PointsBet Chief Executive Officer Johnny Aitken and his 50 or so employees have a wonderful view of Manhattan from their 24th floor office in Jersey City.
But it’s a mixed bag for the Australian-based online sports betting company and its Aussie CEO. New York State is so close – yet it is so far from legalizing such gambling.
PointsBet has a partnership with Meadowlands Racetrack owner Jeff Gural not only to offer a robust online platform in New Jersey, but also in New York – under the right conditions. Gural also owns Tioga Downs racetrack in upstate New York, which in a few months may be able to offer legal sports betting at that track.
“We have an access point into New York, so we’ll see what happens,” Aitken said on a recent sunny day as he took in that view from his office.
The question of New York offering online sports wagers is not if, but when. And “when”, based on recent remarks by Governor Cuomo and his staff, could be a long ways off, with a sports betting task-force, a constitutional change, and a voter referendum all part of a puzzle that could take three years or more.
“We’ve been on the cusp of media deals for New York and New Jersey, but we need New York to fall,” said Aitken, whose company could be in line for an online sports betting license through Tioga Downs. “Without New York being live, it’s a TV deal where 60 to 70 percent of your audience can’t transact with your brand.”
That’s not to say that PointsBet isn’t getting its name out there. While it is the ninth legal online sportsbook in New Jersey, PointsBet is getting good publicity over announcements such as the “bad beat” offer from the controversial New Orleans Saints loss in the NFC title game to refund such bets in the form of site credit up to $100.
The refund even wound up being offered to players from competing websites, with a screenshot of the losing bet and a signup to PointsBet unlocking the recouping of money.
Australia is the most eager sports betting country on Earth in terms of resident per capita gambling, Aitken said, but he can’t be as unorthodox in his offerings here.
“The ruling from [the New Jersey Division of Gaming Enforcement] is that we can pretty much offer anything where the option includes a licensed NFL person such as a player, coach, referee, or club official,” Aitken said. “So we can’t do something like what song will a halftime entertainer perform first. That’s a big betting market in Australia, where people try to come up with their own set list.
“We can do [bets on] the color of the Gatorade shower on the winning coach because that apparently is filled up by a club official,” Aitken added. “So we will do that. But we can’t push the envelope too much. The amount of hot dogs consumed, over or under, the amount of beer consumed over or under, the attendance – these are great betting markets [in Australia]. So we are a little handicapped here.”
As far as customers go, Aitken said that the company’s early focus is on more hardcore bettors than the general audience.
“We don’t have the brand name to date of a DraftKings or a FanDuel, so going out and spending $100 million on Facebook [advertising], it would be hard to convert that positively,” Aitken said. “We are competing hard on price, with some -105 offers and even some ‘no juice’ on NBA games. Also two risk-free bets at signup, up to $1,000. We really want to go after that big punter, and we’re attracting that client right out of the gate.”
A challenge, of course, is how to keep the momentum going once the cash cow of American football disappears next week.
“We’re trying to get our clients to bet on European sports,” Aitken said. “We could do things like offer double rewards for all European basketball for a week. For ice hockey, we are doing a promotion where if your team goes ahead by two goals, there is an immediate payout. That’s pretty aggressive.”
As for the American sports landscape, Aitken said he expects the 2019 Major League Baseball season to be lucrative.
“Competitive teams always help the betting handle, and the Yankees are very strong and it looks like the Mets and Phillies will be better,” Aitken said. “Baseball is ripe for disruption in terms of betting products – we can splice a game into 1,000 different outcomes. You bet on ‘did he got on base or not,’ on the speed of the pitch over or under.”
Aitken also is bullish on professional golf and tennis betting, and sees an opportunity with Americans betting on overseas soccer. He said the NHL might be “the one that could get left” out, however, because of the low scoring and fast pace of the game.
Those Saints bets that came marching in
Aitken said that he doesn’t view the Saints bettor refunds as a “gimmick.”
“That’s a core part of our strategy,” said Aitken. “We want to have the back of our client, and extend the goodwill. I was fairly mad when there was that ‘double doink’ [the missed field goal that lifted Philadelphia over Chicago in the first round of the playoffs] and FanDuel had a promotion the next day.”
As far as “integrity fees” or paying for “official league data,” Aitken said it is too early in the game.
“We have met with all the leagues and have good relationships with them,” Aitken said. “We have been very upfront with them – we want to bring money away from the [illegal] offshore sites. But to compete with the offshore bookmakers, we have to offer aggressive pricing. If the leagues are then going to come in and go over the top of that and impose a turnover-based fee, it makes it hard to offer competitive pricing. So it’ s a quandary.”
Handling the Super Bowl betting crush
FanDuel infamously saw its sportsbook in New Jersey go down around the starting time of the late games in the last two NFL weekends.
“It is a challenge, and I’m not going to sit here and say that PointsBet could never have that issue,” Aitken said. “It’s a constant thing to be aware of, and testing for, huge spikes. It’s all bursts, and we are equipped for that.”
But PointsBet’s New Jersey platforms mirrors its version in Australia, where Aitken said horse racing is the biggest betting sport and where typically 85% of the handle arrives in the last three minutes before a race.
For the Melbourne Cup in Australia in November – literally a national holiday – Aitken said his company handled more than 100,000 bets in the last few minutes before that featured thoroughbred horse race.
As for the recent U.S. Department of Justice Opinion on The Wire Act, with an implied risk to the future of interstate online poker and lottery and possibly even more complications, Aitken is wary.
“The biggest issue is the banks, which already were so cautious,” Aitken said. “This could set [the industry] back a few steps, that’s the frustration. The most important thing for the customer is ease of getting their money in and out. So that’s the concern.”
PointsBet offers the standard point spread and over/under options, but the unique edge is that a bettor could bet $100 on a line and win 10 or 20 times that if the bet wins by that sort of a lopsided margin. Of course, the same goes on the losing edge.
Aitken said a typical bettor would set a limit of perhaps 10x win or loss on the particular bet, to avoid the risk of a total bloodbath. But still, isn’t that risky for an operator, given the wild potential swings of fate should a popular pick come in big?
“We are very well capitalized, so we are not under pressure to make a profit every day or every week or every month,” Aitken said. “Other operators are different, where with the home team they might offer the worst odds on the market because of that pressure to make a profit.
“We take a long-term view,” he added. “It’s almost like roulette, where if a casino takes on a $100,000 bet on black, they just let it ride. We’re confident in our algorithms, and in the end it’s our quants people against bettors – and we believe our quants are going to be better than the bettors.”
Aitken said one professional bettor told him that he had been at the game for 20 to 30 years.
“He said that he liked to think that he had become emotionless by now,” Aitken said. “But then he took the ‘over’ on how many seconds it would take for the first three-point basket to be made, and he said his heart was racing and he was looking at the game from a whole different lens. That’s why people bet – for the extra spice it adds.”
Moving a world away
Aitken moved to Jersey City from Sydney, Australia with his wife and daughter last spring.
“We were living pretty much on the beach in Australia, and I sort of sold it to them that Jersey City would be the same,” Aitken said with a chuckle. “Of course, on Monday it was almost negative degrees, and my wife said, ‘Ok, this is not the same.’ Typical weather [in Sydney] is the 90s, so it’s 100s in the summer and the lowest we would get in the winter would be in the high 50s.”
“But the move has been amazing – this is the best job I have ever had,” said Aitken, who previously was a trading and operations director for William Hill with an earlier background in greyhound racing. “I’m learning something new every day.”
That applies not only to the exploding online sports betting industry in the U.S., but also to adjusting to New Jersey’s unique culture.
“I’ve noticed that people don’t indicate all the time that they are turning, which as a pedestrian – it’s scary,” said Aitken. “I’ve had some hairy moments. Also, it seems like it’s bread with every meal. We’ve all added on the kilos, or the pounds, a bit with the bread and the huge portion sizes.”