US push likely as PointsBet confirms talks to shed Australia business
ASX-listed operator reveals early-stage discussions with News Corporation-backed Betr
PointsBet’s US operations look set to receive a potential boost after the operator confirmed it is in discussions over a sale of its Australia-based operations to News Corporation-backed NTD Pty Limited (NTD).
Reports emerged in the Australian press over the Christmas period claiming a potential breakup of the business, which has operations in its native Australia, the US and Canada.
On December 28, PointsBet confirmed its talks with NTD over a potential transaction but suggested these were part of a “routine exploration” of ways of generating shareholder value.
The operator also noted that any transaction would be “assessed in the context” of PointBet’s global strategy and opportunities.
The admission prompted a number of inquiries from the Australian Securities Exchange (ASX) regarding an increase in the trading of shares between December 15 and December 23, prior to the news reports emerging.
In its responses, PointsBet confirmed discussions with News Corp began on November 16, citing its earlier communiques surround the potential deal.
Set up in April 2022, NTD’s backers include News Corp, Tekkorp Capital and former BetEasy CEO and Australian sportsbook veteran Matt Tripp, as well as counting ex-Fox Bet CEO Robin Chhabra as an advisor.
The business, which operates the Australia-facing Betr brand, has previously been credited with interest in PointsBet’s Australia business, with the Sydney Morning Herald hinting at a potential A$220m deal in April, a bid which was unconfirmed at the time.
Should these latest confirmed talks lead to a divestment of the Australia business from the main group, the most likely beneficiary would be its US and Canada businesses.
PointsBet operates in 14 US states, recently launching in Ohio, and the Canadian province of Ontario. Its sportsbook app was recently rated third out of 40 sportsbooks assessed by independent US research firm Eilers & Krejcik Gaming.
In its most recent set of financial results, PointsBet’s US turnover rose 50% year on year (YoY) to A$523.8m, while the Canadian business saw turnover growth of 31% to A$20.9m on a quarter on quarter (QoQ) basis.
At a divisional level, PointsBet’s US operations once again proved to be the strongest division for the group, reporting 101% YoY growth in total net win, which jumped to A$29.5m from a prior high of just A$14.7m.
Igaming led the charge for PointsBet US, delivering 229% YoY growth in net win to A$7.2m, while sports betting operations in the US reported an increase of 78% to A$22.3m over the same comparable period.
In contrast, PointsBet Australia saw QoQ growth of just 2%, with total net win slumping 14% to A$47.5m, and Q1 FY2023 marketing expenses of A$25.2m.
PointsBet has also dramatically ramped up of its US operations over the last 12 months, stemming from a A$94m investment from Rotterdam-headquartered investment firm SIG Sports Investments Corporation (SIG Sports).
The investment, which made SIG PointsBet’s largest shareholder, has seen an increase in investment on in-play betting, as well as the launch of the Lightning Bets in-play feature.
Revealed in its last financial call, the sportsbook and igaming operator is using a strategy designed to attract so-called “super users” over traditional recreational players in the US, something which could ultimately be enhanced by the increased funds available from the Australian business sale.