Whistle-blower calls for urgent changes in PointsBet’s US leadership and strategy

Perennial loss maker PointsBet (ASX: PBH), which has racked up more than $450m in losses over two years, is down -3.13% in afternoon trade following fresh allegations from a former employee in the US that the bookmaker ‘doesn’t know what it’s doing.’

What’s become the subject of banter between institutional investors are new claims by an unnamed ex-staffer (Mr X) – who incidentally worked in both the Australian and US offices - who within an interview hosted via online service Stream, spoke frankly about the business’s shortcoming and questionable leadership.

US market just not that into PointsBet

As well as pointing to a higher-than-average churn rate, Mr X calls for a change of leadership within PointsBet’s US operation.

Despite an aggressive marketing spend in the US, Mr X argues that the “American market is not that interested in the PointsBet brand”.

Mr X also claimed within the Stream interview that too many partnerships like the ones with NBC and Denver Nuggets - the company’s official gaming team – simply divert money from being invested more meaningfully elsewhere, notably in online betting.

“Nothing’s going to change if senior leadership stays the same,” Mr X noted.

Mr X also suggested PointsBet reconsider its partnerships and invest in iGaming, where it has started to make inroads.

Investors should note that since launching there in 2018, the North American sports betting market now accounts for around half total group turnover.

Losses widen

These unsolicited comments do little to appease investor fears that the ASX-wagering company isn’t throwing good money after bad trying to compete the fiercely competitive North American sports betting market.

Recently released results reveal that while PointsBet increased revenue by 52% to $296.5m, net losses widened to $267.7m.

Usurpingly, PointsBet’s share price has slumped by around -80% over the past 12 months.

PointsBet share price over 12 months.