Betr set to buy out PointsBet’s Australian arm in $250m deal

Betr has acquired funding to buy the Australian-facing business of ASX-listed bookmaker PointsBet. The two companies have been in discussions since late last year, after PointsBet rejected Betr’s initial offer in early 2022.

Matthew Tripp, formerly CEO of major betting brands such as Sportsbet and BetEasy, founded Betr in 2022. The company is owned by News Corp Australia, ASX-listed BetMakers Technology Group, and Las Vegas-based Tekkorp Capital.

Since the bookmaker launched late last year, News Corp has invested millions of dollars into the start-up, increasing its stake in Betr to 47%. According to the media group’s disclosures this month, that investment has made a significant dint in News Corp’s finances with no expectation of immediate returns.

However, after engaging Barrenjoey Capital Partners Pty Ltd, Betr was able to secure the capital needed to buy most of PointsBet. The deal is expected to be worth $250 million, and if successful, Betr will acquire around 232,000 Australian customers. The company will also be able to consolidate its position in the continuously growing online gaming sector against giants like Tabcorp and Sportsbet.

READ: Best online bookmakers in Australia for 2023

In a note to clients earlier this month, Aitken Mount said Betr’s decision to pursue PointsBet and assimilate its customers made more sense than trying to build a new user-base from the ground up.

“You can see why Matt Tripp and his partners would be interested in PointsBet’s Australian operation as it is sure as hell far easier than growing a 240,000 customer base that is profitable from scratch,” Aitken Mount’s Angus Aitken wrote.

“(It) gives them something as a cashflow generator … they should buy Tabcorp in time. To me, Tabcorp are the NAB of wagering, slow, lazy and a company of missed opportunities.”

Besides Australia, PointsBet has operations in the US in states like Iowa, New Jersey, and Colorado, and a market capitalization of $430 million.

Tripp, Betr chief executive Andrew Menz, and other executives in the company met with industry stakeholders this month concerning the deal. There, Menz stated that Betr intended to expand its influence in the Australian market.

“We haven’t hidden our growth ambitions, be that through our disruptive customer offers or through M&A,” he said.

“There’s great momentum in the business already and we’ll continue to look for step-change opportunities to win share in the Australian wagering market and to enhance our offering to customers.”

Betr has already run afoul of Australian gambling regulators, due largely to its activities during the Spring Racing Carnival last year. The sports betting company offered patrons $101 odds on all runners in the 2022 Melbourne Cup and sent promotional messages to people without their consent.

After an investigation into Betr’s advertising in News Corp publications, the company was found to have violated the responsible gambling code and fined $20,000 in December last year. The penalty was increased to over $75,000 earlier this month when more charges were attached.

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