From his chair in his first-ever corner office in PointsBet’s new building in downtown Denver, Ron Shell can look out upon Ball Arena and Empower Field. Framed on the other side of the window is Coors Field.
When Shell, the Australian company’s vice president of customer and insights, looks out over those arenas, he sees part of the reason why PointsBet executives opted to plant their American headquarters here. Lots of teams firing lots of interest. The sports betting operator has a partnership with the Kroenke Sports & Entertainment-owned Colorado Avalanche and Denver Nuggets, and the building where they play a short walk from the office the companies to fill with 200 employees.
That Colorado, with that full slate of professional and major college teams and 5.7 million in population has validated the near-giddy promise the industry foresaw in this mobile and online sports betting market was a draw for PointsBet. But it could have overseen that from any state or back in Australia.
Why PointsBet saw Colorado as an ideal fit for US base
Prospectors came mining for gold in the the1850s, but PointsBet came in October of 2020 to reap the sizable vein of tech talent surrounding Denver, Ft. Collins and Boulder. It also forged a landmark sponsorship deal with the University of Colorado Buffaloes, as the school became an advertising partner and, in effect, an affiliate. The five-year deal locked in Points Bet – who must provide funding to the school – as the Buffaloes’ partner in sports betting, fantasy sports and gambling. The University of Colorado Buffaloes are part of the “Power Five” in collegiate sports.
PointsBet has found its own claim. It perhaps followed a similar path as pinnacle betting brand DraftKings, which mushroomed in Boston amid a copious amount of local able coders, data scientists and engineers and after opening an office in Las Vegas in January 2020, signed on as a sponsor of the Center for Gaming Innovation at UNLV with a stated goal of “access to local talent.”
“We could have chosen anywhere out in the States,” Shell said in an interview with PlayUSA. “In the end it really came down to Denver and Austin, which I hear is a common theme with a lot of tech-based companies, choosing where to headquarter for the U.S.
“I think Colorado won out because the area is brimming in the last few years with tech talent, but also just generally, a young professional talent as well. We’re looking to double, triple our workforce over the next two or three years and we really wanted somewhere that is a destination, and it’s such a right quality of life. I think everyone here talks about it a lot, but it’s true. There’s not many better places in the U.S. in terms of quality of life and cost of living, that combination.”
Location, location, location also pertained not only in terms of cheaper cost of living than the company’s previous US hub in New Jersey, but also time zone, with Mountain Standard allowing PointsBet’s offices to “work with different time zones in the US and even with Australia to keep operations 24/7,” She said. So did, Shell said, a favorable tax rate, and adding the affiliation with the university “made Denver a clear number one choice.”
That Colorado was in the process of legalizing sports betting when PointsBet was mulling its options – while Texas remains a far-off possibility – also factored in the decision.
“Definitely,” Shell acknowledged. “And I think there’s a lot of nuance to site-by-site regulation. We wanted it to be in a place that we knew would legalize at least in the short term after we moved because that means, as well, that we can hold a lot of operations here.
“I ran customer service and sports analytics and that might not have been possible by different state regulations if you operate in a state that doesn’t have a legal sports betting legislation. So a hundred percent that.”
PointsBet sees the University of Colorado as a training ground
PointsBet had established contacts within the engineering department at the University of Colorado and held recruiting seminars and talks featuring company executives on campus through March before COVID-19 mitigation. The education process goes in both directions.
“Sports betting is still relatively new and it’s our view to work very closely with the University of Colorado to provide that education, firstly, around sports betting, to work with them, if they are moving toward sports betting-related modules or courses and to definitely be on site when we can obviously, COVID, permitting,” Shell said.
Shell said PointsBet executives were deluged with questions on one particular career day. The company, he said, will continue to work with professors to offer guidance in terms of curriculum if actual coding curricula involving sports betting develops. Otherwise, he said, the company will just continue on campus for recruitment.
PointsBet’s tech needs require two different types of expertise: computer engineers and quantitative analysts.
“It is those data scientists and it is that more dedicated computer engineers and you’ll find that a lot of people, there’s a crossover here because you think of an app and you think of just engineers and tech,” Shell explained. “But outside of that, we have a lot of quantitative analytics and our sports traders all have financial backgrounds or data analysts, backgrounds.
“So there’s a lot of areas of the business that touch on those two areas. So we find that when we go and speak to even engineers, some of them are interested more in the trading side of things and then vice versa. But yet they do specialize in those areas and that was a big reason, knowing that there were those types of courses that people would come in and take [at the University of Colorado]. If we were able to partner ourselves closely, be based here as a local company, that we would be able to insert ourselves into the conversation when these graduates are coming out, looking for their first job.”
Shell said initial conversations with local and university officials were ameliorated by assuring them that PointsBet was “a tech company all our technology and happens to be an expert in sports betting.” So was, he said, assuring them that the partnership was going to be about more than a logo.
“That’s how all those conversations are framed and that’s what really excited them. And then I think the second thing is the fact that we were here and able to have the face-to-face conversations,” Shell said. “We were entering into an unknown area, college sports, and a college university partnering with sports betting. So to be able to have those conversations and talk about the key pillars of things that are really important, like responsible gaming, making sure that underage people are not exposed to advertising and there’s no predatory things or things like that. That was a huge pillar of the relationship from the start.”
Shell said PointsBet could tell from the outset of relocation inquiries that Colorado officials were interested. Assuring them of the reasons, even after setting up shop, was important he said.
“One of the first things we did was to form a close relationship with the state and explain to them ‘Why did we move here? What are our intentions here? How do we hope to bring value to the state of Colorado?,” he said. “They were very excited. One, because we’re a growing company. So they know that we’re going to have extra jobs over the next few years, but to the space we’re in as well, the fact that we were the only one in an industry that’s growing in the U.S. in general was another reason they wanted to talk to us.
“And then that’s where a lot of introductions happened, whether it’s universities, local business, local businessmen, um, the sports team, um, I found it to be an extremely welcoming site. Once they obviously found out that we were moving our corporate headquarters here, the amount of introductions and conversations we had in the first few months definitely led to all these partnerships, including Colorado and including the Kroenke deal.
PointsBet sought to make itself the home sportsbook in Colorado
More than a dozen legal Colorado sportsbooks operate in the state, with Circa Sports a notable Nevada interloper joining national brands like DraftKings, FanDuel and William Hill. Establishing a headquarters, and getting in the state early, Shell said, will allow PointsBet to market itself as the hometown option.
It’s looking like a lucrative market, so far.
Colorado sports betting launched on May 1, 2020. PointsBet launched in Colorado in mid-November, 2020. In December, Colorado became the fifth to surpass $1 billion in the overall handle and the state Department of Revenue reported last month that $284.5 million in bets had been placed there in December, marking a 23% over November.
Colorado bettors wagered a state-record $326.9 million in January, according to a Colorado Division of Gaming report.
“We look to try and push that message wherever we can,” Shell said of the local angle. “I think it is really important. People here love to support local business and other businesses that show that they do have skin in the game in Colorado. We do care about the sports teams, about the students coming through the university system and most of the company’s based out here, so it’s not just lip service where we say Colorado is “There’s a huge benefit to us as being localized in that hometown sportsbook. And we’re definitely going to make sure that everyone knows that.”
As part of the $1.625 million, five-year advertising agreement between PointsBet and the University of Colorado, the school will receive $30 referral for every new customer it diverts to PointsBet, according to Sports Illustrated, which obtained a copy of the contract. Though there is no rule prohibiting universities from entering such agreements, Colorado vetted the idea with the NCAA and Pac-12, according to the website. PointsBet also created a $75,000 fund yearly intended for “supporting the development of CU student athletes and PointsBet recruitment.”
Colorado athletics director Rick George said in a release announcing the deal that the university was “particularly excited whenever we can partner with sponsors who call Colorado home.”
They can – for multiple reasons.