PointsBet Looking To Sell North American Assets
- May 21, 2023
- 3 min read
The North American gambling industry has made great strides in recent years. However, gaining a good market share is not an easy task. That’s why PointsBet have announced that they are to sell their North American operations.
It’s been announced that Moelis & Company have been hired to achieve this. The decision has been taken after PointsBet have been unable to increase their share of the US market. At present they are only the seventh-largest sports betting operator, lagging behind companies such as DraftKings and FanDuel.
Towards the end of last year there was talk of PointsBet being sold to Betr. No deal with the Australian gambling company was ever completed. Another company interested in purchasing PointsBet has been Fanatics.
Recent months have also seen the company attempting to sell their Australian assets. There have been interested parties but nothing concrete has been achieved. NTD Limited (who are owned by NewsCorp) had been looking at purchasing the Australian assets but with no progress being made. It is believed a price of £135.3m ($168m) was needed to clinch the deal.
With no movement on that front, PointsBet are now looking at leaving the North American market. In response to reports that this was the case, a spokesman commented that they believe “further industry consolidation is inevitable” and that they will “position PointsBet to take advantage of movement in the sector.”
2022 ended well for PointsBet with the final three months producing turnover of $935.3m. The gross win increased to $113.8m and that figure was up 14% when compared to the same period in 2021.
US contribution to total turnover was $1.05bn, up 75% with a 32% increase for gross win. October and November were particularly strong months for them due to a strong trading performance. In-play betting has made a major contribution accounting for 53% of overall handle, 6% higher than in the previous period.
PointsBet have a deal with NBCUniversal that saw them become the exclusive betting partner of the television company. They had an equity stake in the gambling company and last year saw some changes made to the agreement they have. The deal has been extended by a couple of years and that has reduced the upfront cost incurred regarding advertising.
There had been an increase in the cost of their operations when comparing the third quarter of 2022 to the second. More was spent on marketing, something needed to try and increase their share of what is a highly competitive industry.
Savings had also been made by closing their operations in the state of Massachusetts. According to americanbettingapps.com, US online betting guide, they still operate in 14 other US states so there should be keen interest in acquiring their sports betting assets.
It was four years ago that PointsBet launched in the US. That was the year after a US Supreme Court Judge made a ruling that changed the American gambling industry. It stated that individual states could make the final decision on whether or not to make gambling legal.
New Jersey had been at the front of the campaign to change the gambling laws. This has now seen over 30 US states making betting legal and that’s been good news for the gambling industry. It’s been helpful for US states who receive millions of dollars in gambling tax revenue.
PointsBet had been founded in Australia but as with other overseas gambling companies saw a chance to become successful in the US market. The company opened up in several states such as New Jersey, Iowa and Illinois.
The battle for a good enough market share to cope with all the costs that are incurred has been seen in other countries too. STSBet from Poland have recently withdrawn from the UK gambling market to concentrate more on their home market. It’s just not easy moving into other countries and getting a good share of the market.
If PointsBet does sell their North American assets, it’ll be interesting to see just who acquires them. It’s becoming increasingly difficult for companies to break into the top three that’s currently held by FanDuel, DraftKings and BetMGM.
The coming months and years are likely to see the US gambling industry continue to expand. More states are expected to make betting legal but it’ll be the usual suspects who then apply for licenses and those not earning a high share of the market are unlikely to see that situation change even with further expansion.
