Thank you for standing by, and welcome to the PointsBet Holdings Limited Q2 FY 2021 Appendix 4C and Activities Report investor conference call. All participants are in a listen-only mode. They will send an answer session. If you wish to ask a question, you will need to press the star key followed by the number one. I would now like to hand the conference over to Mr. Sam Swanell, Managing Director and Group CEO. Please go ahead. Thank you. Good morning, thank you for joining the PointsBet Holdings Limited Q2 FY 2021 business update and activities report. This is Sam Swanell, CEO, and I'm joined on the call today by our CFO, Andrew Mellor, and U.S. Chief Commercial Officer, Eric Foote. This morning, I would like to walk you through the Q2 FY 2021 trading performance for the Australian and U.S. businesses, as well as a trading update to 24 January 2021. I will then hand over to Andrew Mellor to talk to the Appendix 4C quarterly cash flow update released to the ASX this morning, and Eric Foote will then provide an update on our first quarter with the NBC assets and our plans moving forward. Please note, all numbers referred to are unaudited and in Australian dollars unless otherwise stated. Turning to slide four. The Q2 performance of the global trading business as compared to the prior corresponding period of Q2 FY 2020, to be referred to as the PCP, was as follows. Turnover was up 303% at AUD 1.2 billion. Gross win up 189% at AUD 83.4 million. Net win up 148% at AUD 44.6 million. Active clients up 107% at 211,000 clients. As I've spoken to in the past, due to the nature of the sports wagering industry, quarterly figures are not always representative of the company's longer-term trends. As the company looks to grow its business across the United States and utilizes its deep sports wagering experience to risk manage those clients whose average bet size is significantly above the median, volatility of revenues across reporting periods can occur. Slide four addresses the volatility across reporting periods by showing the company's full-year trading performance to 24 January 2021. The global business had a strong start to Q3 FY 2021. For the period 1 January to 24 January, the business achieved a net win of AUD 22.9 million. The United States has reversed the aggregate H1 FY 2021 negative net win of AUD 2 million to record an FY 2021 year-to-date net win to 24 January of AUD 11.7 million. The Australian business recorded FY 2021 year-to-date net win to 24 January of AUD 94 million. As can be seen on slide six, in Australia, active clients were up 77% compared to the 12 months to 31 December 2019. The company recognized a structural change in the Australian online wagering market, including brand consolidation with the BetEasy brand being folded into Sportsbet in the previous quarter and a shift from retail to online wagering. As the company seeks to grow its net win market share in 2021, the Australian trading business marketing spend was AUD 9.7 million in Q2 FY 2021, as the company sought to acquire and retain clients during the important spring racing carnival. PointsBet's investment in U.S. marketing during Q2 FY 2021 of $18.2 million resulted in U.S. active clients during the 12 months to 31 December 2020, increasing by 222% to over 68,000 compared to the 12 months to 31 December 2019. In the U.S., Q2 FY 2021 saw the continuation of the NBA, completing the 19-20 season in October and commencing the 2021 season in late December, the NFL, and the MLB completing the 2020 season in October. As a result, PointsBet continued its targeted marketing investment in New Jersey, Indiana, and Illinois, assisted by the NBC Sports media assets, and launched operations, including targeted marketing investment in Colorado in November 2020. PointsBet continued to not make any significant marketing investment in Iowa during Q2. However, increased target marketing spend in that state from 1 January, when in-person registration was replaced by online registration. Now turning to slide seven. Before I comment on the Australian trading results, I was thrilled to announce earlier this week the appointment of basketball champion and three-time finals MVP, Shaquille O'Neal, as our Australian brand ambassador. Shaquille will headline the company's new 2021 Australian brand campaign, which will roll out across television, digital, mobile, and social media. U.S. sports, particularly professional basketball, continues to be the fastest-growing betting sport in Australia, and therefore aligning with Shaquille O'Neal is particularly exciting for the business. The Australian trading business continued its strong performance, achieving record net win in each of October, November, and December 2020, ending the quarter with net win of AUD 49.8 million, up 240% from the PCP. Net win margin of 9.2% increased from 7.9% in the PCP, despite the company increasing promotional spend as a percentage of gross win across the spring racing carnival. Q2 also saw an increase in the percentage of Australian turnover that was bet on the higher margin multi-segment compared to our prior corresponding period. The launch of the Same Game Multi for NFL and NBA in September and December respectively, further contributed to higher overall margins. March 2021 will see the company's third anniversary since the launch of a full product suite in Australia. Pleasingly, H1 FY 2021 marketing spend of AUD 21 million assisted in delivering H1 FY 2021 net win of AUD 84.8 million. A marketing to expense ratio of 25%, marketing to net win ratio of 25%. Q2 FY 2021 turnover of AUD 543.3 million, almost tripled compared to Q2 FY 2020, up 194%. The company continued its long-term national broadcast role as the exclusive Channel 7 Victorian odds integration partner for their spring racing carnival coverage. This was an important media asset in Q2, especially given the current brand consolidation and reduced attendance at racetracks, pubs, and clubs over the spring racing carnival. Performance of the Australian trading business is an excellent blueprint for our aspirations in the United States. Our ability to operate a growing, profitable business in the advanced and competitive Australian market, backed by a continually improving product and growing brand recognition, provides confidence in the continued execution of our U.S. strategy. Before I comment on the U.S. trading results, I was thrilled to announce earlier this week the appointment of Paige Spiranac as a global on-air talent and brand ambassador. The former professional golfer and social media influencer has built a following of nearly 3 million followers on Instagram and 7 million across all social platforms, the largest of any golf personality in the world. Turning to slide eight. I will now speak to the U.S. trading results for the quarter and comment on the trading update to 24 January 2021. The U.S. business achieved a quarterly gross win of AUD 7.9 million compared to a gross win of AUD 8.1 million in the PCP, with a quarterly net win loss of AUD 5.1 million, compared to a net win of AUD 3.4 million for the PCP. As I noted earlier, due to the nature of the sports betting industry, quarterly figures are not always representative of the company's longer-term performance. This is evidenced by the United States business strong start to H2 2021, reversing the aggregate H1 FY 2021 negative net win of AUD 2 million to record a FY 2021 year-to-date net win to 24 January of AUD 11.7 million. Given the continuation of the major U.S. sport leagues and PointsBet's investment in marketing during Q2 FY 2021 of USD 18.2 million, the U.S. business saw active clients during the 12 months to 31 December 2020 increased by 222% to just over 68,000 compared to the PCP. PointsBet is now operational in New Jersey, Iowa, Indiana, Illinois, Colorado, and Michigan. Michigan will also see the inaugural launch of PointsBet's iGaming product in H2 FY 2021, followed by New Jersey. Turning to slide nine. I will now briefly touch on each state. New Jersey. PointsBet achieved 13.5% market share in New Jersey for online handle during the quarter on the back of increased activity from clients whose average bet size is significantly above the median. The company continues to target a long-term market share of 10%. New Jersey recorded a quarterly gross win loss of AUD 5 million at a gross win margin of -1.1%, and a net win loss of AUD 9.3 million at a net win margin of -2.1%. As noted in the trading update, results in Q2 have corrected from this short-term variance, resulting in a year to date to 24 January 2021 positive net win in New Jersey. In Illinois, PointsBet achieved 14.7% market share for online handle in October. Whilst we are very pleased with this result, PointsBet acknowledges that the IGB recorded an online bet count market share of 3.6% for October, which is more reflective of our market share performance, as during the month the company risked managed clients whose average bet size is significantly above the median. Illinois recorded a quarterly gross win of AUD 9.3 million at a gross win margin of 6%, and a net win of AUD 4.2 million at a net win margin of 2.7%. Illinois remains a remote registration environment due to the emergency order extending remote registration in Illinois until at least 6 February 2021. In Indiana, PointsBet achieved 4.2% market share for online handle during the quarter, ranking as the fourth-largest operator by handle in December. Indiana recorded quarterly gross win of AUD 2.5 million at a gross win margin of 7.5%, and a net win loss of AUD 0.2 million at a net win margin of -0.6%. Given the early stage of this competitive state, the company continued to focus on acquiring and retaining clients, which resulted in promotions exceeding gross win. Details of the company performance in the recently launched Colorado and in-person registration jurisdiction Iowa are set out in the quarterly update released to the ASX this morning. I will now hand over to Andrew Mellor. Thank you, Sam. Turning to the Q1 FY 2021 Appendix 4C cash flow summary released earlier today. Please refer to slide 10. At the 31st of December 2020, the company's corporate cash balance was AUD 359.1 million, with the quarterly AUD/USD FX movement resulting in an unfavorable movement of AUD 8.9 million during the reporting period, as the company held part of its corporate cash in U.S. dollars. The company has no corporate borrowings. Receipts from customers or net win for the quarter totaled AUD 44.6 million, as previously detailed by Sam. Net cash used in operating activities in the quarter ending 31 December 2020 was AUD 38.7 million. Excluding the positive movement in player cash accounts, net cash used in operating activities was AUD 47.5 million. As previously detailed by Sam, the U.S. business had a negative net win of AUD 5.1 million for the quarter, which impacted net cash used in operating activities. However, it should be noted that the short-term variance of trading results turned positive in January, resulting in a group net win year to date to 24th of January of AUD 105.7 million. Cash outflows during the quarter included cost of sales of AUD 29 million, non-capitalized staff costs of AUD 9.4 million, marketing costs of AUD 43.2 million. Administration, corporate costs and GST paid on Australian net win of AUD 10.5 million. To provide some further comments. The strong performance of the Australian business led to an increase in Australian cost of sales payments in Q2 FY 2021. U.S. cost of sales also increased quarter-on-quarter as we were now operational in five states. U.S. marketing expense payments grew quarter on quarter as the company marketed for the full quarter in New Jersey, Illinois, Indiana, Iowa, and launched marketing investment in November in Colorado. There also continued to be prepayments of some U.S. marketing obligations. Net cash used in investing activities in the quarter ending 31 December 2020 was AUD 20.1 million. The AUD 11.9 million of non-current asset payments is primarily an escrow deposit relating to marketing commitments. Market access payments were AUD 3.5 million. Capitalization of our technology and product staff costs were AUD 3.1 million. I will now hand over to Eric Foote to provide an update on our NBC partnership. Thank you, Andy. Turning to slide 11. NBCUniversal remains the perfect partner for PointsBet as we execute on our U.S. media, customer acquisition and retention strategy. As previously communicated, NBCUniversal reaches 100% of all U.S. households with their digital platforms having more than 60 million monthly active users. NBCUniversal has a diverse media mix across local, regional and national platforms. This will provide PointsBet the ability to geo-target and customize local, regional and national marketing campaigns. PointsBet's access to exclusive broadcasts and digital integrations across NBCUniversal's expansive portfolio of live sports rights builds trust and credibility in the PointsBet brand. NBCUniversal has an incredible array of rights to live sports broadcasts, with a market-leading portfolio, including the NFL, PGA TOUR, NHL, English Premier League Soccer, and NASCAR, to name just a few. These rights are distributed across national broadcast and cable networks, including the Spanish language Telemundo network, regional sports networks, local television stations, and expansive digital platforms. Key digital platforms to note include Peacock, a direct-to-consumer streaming service inclusive of live sports, Rotoworld, a sports betting news and information subscription service, and GolfNow, the largest online tee time marketplace in the world. I could not be more pleased with the progress we've made to date under this partnership. Both teams are aligned to the opportunities ahead and are working at a feverish pace to unlock value and execute on PointsBet's brand strategy. December was the strongest month to date of the partnership in terms of first-time bettors acquired via NBC, with January poised to perform even better. I would like to briefly highlight two areas of execution. Broadcast integrations into NBC Sports game and studio coverage and integration into NBC Sports digital products. PointsBet's advertising units have been deployed via national, regional and local sports networks, including throughout all Bulls, Blackhawks, Sixers and Flyers games on linear and streaming via the NBC Sports mobile application. In addition, PointsBet bet types and offers have been promoted throughout all pre-game, in-game, and post-game coverage. From a national perspective, PointsBet has been featured in NHL and EPL pre-game coverage and ticker integrations, together with running order integrations during NASCAR and IndyCar races. In addition, PointsBet has garnered significant coverage as part of NBC's Golf Channel's Morning Drive and Golf Central programs, focused on odds for upcoming events with brand inclusion and coverage. As announced earlier in the week, in collaboration with NBC Sports and the PGA TOUR, PointsBet will power a first of its kind golf betting companion BetCast during the upcoming Waste Management Open at TPC Scottsdale Stadium Course, one of the largest PGA TOUR events of the year. The BetCast provides a distinct betting version of this major sporting broadcast, with PointsBet having exclusive integrations with our odds, unique markets and promotions. BetCast will be distributed via Peacock, the NBC direct-to-consumer platform, and air for two and a half hours each day, 10 hours total for the tournament. BetCast will aim to lay the framework for future activations of its kind with PointsBet and NBC. As previously mentioned, PointsBet has been able to leverage our technology capabilities to integrate into NBC digital products and platforms. To give you one example, Comcast has launched PointsBet Voice Plus ads back in November, which leverages the capabilities of the Xfinity X1 Voice Remote. A text overlay during the ad informs users to say PointsBet to get two free risk-free bets up to AUD 1,000, and when spoken, triggers an SMS text message direct to the consumer with a unique sign-up code back to PointsBet. Similarly, PointsBet has integrated with the NBC Sports Predictor mobile application, including exclusive PointsBet branding, odds integration, and promotional messaging for users to easily engage with sign-up offers to PointsBet for a seamless conversion process. Further, in 2021, PointsBet and NBC will co-promote bundling offers aimed to drive further partnership association of NBC and PointsBet, and provide fans with discounted rates for NBC products after placing first-time bets with PointsBet. This, in addition to the PointsBet sign-up offers, which are shared multiple times per week via email communication to Comcast and NBC's marketing databases. While we are extremely pleased with the progress to date, we've just scratched the surface on the opportunities of the partnership. In the coming months, PointsBet's marketing and product teams will be collaborating with NBC on the development of an array of exciting projects. I will now hand back to Sam for some concluding comments. The outstanding progress that we have made was recently recognized at the eGaming Review North America Awards, with PointsBet winning three awards: U.S. Sports Betting Operator of the Year, U.S. Socially Responsible Operator of the Year, and U.S. Rising Star. I was particularly proud of the judges' comments, which reflect the strategic areas we have focused on the U.S., including most innovative marketing of all B2C operators, clear market leader in social responsibility in the industry. PointsBet has taken more time than many to truly understand what the U.S. player is looking for. Now turning to slide 13. I would like to provide some comments on iGaming, which will become a key part of our U.S. strategy in H2 FY 2021 and beyond. Our platform is built. We have integrated the first round of third-party content with a live dealer solution to follow. We are now in the process of production testing, which will be followed by certification. We're excited to launch in Michigan, pending the required approvals this half, with New Jersey a fast follow. While an in-house built solution takes longer to execute than an off-the-shelf B2B product, we now control our iGaming technology solution. This will deliver ongoing benefits for speed to market and product enhancements as we expand our iGaming vertical across more states, and in the medium to long term, a significant margin advantage as we avoid third-party platform fees. Moving to slide 15. PointsBet continues to execute on its strategic and operational objectives. We are now operational in six U.S. states and continue to build our U.S. brand to capitalize on the ongoing growth of the addressable U.S. sports betting and iGaming markets. Lastly, turning to slide 16. Since our last quarterly investor call, it is clear from the activity we have observed on the ground in North America, from both industry and government organizations, that the reality and the size of the North American sports wagering and iGaming opportunity is becoming more widely recognized. PointsBet was created to capitalize on this opportunity, and our team, technology, and business strategy has been developed over the last four years with this at the forefront of our mind. It's a truly exciting time for the business. I'd like to thank you for your time today and would welcome any questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up your handset to ask your question. Your first question comes from Don Carducci from JP Morgan. Please go ahead. Good morning, everyone. Can we talk about New Jersey a little bit? I was reviewing the transcripts, and in the fourth quarter, when your New Jersey turnover share was 8.7%, you said, put any emphasis on that number because it was a low activity period, and you were targeting between 6% and 7%. In the first quarter, you hit bang on 6.5% turnover market share and reiterated the same targeted share for this quarter. Now, when you were just talking about New Jersey, you said you're targeting 10%. Can you clarify if it's 6% to 7% or it's now 10%, given you just did 13.5%, but with a resultant outcome of a negative net win? Good day, Don. Hope you're well. I think the answer is, I think it's pretty clear from our numbers that through the staking of some bigger betting clients, that had a good run of results, that resulted in our net win margins being below expectation. When that happens, obviously, the punters are winning, they're cashed up. That results in driving a high level of turnover. We certainly don't want to point to 13% as being our steady state, from a handle perspective in New Jersey. The actual result will be somewhere between that 6%+ figure. Our aim remains to grow from that towards that 10% market share. You highlighted the increased average bet size, and I'm looking back at the 3Q, 4Q, 1Q, and obviously this quarter in terms of the promotional activity that you did in New Jersey, and it seems like this one with AUD 4.3 million, it was probably the most. These promotions, were they given early in the quarter, and maybe the election got away from you, and people were using these promotional activities to increase their bet size? Was there something that got away from you, or was there a one-off that resulted in this negative net win? Because Iowa or Illinois, presumably, you have the same strategy unless the New Jersey market is just that much different. Great turnover number, but disappointing otherwise. Can you maybe give a little bit of clarity around that? Yeah, I think if you look at the slide that breaks up our state-by-state performance, you'll get a bit of an insight by comparing New Jersey to Illinois. To be honest, it was less about being extra generous with generosities. It was just that the punters had a good run of luck in New Jersey. You can see that in Illinois we had gross win margin of 6%, whereas in New Jersey, we had negative gross win margin of 1.1%. From a generosities and promotions perspective, we're where we want to be. It's just that gross win margin that the punters had a good run of luck on us in that state for the quarter. Yeah. You mentioned luck, and it seems like Australia really saved this quarter, and the January update is strong, but presumably, the year-to-date performance can't be extrapolated into February or March with the Super Bowl on the 7th. Can you maybe just tell us what the strategy is for the remainder of this quarter? Is it going to be to manage active customers or market share or turnover or yields, or just play it by ear, see how she goes? I think we put in that year-to-date up to the 24 January, because the longer a period that you report on, the more you can remove any short-term variance. Year-to-date in the U.S. to the 24th of January, you can see gross margin of 3.8%, net win of AUD 11.7 million, and the net win margin of 1.2%, which is a better reflection of how we are going in the U.S. overall. We would like to see, as we've spoken to before, that gross margin improve up to 5% +. We would still say that from a variance of results perspective, we came out a little bit unders of where we would normally finish off. In terms of the strategy going forward, it really is based on the life cycle of certain states. In New Jersey, we're certainly looking to see the percentage of promotions reducing because we've been in that state longer. We're building up scale from a client perspective, and we expect to see some good net win. Whereas the newly launched states, we're going to be prepared to give away gross win to grow actives and to get them familiar with the PointsBet app, turn them into hopefully lifetime clients. Those states will have higher percentage of promotion. It really is on a state-by-state basis, and it's based on the life cycle, where we're at in that state, and I suppose in some ways the level of competition in the state as well. Yeah, no, fair. Last question from me. Given you're still reporting actives on a rolling 12-month period, did you find the active customer growth of 28,000 in the U.S. disappointing since you had a full quarter of Illinois, and it's the fifth-most populated state in America? Your peers, they report on a monthly user basis, and it appears that you're under-indexing on active customer growth relative to them, and reporting it on a 12-month basis at that. Look, the purpose for reporting 12 months active is it removes any annual seasonality. From our perspective, that is the most accurate way to report it. No, we're very happy with the jump in actives clients. Obviously, we're spending a marketing amount that's aimed to acquire a 10% market share in these states. A lot of our competitors are spending far larger amounts. No, we're comfortable with the way the actives have tracked. That keeps you on track for the AUD 1 million by 2025? Certainly. Yep. Awesome. Thank you for your time, gentlemen. Bye. Thank you. Your next question comes from Larry Gandler from Credit Suisse. Please go ahead. Hi, guys. Well done. Few questions from me. First, just in terms of the U.S., just curious about new states. If you could talk to, I know it's not on your to-do list for H2 2021, but Tennessee, Virginia, and then where you're positioned in New York. Maybe why sort of Tennessee and Virginia have not been maybe on the cards in the near term? Good day, Larry. Hope you're well. Virginia, the state lottery continues to diligently work through their application and selection process. We're confident of our prospects to be awarded a permit to operate and launch this year. We've got to let them work through their process. That's Virginia. Tennessee's a state that we didn't immediately prioritize. One of the things I've spoken about, Larry, before is we want to get better at being able to launch multiple states more quickly. To this point, we've prioritized others ahead of Tennessee. Depending on what happens with states like Virginia, Massachusetts, Ohio, New York, et cetera, there may come a point where Tennessee gets prioritized. We're certainly not putting a line through Tennessee. On that point about our ability to roll out states, one of the great pleasing things is we launched Illinois in September, Colorado in December, Michigan in January. We're really picking up that velocity, which is great. In terms of New York, obviously there's a lot of commentary about what's going on there. The governor has been pretty clear in some of his statements about perhaps wanting to have a single, let's call it lottery-style operator that would pay a very large portion of their revenue to the state. Pleasingly, the legislation that's being, let's call it progressed, allows for two skins per casino. As you're aware, PointsBet has a second skin relationship with Tioga Downs. Our understanding is that the entire industry is behind that legislation. We'll just have to see how that plays out versus what the governor has stated publicly so far. In the two-skin scenario, would you anticipate a large upfront license fee for New York? Is that what your thinking is currently? I think so. I think if let's call it that war is to be won where multiple skins get through, it's obvious that the governor is thinking about the budget deficits. There's likely to be a decent license fee there. Yeah. I just want to maybe throw out a possibility here, because I've read some very large numbers. Is this a sort of AUD 100 million license fee or more? Is that sort of in the realm of possibility? I don't think it's going to be that high, no. No. Let's wait and see. Yeah. Okay, great. Just switching over to Australia. Pubs and clubs sort of came back online, well, in Victoria in November. I'm just wondering if you could talk to, as you guys talked about targeting the industry aggressively while pubs and clubs were closed. Could you talk to how maybe your run rate evolved over the half or late into that fourth quarter as pubs and clubs are opening? I think we spoke to the fact that we had record turnover in each of October, November, December. We actually outperformed. December outperformed November outperformed October. That's pretty unique because obviously November is a peak month, and December is not a peak month. Yeah. I think that's a pretty good indication of our continued momentum. I will say that part of our momentum, as we said, it's the snowball. Our product is getting better. Our brand is getting stronger because we continue to invest in it year on year, and that's the recipe. Yes, it's an opportunity. There was a change-up in the marketplace. We had pretty good momentum pre any COVID changes as well. Okay, great. Thanks, Sam. Thank you. Your next question comes from Rohan Sundram, from MST Financial. Please go ahead. Hi, guys. Thanks for your time. Just a question from me in terms of, with NBC looking to shut down NBCSN at the end of this year, is there any impact at all from that? Are you able to clarify, or how does that change your strategy in any way in that partnership, or are there even opportunities amongst all of that? I think, Rohan, it's probably a net positive to be obvious. Just to explain what's happened there. NBC Sports Network is one of the national cable networks that NBC have. Most of the content that would be relevant for us is going to end up on another one of their national cable networks, which is their USA Network. Some of the other content will end up on their streaming service as Peacock. The USA Network has a larger footprint than the sports network did. That sports content that goes across there is actually going to be in front of more eyeballs. From our perspective, our rights apply across all of those NBC linear assets, and it's business as usual. Cheers, Sam. Thanks. Thank you. Your next question comes from Jed Kelly from Oppenheimer. Please go ahead. Hey, guys. Thanks for taking my questions. Just going back to Illinois. You're getting nice share gains there. What have you learned or what are you doing in Illinois relative to perhaps like Indiana and Colorado? Then just on the Michigan launch. You had some nice incentives in terms of larger bets relative to the other operators. Any early learnings from Michigan that you saw last weekend? Yeah. Hi, Jed. I think Illinois, as we spoke to, there was the turnover or handle number, and then there was the bet count number, and we're certain. That's for October. Keep in mind, Illinois hasn't released their November, December numbers. The point about Illinois is that we're one of five competitors there. We were the fourth to launch, so we were still a bit behind a few of our competitors, including FanDuel and DraftKings. As we've spoken to, we do have a very strong presence with the NBC assets, in Chicago with the Bulls, the Blackhawks, and the White Sox. If you're watching those events, you're going to see us integrated into their pre-game shows, intra-game shows, and post-game shows. That gives us a great opportunity to maximize the NBC advantage in Chicago, and we would hope to do well in that state. Perhaps compared to other states, we have that extra advantage in Illinois in that, one, there's less competitors so far, and two, the NBC assets are particularly strong. In terms of Michigan, no, but it's pretty early. Obviously, a bunch of operators all went live at the same time, which was great. That was the first time that we had been equal first on the starting line and a great model, I think, in Michigan, where the regulator was able to facilitate that. We were thrilled to be equal on the starting line and be competing, but it is literally a couple of weeks in. Okay. Then, you talked about NBC, right? They're shifting a lot more to Peacock, how do you see, and this might be a better question for Eric. As we move more into this OTT environment, how do you sort of see a potential to integrate your content more into the games, the overlays, potentially on Peacock and then on the regional sports networks? How do you see that developing? Then you do have a partnership with Genius. Do you ever think about building like an PointsBet OTT app for some of the longer tail sports? Eric, do you want to take that? Yeah. I'll take the first part, Sam, relative to the kind of migration of content to digital. I would say it works in our favor. There's no question as we structured our deal with Comcast NBC, we understood the cord cutters, the cord nevers, and the gravitation towards the digital assets. They've made a massive investment in Peacock dating back to July of last year. I saw today they have 33 million monthly active users. We have those exclusivity integrations across Peacock. The spot media opportunities with the discounted rates, preferred placement, preferred pricing. It fits directly into our strategy. I would also comment on the digital front, because it is a digital product, that direct-to-c onsumer platform, we can target state-specific opportunities. It creates a limited wastage for PointsBet to concentrate our dollars on states where we are active or potentially on states where we are going in the near future. Again, I referenced in my discussion earlier, the Waste Management Open opportunity will be the first of its kind, and it will be on Peacock, with those 33 million listeners. Also we're focusing on Golf Channel and NBC Sports for live tune-in and driving traffic back to Peacock. Again, a first of its kind. We're looking to really franchise that and develop that into more sports and also more into golf. Sam, I'll defer to you on the question of Betgenius. I think overall, when it comes to innovation with the media companies, Jed, this was the reason we structured, and it was great that NBC Sports wanted to structure the deal this way, with them having a large equity interest in the business. Because as I've said before, it's not about them fulfilling contractual obligations. It's about them wanting to get behind us and ensure that we become a significant and material player in the U.S. sports betting market. As they are evaluating their strategy, the great thing is that they recognize the role that sports betting can play in that strategy. As a dip in the ocean to that, the Waste Management Open, as Eric said, this forthcoming week, I think we will be at the forefront of any linear and digital innovation from a sports betting perspective. That's what we're working on. That's why we own our own tech, and we can do some innovative things with them. We're only three months into the partnership. Your iGaming strategy, is that more going to be a cross-selling to your existing sports betting, or how are you going to attract users? Yeah. Initially it will certainly be exactly that. We'll attract clients through the mass appeal of NFL, NBA, and all the big American sports. Our brand will be a sports betting brand. Then we will cross-sell them. I suppose the clear like for like is the DraftKings strategy and what they've been executing in New Jersey to great success. Yeah. That will be our strategy. Okay. Thank you. Nice quarter. Thanks, Jed. Thank you. Your next question comes from Wilson Wong from Jarden. Please go ahead. Good morning, Sam, Andy, can you hear me? Go ahead. Yeah, sorry. It's Wassim Kisirwani from Jarden here. Just a question on the volatility in net win rate, obviously in the U.S., a strong sort of snapback in January, and just sort of interested in how much of that was sort of actively managed and just the thinking behind that. I guess is it fair to just assume that this is going to be an ongoing feature as you sort of play market by market? We should just continue to expect a lot of volatility between market share and net win rate in the short term. Good day, Wassim. In Australia we play some big clients too. The difference in Australia is we have a more mature business, when those big clients perhaps have a good run, it's not so easily noticeable because you're dealing into a bigger number. Certainly, our competitors would be dealing with some big clients as well. We do pride ourselves on the fact that we do all of our own risk management, we have a strong pedigree in risk management and trading, we've built proprietary systems in risk management and trading that we think are market-leading. When we talk about a company's propensity to handle such clients and ensure that you do receive a positive outcome, we believe that we can do that. That's why, you talk to the 24th of January number in the U.S., the gross margin number is 3.8%. We think that's still a little bit under. We think, in terms of who got the better of it, the punters or PointsBet in terms of run of results, we think that probably they got the better of the run. We'd like to see that at 5% +, and then that will then pull up the net win as well. Certainly see that our trading and risk management systems and experience is a plus. In the past, we've been asked the question, is this reflective of attracting lower-margin players? That's not the case. We don't do anything in terms of a price sensitivity nature, et cetera, to attract sharper turnover any more than any other competitor does. Okay, great. Just maybe perhaps a comment on Texas, obviously some news flow there around that market and kind of evolving a bit more quickly, perhaps. Can you just remind us how you're positioned and how you're sort of viewing that opportunity? Well, I think it's fair to say that Texas is reflective of what's happening in North America. It is a state that most analysts would not have had as being a chance in the short term, whereas now there's growing talk that it is some chance to legalize in 2021. We do in every state, we are hooked into those states. We're organized. We're talking to all the parties that we should be talking to. We'll see how it goes. I think it just points to the fact that this sports betting and iGaming opportunity is rolling out far quicker than most estimated a year or two ago. Very good. Thanks, Sam. Thank you. Your next question comes from Phil Chippindale from Ord Minnett. Please go ahead. Hi, guys. Thanks for your time. Firstly, I just wanted to circle back to Illinois. That performance was really strong, but it was strong across the key lines, being turnover, gross, and net win. Especially given it's been so early for you in that state. Can you just talk through what the key drivers were for the strength of that performance across each of those metrics? Look, Illinois, I was just talking about New Jersey and how gross win margin sort of underperformed in New Jersey. You can see that Illinois had a good gross win margin of 6%. That meant that even though we were reasonably aggressive with generosities, we ended up with a positive net win margin of 2.7%. I suppose being sort of the first full quarter of operations in Illinois, we probably would've expected to give away nearly all margin in promotions, in the pursuit of acquiring and retaining clients. We were able to deliver a positive net win number, continue good growth. The point being that 13% + turnover or handle number in Illinois for the month of October, as we highlighted, we were at around 4% for bet count. We're certainly not sitting here saying that we are a 13% player in Illinois. Okay, thanks. Just switching to the Australian business. Obviously, that's continued to perform really well, and you highlighted earlier just the strength into December. Again, can you just walk us through what's been driving that strength? You pulled out the Same Game Multi as a factor. The related sort of follow-on point is, given the strength of that business, what's the plan for calendar 2021 to maintain that momentum? Yeah. Look, there's no doubt I talk about improving product, and from day one we've spoke about as our product improved, that would give us more confidence to put more marketing dollars behind the business because we are confident of being able to attract and retain clients on the back of that improving product. The performance of our app is lengths ahead of where it was 12 months ago and further ahead of where it was 24 months ago. On the back of that improving product, and part of that is expanding the Same Game Multi product to further sports. That helps with margin, it helps with retaining and attracting clients, because that's an important product. I spoke about brand recognition. By, let's call it operator standards here in Australia, historically, we hadn't invested a huge amount in marketing. In the last year or two, as that product has improved and as the opportunity opened up with the BetEasy brand ceasing to exist and obviously the offline-to-online transference opportunity during COVID, we could confidently step up that marketing investment while maintaining a positive EBITDA for the Australian trading business. What we've spoken to, and we continue to speak to, is that we'll continue to chase net win growth on our way to that 10% target by 2025 in Australia. We'll do so while maintaining a positive EBITDA position for the Australian trading business. We'll continue to look to grow. We always guard against saying that the previous quarter or the previous half will be directly reflected in the next quarter or next half because there is seasonality. We're confident that we're on the right trajectory. Thanks. Just finally on iGaming, I just want to understand the timeframes a little bit more. You said Michigan is sometime in the next five months. Presumably, that's more a June quarter story. Then just to be clear, on New Jersey, are you looking to launch that by 30 June as well, or is that likely to be in the next period? Yeah. I'm deliberately being conservative with the language in Michigan because we are dependent on certification with regulators, et cetera. It should be well and truly early in this half. That would mean that New Jersey is planned to be launched this half as well. By the end of June, we should have both Michigan and New Jersey live from an iGaming perspective. Great. Thanks very much. Thank you. Your next question comes from Sacha Krien from Evans & Partners. Please go ahead. Morning, Sam, Andy, and Eric. Just wanted to touch on Illinois again, first of all. Similar to the last question, it does appear to have reached profitability faster than we were expecting. Sam, just from your comments, can we take from that you're expecting that we possibly go back into quarters where we see most of the gross win margin being paid away in promos? No. I'm not saying that because I think we've got off to a good start. I'm probably not saying no, that 2.7% net win margin, I wouldn't want to sort of print that number. No, I think there's a good chance that we can continue to deliver positive net margins. Mainly, Sacha, as I said to an earlier question, Illinois is a little bit different to the other states that we're in because there is only five operators at the moment, and the strength of our NBC assets and the execution in Illinois points to the fact that we would hope to do well in that state. Yep. Is there a little bit less competitive intensity in that state, given there are only five? Certainly not, no. The two of the five that are there are DraftKings and FanDuel, and they've been very clear on their strategy, which is to go very hard and to be very generous with the promotions, and they're certainly doing that. Okay. Can you clarify your comment that you're not a 13% player? I didn't quite follow that. You just talked about 4% of the bet count. Illinois's regulator has only released, the last set of results that they've released is October. From a turnover or handle perspective, we were into double figures. From a bet count perspective, we were down at about 4%. For October, we would say, look, the bet count at 4% is probably more reflective of our market share position, given we launched mid-September. That was sort of like our third to sixth week of operations in that state. We're certainly not sitting here saying that we are a 10% player in Illinois yet, even though the handle number for October was 10%+. We eagerly await Illinois Gaming Board's numbers for November and December, and that'll give a bit more insight. We talk about working towards that 10% market share position. We certainly don't expect to get there in the third month or the fourth month. Okay. Thanks. Just a question for Andy on marketing in the 4C. Can you quantify or clarify if there were any prepayments in the operating cash flow marketing number of AUD 43 million? Just to answer that question on the marketing. I can clarify that there was prepayments made in Q1 as also there were prepayments made in Q2. There is working capital movements through the periods, and that's one of the reasons why we disclose the marketing expense in the quarter. The AUD 9.7 million in Australia and the circa $18 million in the U.S., to give clarity around that. Yep. Okay, great. I'll limit it to one more question, given the dropouts. I'm just wondering in terms of Australia, obviously really impressive result, and you guys are taking share. I'm just wondering if you can sort of give some color on the average spend you're seeing from customers pre- and post-COVID in terms of those customers that have been with you for that time. What I would say there, Sacha, is that during, let's call it the hard lockdown period. We certainly saw when there was a lack of entertainment options and discretionary spend options for our clients to spend their money on, we were seeing bigger spend amounts. I would say it's pretty much normalized now. Yeah, the momentum that we've gained is as a result of those underlying factors that we've spoken about. Okay, fantastic. Thanks very much. Thank you. Your next question comes from Damien Williamson from Bell Potter. Please go ahead. Hi, Sam, Andy and Eric. Just a quick observation on the. Well done on the turnover in the America, given your first quarter to exceed Australia on half the active client base. Can you give an indication of what percent of the new clients are coming through the NBC partnership that you can track through the promotional codes that you use there? If you can just give some indication on that. Yeah. I think for the quarter, Damien, NBC was about a third of our marketing spend in the U.S. in terms of expenses that were allocated to NBC assets. Certainly, let's call it more than comparable to other channels when it comes to CPA rate. Certainly doing their job, I suppose, is how I'd summarize it. Okay. Just a final question. In terms of the odds integration that you're looking at in your results, you mentioned that you've done odds integration on Bulls, Blackhawks, Sixers, Flyers games. Is your strategy to do that on all of those Chicago teams in the three sporting comps you're looking at? Or is there a limit? Are you looking at all games or just selective games? Or just looking at how you're looking at choosing where you spend your marketing on these teams, and is it the entire season, or is it just a specific number of games? We'll be very heavy around the three professional sports teams in Chicago throughout the season. As you're aware, as part of the NBC deal, we have basically a right to take up to 70% share of voice in terms of ad units as well. Again, just to take a round number, if there was 10 ads on a NBA Bulls game, sorry, we might take seven of those ads. If you're watching those events, you're going to see us pre-game, in-game, post-game integrated, as well as seeing the vast majority of the ads being PointsBet ads. In those RSNs where we're live or we will be going live soon and we want to build some brand recognition, you can expect to see a heavier presence from PointsBet. Okay. No, thanks. That's all for me. Thanks, Damien. Thank you. Your next question comes from Desmond Tsao from Goldman Sachs. Please go ahead. Morning, Sam, Andy and Eric. Just a couple of quick questions from me. Firstly, I just wanted to pick up on your comments around Illinois market share, the disconnect between handle and bet count. I just want to clarify, is your expectation going forward that significantly higher bet size than median would normalize and fall back down to the median? I guess what is actually driving that big, I guess, higher than median spend across New Jersey and Illinois, and how sustainable is that? Yeah, I think we would expect it to normalize, sort of as per my comment that obviously that was the first month of operation in Illinois. If you get some higher-staking bettors, they're going to have a larger influence over the numbers and results than once you're building scale. To my comment in Australia, we have lots of big betting clients in Australia, but you don't sort of necessarily see them in the results as clearly because they're absorbed accordingly. Yes, I would expect it to normalize, and now the difference between our handle market percentage share and our bet count market percentage share to come together over time. Okay, great. Then just finally, I'm reading little snippets about just the Google Play Store over in the U.S. allowing sports betting apps to be downloaded. Just, I guess, your initial thoughts on that, any color that you can provide and I guess what that might mean for your business going forward. I'm glad you raised it, Desmond. That is a strong positive for the industry. For those that aren't necessarily aware, if you want to download an app for the iPhone, it's very easy. You go to the Apple Store, and you do so. If you wanted to download an app for a Google Mobile, you couldn't go to the Play Store. There's other mechanisms that we had to do to trigger that workflow. It will certainly help with marketing cut-through, cost per acquisition, conversions. It's a really good outcome for the sector as a whole. Thanks, guys. Thank you. Your next question comes from Lloyd Danzig of Sharp Alpha Advisors. Please go ahead. Hey, thanks a lot, guys. Thanks for your time. Congrats on all the success in the U.S. market share performance. There's been a lot of talking in this Q&A even about product and technology. I definitely appreciate the value of in-house risk management. As you guys think about the PointsBet of the future, all the new facets and functionalities that that will contain, I was wondering if you could comment on the role that in-house tech development will play in relation to M&A and other third-party vendors, and maybe just more generally about how you think about the competitive landscape and customer retention in the U.S. over the longer term. In terms of in-house tech, that has been a pillar of our strategy from day one. I mean, that's been formed by the experiences we gained in the Australian market from previous businesses that I've been involved in, about the need to control your destiny from a tech stack perspective. I think as we've mentioned before, DraftKings are currently on Kambi, which is seen as one of the best B2B operator platforms out there. They've made the decision to go out and spend hundreds of millions of dollars purchasing SBTech so that they can bring an in-house solution to their business because they see the importance of that strategy. We've not only done it across sports betting, but as I've just announced, we've done it across iGaming. We're of the view that the U.S. market on a state-by-state basis, where you've got, in each state of America, you've got a different regulator, you've got different markets that are approved, you've got different responsible gambling measures that you have to comply with. Building a customized product for the U.S. sports betting and iGaming markets, we believe will become an increasingly important strategic advantage. I think some of the other transactions you've seen with Bally's buying Bet.Works, I think for $1 50 million, which is a reasonably early-stage sports tech platform, talks to that strategy as well. We're firmly in the camp of owning your own tech capability. As I've spoken to, we're still a reasonably early-stage company compared to some of our competitors. The product that we have in the marketplace now has so much room for improvement. That's what gives us great confidence. The fact that we can win Sportsbook Operator of the Year, when we have a roadmap that we know that is just going to take us to another level, that's what gives us great confidence of our ability to compete going forward. Oh, yeah, please. Okay. Look, the reality is that the two biggest players in terms of DraftKings and FanDuel have certainly set the agenda in terms of promotions and how strong they're going in that area. We expected that. We're prepared to be equally generous at our scale for promotions and generosities. That's the reality. When you have such a known, huge potential total addressable market, which is sports betting and iGaming in North America. It's going to be there, then you're going to have aggressive competition, and you've got to expect that when new states are opening up, everyone's going to throw the kitchen sink at acquiring clients. Thank you. Your next question comes from Nick Maclean from Surrey Asset Management. Please go ahead. Hi. Morning, guys. Just a question for you to sort of sum it all up. What keeps you awake at night? Obviously, you've done really well, executed pretty much everything you've said you're going to do. What keeps you awake at night now going forward? Hey, Nick. Hope you're well. Hopefully, the phone doesn't drop out again. Look, not much, I've got to be honest, Nick. I know we've got the right strategy. We've got the right team. Our tech has kept pace with the opportunity, and is only going to get better. I think the hardest challenge for PointsBet was when PASPA got repealed, and we were still very early stage, and it's all happened very quickly. We've been able to work through our gears, as a state-by-state rollout's happened. We were able to get that first deal in New Jersey, get the Penn National Gaming deal for the five states. Parlay that, to use a betting term, into obviously the transformational deal with NBC, have now 12 states, market access states. We're now building up a team capability. We've added headcounts over the last year to help close the gap on some of our bigger competitors. We feel we're heading in the right direction. Not that it won't continue to be challenging, and like I said, when you've got such a massive opportunity at the end of 2025 and beyond, the competition is going to be extremely fierce. In some ways, the somewhat remarkable journey of PointsBet to this point has been the last three years from where we started. We're now in a very strong position to launch and really have a good go at this opportunity, both in Australia and the U.S. Just following on pretty much from Wassim's question a little while ago. There's a lot that's sort of outside your control in terms of government regulation and whatnot. Does that make you nervous at all, or is that more, do you see that as a headwind or a tailwind? Well, the governments that are legalizing sports betting are doing it for two main reasons. One, they recognize that there's a large black market out there, and their constituents are betting. They're doing so in an environment that's not regulated, and there's no consumer protections, et cetera. They might as well legalize sports betting, bring it into the white market, and then the second part, obviously, tax and create economic activity. If governments put in place punitive measures or tax rates that make the white operators, the legal operators, uncompetitive versus those traditional black market operators, that's not going to fulfill the aims of maximizing the economic activity, maximizing the taxation that we can pay to them. So far, the U.S. has largely taken a very good regulatory approach in terms of the way that most states have been structured. Yeah, okay. Great. Thanks, and well done, guys. Thanks. Thanks, Nick. Thank you. That does conclude our Q&A for today. That does conclude our conference. Thank you for participating. You may now disconnect.