Report: PointsBet explores potential US business sale as bank hired

for sale sign
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According to reports in Australia, PointsBet is considering offloading the US arm of its business and has hired New York-based Moelis & Company to provide guidance through the process. 

As first reported by Australian Financial Review, PointsBet executives have hired the investment bank to explore all options, including a full sale of the US sports betting business as rumors continue to swirl about the long-term future of the company. 

The Australian native business has been subject to several takeover bids in recent months, most notably by Aussie competitor firm Betr, as increased competition in the region leads to M&A discourse. 

Whilst those offers were swiftly rejected having failed to meet the necessary valuation, the US sports betting business is now up for grabs, with a spokesperson telling AFR that the company anticipates “further industry consolidation”. The spokesperson added: “We’ll position PointsBet to take advantage of movement in that sector.” 

PointsBet surprised industry observers earlier this year as it backed out of the Massachusetts sports betting market at the eleventh hour, despite having received the necessary approvals for a category three online license. 

At the time, PointsBet told SBC Americas that its existing jurisdictions provided a big enough market to target, and that further expansion would not be necessary. 

Part of the statement read: “We have chosen this path to emphasize our continued focus on our 14 live states of the US (plus Ontario) and how we can best optimize those markets, which provide an immense TAM for us to go after.”

As well as pulling out of Massachusetts, PointsBet reduced its cost base once more as it renewed its deal with NBC Universal, securing a deal until August 2027 whilst also reducing its marketing spend as part of the agreement. 

In Q4’22, PointsBet USA recorded net revenues of $28.4m – up 68% on 2021’s corresponding results, whilst its sports betting operations yielded $19.9m – up 51% YoY with handle also increasing 75% to $735.5m. 

Despite year-on-year growth, PointsBet has found it difficult to break into the top five operators, with the US sports betting market becoming ever more dominated by the likes of FanDuel, DraftKings, BetMGM, and Caesars. 

With Fanatics set to make a big splash in the online sports betting market later this year, it is perhaps not surprising that PointsBet is seeking to maximize the value of its business at this time.