PointsBet in discussion to sell Australian operations to Betr

PointsBet is reportedly considering selling off its Australian operations. The company announced on Wednesday in a statement to the Australian Securities Exchange (ASX) that it was in talks with NTD Pty Limited, the owner of Australian-based bookmaker Betr, for a potential deal.

PointsBet submitted its five-paragraph statement to the ASX before trading began on Wednesday. There the company stated that it regularly reviews options that would provide the utmost value for its stakeholders, and exploring offers to sell the company is one of them.

“PointsBet confirms that it is currently in discussions with [the] owners and operators of Australian wagering operator Betr, regarding a potential transaction involving the sale of its Australian trading business and notes that any potential transaction will be assessed in the context of PointsBet’s global strategy and opportunities,” the statement read.

The company revealed that the discussions for the sale were still “incomplete and preliminary in nature,” and it was not certain they would eventually lead to a binding transaction.

The statement did not reveal the terms of the offer; however, the deal was speculated to be valued between AUS$200 million (US$134.9 million) and AUS$250 million (US$168.6 million).

PointsBet has subsidiaries in Australia, Ireland, Canada, and the U.S., all of which offer racing, iGaming, and sports betting products. The company revealed that its Wednesday statement was in response to an article released in The Australian last Friday.

Betr is led by Andrew Menz, former BetEast executive and gambling entrepreneur Matthew Tripp. Besides Betr, Tripp is also the brains behind other Australian brands like BetEasy and Sportsbet. If the sale comes through, Betr will have access to the technology needed to continue its progression.

Earlier this year, the company had acquisition discussions with PointsBet, but its bid was rejected. Betr had reportedly offered between $220 million and $300 million, but at the time, the offer was not put to the shareholders. The company went on to purchase TexBet, an online bookmarker in August for around $10 million.

If Betr succeeds in the recent takeover attempt, the company will have at least 232,000 new customers in Australia, which contributed to over $600 million in turnover during the September quarter.

After the announcement, PointsBet’s share price increased by more than 7% after losing over 80% in 2021. The company closed out its trading at $1.40, 4.5% up from the previous price.

In August, PointsBet stated that by 2025, it intended to get up to a 10% share of the Australian online sports betting market, which is double its current level.

PointsBet is the seventh-most prominent gaming operator worldwide, with a 3.7% market share in America’s $13 billion-a-year sports betting market.

If the company were to sell off its Australian division, it would be able to pay more attention to the online gaming apps and sports books in its various subsidiaries in Michigan, Colorado, New Jersey, Illinois, Iowa, Louisiana, Maryland, West Virginia, and several others. The company is also waiting for the state of Ohio to issue the final approval for its license.

In two consecutive years, PointsBet has recorded significant losses in the US market despite investing $162 million in the market alone and spending $240 million on sales and marketing.

The company defended the expenses incurred by its U.S. expansion in August, stating that North America was evolving into one of the largest wagering markets. This, according to PointsBet, was due to the structure of the region’s sports market as well as the size of its population. North America’s sports market has reportedly allowed fans to focus on specific sports rather than minor local sporting codes.

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