of 25% from 2014 to 2018 with revenues having subsequently grown at 62% 101% in 2019 2020 respectively. We do note there were some benefits in 2020 as a result of COVID. The size of the opportunity is evidenced. As can be seen on this slide, across New Jersey, Pennsylvania and Michigan, 3 of the states which PointsBet has secured iGaming market access, iGaming revenues were 2.5 to 3 times sports wagering revenues in 2020. PointsBet has assembled a highly experienced iGaming team, which which builds our in house proprietary iGaming platform and administrative tools. As we have previously noted, Owning and controlling our in house iGaming technology stack will become an increasingly important strategic advantage. This will deliver ongoing benefits for speed to market and product enhancements as we expand our iGaming access across more states and in the medium to long term a significant margin advantage as we avoid third party platform fees. Our iGaming platform has been approved by GLI, the gaming industry's leading testing and certification company and is with the Michigan regulator for final approval. As such, launch in Michigan is imminent with New Jersey to launch iGaming in June. Turning to Slide 15. As previously announced on the 21st April, PointsBet completed the acquisition of Bannock Technology Limited of Dublin, Ireland. Bannock delivers a team of 40 technology and product staff with deep experience creating products for use in mature and sophisticated sports wagering markets. The Bannock team are market leaders in pre game and in play sports wagering. This acquisition will position PointsBet as a leader of in play sports wagering in the U. S. As in play wagering is expected to grow exponentially. Within the next 3 years, in play wagering is expected to represent circa 75% of all sports wagering activity in the U. S. This acquisition accelerates PointsBet's technology roadmap and places the company in a prime position to take advantage of this growth in in play betting activity in the U. S. Additionally, through highly sophisticated risk management algorithms and deep trading experience, Bannik's technology will allow PointsBet to grow trading margins and offer a superior experience to our clients. Integrations between the teams has already begun and we are looking forward to deploying these sophisticated quants and risk management enhancements in due course. Sam? Thanks, Andy. Moving to Slide 17. In the 1st 6 months of our partnership with NBC, we've made great strides in the areas of innovation, content and product with a focus on driving user acquisition and growing our brand. NBC has proven to be a quality partner to point spending this time, helping us steer our brand in front of millions of people every day and working alongside us to co create viewing experiences and product features for U. S. Betters. To touch on a few examples, Firstly, BetCast, a betting themed alternative broadcast featuring PointsBet Markets with odds updating in real time during both the Waste Management Phoenix Open and recently Chicago Bulls game. Both events delivered very large spikes in turnover and in particular in play action as viewers engaged in the betting content and made bets themselves. Secondly, Live Lines integrations into NBA, MLB and NHL games on NBC's regional sports networks and the storylines program pre game, in game and post game. With storyline, NBC talent talk to specific bets and build narrative around them. Thirdly, NBC's free to play app, Predicta, boasts over 1,800,000 active users and features individual NFL, NBA, PGA, EPL and NASCAR free to play games. Predicta has already delivered over 325,000 leads to PointsBet. 4th, custom point spec TV ads that are targeted directly to users in homes with Comcast Xfinity X1 voice remote. And just this week, the launch of the Bet the Edge podcast hosted by joint NBC PointsBet host, Sarah Pearlman and leveraging NBC Edge's content and information combined with PointsBet's odds data and analysis. However, our work is not only focused on the present. Alongside NBC, we are planning for the future. It's soon to be reality where more states allow online sports wagering. Our partnership to date has been successful in laying that framework and testing opportunities that will only become bigger and better over the next few years. Moving to Slide 20. PointsBet continues to execute on its strategic and operational objectives. PointsBet now has market access to 16 U. S. States representing 35% of the U. S. Population and is currently operational in 6 U. S. States. PointsBet is currently the 4th largest sports waging operator in Indiana, Illinois and Iowa and the 5th largest sports wagering operator in New Jersey and Michigan. PointsBet is clearly positioned in the upper echelon of sports wagering operators in the U. S. As it regards New York, Governor Cuomo has signed budget legislation in session that includes a plan to allow online sports betting in the state. As defined in the new law, it is expected that New York will select a minimum of 2 online platform providers along with a minimum of 4 operators. The commission is releasing a request for application on 1 July 2021, which PointsBet intends to respond to. As can be seen on Slide 21, Bank of America and Morgan Stanley estimate that the combined North American sports betting and iGaming market could reach $16,500,000,000 and 18,500,000,000 U. S. Dollars respectively of gross win by 2025. Further, Goldman Sachs estimates that the U. S. Sports wagering and iGaming revenue opportunity could exceed US50 $1,000,000,000 in 2,033. It is truly an exciting time for the business. I would like to thank you for your time today and we will welcome any questions. Thank Your first question comes from Desmond Tsao with Goldman Sachs. Please go ahead. Good morning, Sam. Good morning, Andy. Thanks for taking my questions. First question is just around margin. I thought that was a very strong margin performance Across gross and net win across really both Australia and the U. S. So if you could maybe just highlight some of the key drivers Through the quarter? And in particular, how sustainable you think that margin profile in Australia is going forward? Yes. Hi, Des. Yes, I think in Australia and the U. S, there were some favorable results. So there's definitely a little bit of extra margin through some good results going our way. But I'd say what you're seeing in Australia is close to the new normal, what we'd be expecting. So those sort of margins, we're quite comfortable with and we think As we made comment to in the commentary that the transformation or the transition to higher margin multiproducts, Obviously, the same game multi products that we now have are doing their job. So I think they are reasonably sustainable. The U. S, obviously, we had somewhat of a reversal of the poor quarter, which added to the margins. I think we've previously spoken to obviously a 5% to 6% gross margin in the U. S. Look, I think conservatively, we would stay there, but we would note that again we're making good progress in increasing the amount of handle on these multi or parlays and that should drive those margins up over time. Right. And just on that with respect to iGaming, the launch imminent subject to the regulatory approvals, how should we think about margins on that front once you guys do launch in Michigan and then subsequently in New Jersey. From what we're seeing, obviously, iGaming is a very, very high margin product. So I'd expect that to be a tailwind for margins in the U. S. Going forward as well? Yes. If you're talking about corporate margins in terms of gross profit margins and obviously, flowing through the model and helping us get to that positive EBITDA position, no doubt about It's we're very much looking forward to launching that product in Michigan and New Jersey, because obviously a lot of the revenue that's being reported out of the U. S. At the moment is iGaming and we sort of had one arm tied behind our back. But yes, I mean, it definitely helps the economics of the states in which iGaming is live. Great. And then last question just around CPA. Thanks for the disclosure. Just Around the first time better CPA tracking below 500, I think you said, in all states. If you could maybe just Ben on that a little bit more and then I guess maybe make some comments around how you expect that to trend as you sort of See more benefits come through from the NBCUniversal deal because I think some of your peers in the U. S. Have been Talking to long run blender CPAs of around sort of 250. So, any comments around that would be great. Yes, I think the disappoint we've made previously, the groups that are sort of talking about a blended CPA of around 250 are the groups that are getting a large portion of their first time betters from their existing databases. So, that's sort of 40% to 50% of their acquisition that talks to their, let's call it, non database acquisition being in the 400 to 500 range. And that's why we've always been comfortable that Given our brand is still very much in the early stages of being grown and recognized, I think it speaks to our excellence in execution from a marketing perspective that that we are having CPAs below 500. There's a lot of competition. There's a lot of money being spent. Obviously, the big guys are spending far more than we are. And so our ability to keep our shape and maintain our discipline while tracking towards our 10% aims, I think is great. We don't want to provide forward looking, but we've been talking for some time around that $500 mark is a number that we're comfortable with We don't see any danger to that blowing out. Thanks guys. Your next question comes from Larry Gandler with Credit Suisse. Please go ahead. Thanks, Sam, Andrew. So 18 states is where you intend to be. I'm just wondering if Sam you could talk to which are the Perhaps more imminent states and I think you said you have market access in 16, but there's 18 states you want to be in. So I think there's 2 that you're still Get market access? Yes. That's fair, Larry. Yes. So, look, there's a bunch of states that could all be prioritized, let's call it, this Calendar year, so the rest of 2021, West Virginia, Tennessee, Virginia, Maryland, Arizona, Ohio are all candidates around there. Then obviously, We flagged that we'll go live in Pennsylvania in the first half of next calendar year. And then towards, let's call it, through 'twenty two, the other states that would be in the mix would be Wyoming, Kansas, Missouri, Mississippi, Kentucky, New York obviously. So look, we don't think there's Going to be a shortage of states to be rolling out to hit that 8% number. Pretty confident of doing that. So, Yes, states that haven't that we haven't obviously announced market access to states like Virginia where we've spoken before that there's a process that the lottery is going through. I think I mentioned Maryland where we haven't announced anything there. But yes, pretty confident, Larry, that obviously the 'eighteen is going to be there. Okay. And Sam, just wondering if you can give us some color around you signed up a lot of new customers in this March quarter. I'm just wondering if in maybe pick a state New Jersey with NBC there, what's the process like For a punter, a new punter to go through as they see an ad, as they sign up, what are the pay options? I know there's been some difficulty with sign ups in the U. S. Relative to Australia. It's a bit more of a belabored process. So Just wondering if you could talk to how that's improved and what's the experience like? Yes, sure Larry. And I think this really highlights sort of some of the, let's call it, unsexy areas of product execution. It's not all about number of bet types and same game multi etcetera. The funnel of taking the client on that journey from that your marketing technology then seeing an ad, clicking through that ad, seamless experience in downloading, getting through sign ups and deposits. The operators that do that well versus the operators that don't do well that well, that makes a material difference. And We've made some good improvements in those areas in improving our funnel conversion, which is great, and it certainly helps your cost per acquisition numbers. So, An overall comment I would make is that the banks are getting better and the payment gateways that you have available to you are improving and we've got Some new ones on the way that will further help our funnel. But similarly, we're getting better too. We're getting better at, let's call it, error handling, Now, into that, where a client hits a few hurdles and we've got automatic notifications, so our outbound call team can get in contact with them and hold their hand through the process. So it's still not as efficient as a market like Australia, but it is improving. And do you have sort of maybe a few my sense is there still might be a huge opportunity there in terms of the number of customers you're losing As a result of them getting halfway through and then dropping off. Is there any sort of stat in that regard that you guys have internal metric? What we do, look, I won't disclose them, but you're right. I mean, if we're talking about sign up cost per acquisitions, you're talking about a far lower number because there's a decent chunk of those clients that hit hurdles. And so part of the Upside opportunity is not just converting new clients that come through the funnel, but it's going back to those other ones and reaching back out to them and helping them complete the funnel. Okay, great. Thanks, Sam. Your next question comes from Don Carducci with JPMorgan. Please go ahead. Good morning, everyone. And hi, Sam. You spoke about the proposed regulatory framework. And if for some reason you don't receive a skin to operate in New York, would you still launch and operate in Pennsylvania? Yes. So would that result in overspending on marketing for an under indexed footprint across New Jersey, Pennsylvania and New York? Look, I think one of the obviously, one of the assets that we have is the Philadelphia RSN. And so We've got a fantastic asset that's sitting there to allow us to build a brand and market efficiently into the Pennsylvania, but obviously New Jersey market as well. I think it's fair to say, Don, that any operator that is in New York, Pennsylvania and New Jersey will be an advantage to an operator that's not in New York, for example. But you would still see Pennsylvania as attractive You did not have a scan in New York? Most definitely. Yes. Okay. And then last question for me. Given the Q4 is a quieter period, How should we think about active customer growth and the step up in marketing costs? Are you talking about Australia or U. S. Or both? U. S, please. Yes, I mean, March quarter obviously is the biggest quarter. That's where we spent the most on marketing. We won't spend as much on marketing in the final quarter as we did on the current quarter. And you'd expect that actives The ability to attract that, these won't be as strong without comparing to a March Madness superbowl quarter. So seasonality wise, we will drop off our marketing spend slightly and we'd expect less first time betters coming through the door. Okay, great. So if we try to take what just happened, even though it is quieter, thinking about trying to maybe annualize this, you obviously have a couple of states that didn't have Full marketing spend in this last quarter, plus you'll be launching in iGaming. Do you expect it to be kind of up on the quarter? Or do you think it would be fair to just annualize this number? You're talking about marketing spend? Yes. Sorry, marketing spend for the U. S. No. So marketing spend will be slightly less than the quarter just gone. Great. Thank you, everyone. Your next question is from Waseem Karaswani with Jarden. Please go ahead. Yes. Good morning, guys. Just a question on Illinois and the in person registration. I know I realize it's sort of early days, but sort of any comment as to how that's Tracking and kind of how you see that sort of how significant advantage you see that playing out in that market? Ikeda, Iwasa, look, I think there's definitely an advantage in terms of growing our market share. I think we need to acknowledge that's not quite the same advantage that it would have been if we had had an in person registration from day 1 because the mobile registration having been allowed for a number of months now has meant that betters have been and you can as betters are probably going to sign up an account And as soon as possible, they've had the chance to choose and the DraftKings and Fanjuls of the world have had the ability to try and light up their databases. So it's not quite the same advantage that would have been from day 1. But I think in terms of sign ups going forward and there's certainly still a large people in Illinois that we expect to become betters over the journey that haven't got an account. It certainly puts us in a strong position to outperform from a market share percentage going forward. Yes. Great. And can I just ask a question on promotional intensity? Obviously, there is a high degree of it and we saw it sort of in the December quarter from some of your peers. Just any comments around how you sort of see that playing out and feeding into your agreement with NBC and whether some of those rates are kind of tracking Where you expect them and just kind of the outlook there on a sort of mid term view? Yes. I mean, look, even if you look at Australia, We're giving about year to date, we've given about 36% of margin from gross to net. So, Australia is 13 years into the journey, we're trying to grow our market share. You're still reasonably aggressive, whereas the U. S. Year to date, I think it's about 51%. But it's really on a state by state basis. As you launch a new state, you're going to give away all plus some more to grow and scale up your business. We don't have the brand recognition from day 1. We don't have the database from day 1 that Afangel or drafting tab. But we want to get clients knowing that PointsBet is there, we want to get them having the opportunity to have 5, 10, 15 bets on our app, so that they can come to realize and differentiate between what is a good app and a poor app. And then you increase your chance of holding on to them as a loyal lifetime client. On a state by state basis, you'll see us in newer states be aggressive in terms of promotions and then as we get longer into the journey, that percentage of promotions will come down. But acknowledging that Australia year to date is still at about a 36% number. Great. And then just finally for me, Perhaps just a comment on your register. A lot has changed in the business and the competition of the business has obviously changed in the last 12 months. Just be interested with any sort of color you can give us on how you registered may have changed over that period. Yes. Hi, Wozman. It's Andy. I can take that one. Yes, I think we had a big focus obviously post the original IPO that we wanted to grow that U. S. Based and the international based on the register. So I think we're in a position now where our U. S. Representation of institutional clients is approaching the Australian institutional clients and so we're very pleased with the support we've had from Australia and Asia. But yes, it's great to be able to see that the U. S. Institutions are recognizing the performance of that company and are investing in Queensland. Very good. Thanks, guys. Your next question comes from Rowan Sundram with MST Financial. Please go ahead. Hi, guys. Just a couple of questions. I might start with Canada and Sam. How are you writing the prospects of that legislation in the Senate Following the positive update and how are your on the ground efforts in Ontario progressing? Yes. Good day, everyone. Yes, we're still bullish On Canada getting done, I think on our last call, we said we were planning for to be ready for a last quarter launch this year. Probably the expectation is that that might roll into early next year January or the like, but we will be ready. In terms of our on the ground efforts, without sort of giving anything away, we're certainly very active in our preparations. You can think about that from the sorts of strategic things that we want to think about to help us execute the strategy as well as people on the ground, headcount, etcetera. So Now our planning given that we're in just about into May and we sort of want to be ready by the end of the year where we're making great strides to put in place infrastructure to go. Thanks, Sam. And on the upcoming launch in Pennsylvania, could that be a simultaneous sports and iGaming or is there going to be a lag there in how that plays out? Yes, it could be simultaneous. I'm not aware of any reason as to why the regulator would make us separate them. And from an execution perspective, we can do it simultaneously. So the regulators looking at it as a whole, is it with the platform and sports and iGaming? Well, we're very early in that process in Pennsylvania. We flagged first half of calendar year next year launch date because Pennsylvania does have a pretty thorough and detailed process. So, yes, we'll get into the nuts and bolts. But having launched, obviously, iGaming in Michigan And New Jersey by that time, obviously having a longstanding sports betting platform that's been operating in a number of states, not foreseeing any troubles or difficulties that would stop us. Your next question comes from Damian Williamson with Bell Potter. Please go ahead. Hi, Sam and Andy. Just a quick question on Pennsylvania. Just Given the cost of the license of US10 $1,000,000 and the 36% state tax, does that license fee cover the iGaming as well? Would you have to pay any extra fee for that? Yes, it covers it, Damien. Great to hear from you. Yes, look, I think Sorry, go ahead. No, no. I was just making sure because that's you sort of baulked on entering Pennsylvania because of the That license fee, so just seeing that sort of covered that both products? Yes. I think when we originally deprioritized Pennsylvania that was very early on in our journey and we had other states that had We have more attractive elements to it. I think we also recognize that without that iGaming product to go into a state are at a competitive disadvantage whereas those states like Indiana, Iowa, Illinois, Colorado, etcetera that we could prioritize and not be at that competitive disadvantage of not having iGaming. But now that we've got iGaming and now that we've got NBC and in particular at Philly RSN, and we obviously have a stated aim now to be in every market that we can be in, yes, we're definitely full steam ahead. Yes. And just one final question, just in terms of Michigan because just looking at all the Players on the start line, just looking at you have 4 players who have very strong double digit market Yes. Would that be Nathaniel's DraftKings and I think Parcel and MGM, would that be fair to say that they've had existing The basis through their casinos and Fantasy Sports versus what you've had up there to Absolutely. Yes, absolutely. The double I mean, MGM, for example, have had not just a strong database, but obviously they have the physical casinos there and those were open and they were able to line up, let's call it, pre go live registrations. They had them ready to press I would note that if you take a bar stool as an example, they started strong, but they've been losing market share from January, February, March. And obviously, we start from a very low base not having that existing physical casino or database and we start moving north. So, We've spoken before that for the short term at least, we're still working hard to speak about the fact that we have 325,000 leads from the NBC Predictor app. Our ability to warm up states and maybe not start at 1% market share, but start a little bit higher will get better over time. But those fantasy sports operators and MGM with their rewards program do have that starting point. But Our aim is to keep growing our share month for month and eat into it. Yes. Okay. That's all for me. Thank you. Thanks, Damian.