It appears a deal is in place. Following months of speculation, PointsBet seems ready to sell its US operations to Fanatics for $150 million.
The companies announced the transaction in a joint statement. PointsBet shareholders will vote on the sale in late June. However, the move still faces numerous regulatory approvals.
Purchase will accelerate Fanatics’ entry into sports betting
Fanatics agreeing to buy PointsBet’s US business will accelerate the company’s push into sports betting.
“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s US business,” Fanatics and PointsBet said in a joint statement. “While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
There are still questions about what will happen to PointBet’s other global markets.
In April, it was reported that PointsBet hired investment bank Moelis & Co. to explore a sale of its US and Canadian sports wagering business. However, the PointsBet Ontario operations were not mentioned in the sale. Meaning the company is retaining its Canadian sports wagering unit at this time. PointsBet will also maintain its online casino operations in Ontario as well.
PointsBet bullish on Canadian operation
On May 17, Gaming News Canada confirmed that PointsBet was remaining in Canada. Sam Swanell, the managing director and Group CEO of PointsBet sent GNC the following statement:
“The decision to keep Canada part of the new PointsBet is very deliberate,” Swanell said. “Keeping Canada means shareholders retain exposure to the North American Market through a jurisdiction that is more attractive than most US states. If you look at the primary driver behind the sale of our US assets in terms of the level of cash investment required to ultimately reach profitability, our present situation and the outlook in Canada is fundamentally different. We see a path to profitability in Canada within 18-24 months, without the need for significant additional capital.
“ In our first year of operations in Ontario, we have managed to cut through and establish brand awareness in one of the world’s most competitive sports betting & iGaming markets and we plan to build on that momentum going forward,” he said. “As part of the transaction (with Fanatics), we retain control of our technology stack – consistently rated by independent industry experts as a Top 3 product and platform – including our market-leading live in-game betting capabilities.
“We have a very exciting roadmap ahead of us, particularly on the online casino side, which will better equip us to compete in the large and growing casino segment, and complement our existing strength on the sports betting side.”
PointsBet also appears to be keeping its Australian business as well. The operator was in negotiations to sell its Australian operations late last year. However, negotiations with a potential buyer have ended.
PointsBet succeeding in the Ontario gaming market
PointBet’s Ontario operations are seemingly doing very well at the moment.
The operator saw its net win hit $4 million in the third quarter of fiscal year 2022. That’s up 21% over the previous quarter. Most of that came from online casino’s $2.4 million, followed by the $1.6 million net win from sports betting. PointsBet had 28,000 Canadian customers during the quarter as well.
There was a bit of a dip during the fourth quarter of fiscal year 2022. PointsBet generated $11.1 million in handle and $500,000 in gross gaming revenue. However, there appears to be optimism for growth. PointsBet has reported double-digit turnover growth in its US and Canadian operations, with an 18% year-over-year increase.
It appears that there is more money to be made if PointsBet decides to continue moving forward in the Ontario online gambling market.