PointsBet Looking to Sell US Division, Bally’s and Penn Entertainment Interested
Sportsbook operator PointsBet has contacted New York investment bank Moelis & Co. about a plan to sell the American side of its business.
Sources told Australian Financial Review that the long-proposed sale of the Aussie part of PointsBet has “gone cold.” Now, the operator is looking to offload its US division instead.
Both parts of the business have been rumored for several years to be up for sale for the right price. However, PointsBet US has struggled to get a foothold in the US, which has limited interest from potential buyers.
FanDuel, DraftKings, and BetMGM control more than 85% of the online sports betting market in the US. This has made things difficult for smaller operators like PointsBet.
The company lost more than $180 million over the 2021/2022 financial year. But things have since rallied after cost cutting efforts. Including a 24% cut in marketing budget announced in its Q2 report from January of this year.
There are reasons potential buyers could still be interested in PointsBet.
The operator is reportedly sitting on a $390 million cash pile, and it is licensed to operate in 14 legal states. The latest launch was in January in Ohio. It did secure a Massachusetts Gaming License in February, but then withdrew from the market in a surprise move.
PointsBet has also been on sale for a good while, at least according to the rumor mill. So it could be available at a favorable price.
CEO Sam Swanell has previously quoted a $250 million price tag for either side of the business.
Interested buyers for PointsBet that have been mentioned include Bally’s Corporation, Penn Entertainment, and the outside shot of fellow Australian operator Betr.
Bally’s has previously expressed interest, with the experienced land-based operator determined to get back into the sports betting market after a series of less-than-stellar investments.
In 2021, Bally’s bought fantasy sports operator Monkey Knife Fight for $125 million, only to unexpectedly close it down in February of this year.
“We’re not going to make the same mistakes we made previously, so we’re looking at all adoptions in the most profitable way,” said Bally’s CEO Robeson Reeves last month.
Meanwhile, Australian company Betr had a $220 million bid for PointsBet’s AUS division rejected in December 2022. PointsBet did not feel that offer met the market value, with its US division likely valued at a similar point.
Betr has been looking at moving into the US, and they already have a relationship with PointsBet. However, they would have to make a new name for themselves if they did so, as social media superstar Jake Paul announced his new Ohio-based sportsbook brand Betr in January.
The $50 million startup is focused on “micro bets,” or highly-specific in-game bet lines, and it has just began taking legal bets in Ohio this week.
The last party potentially interested in buying PointsBet US, for now, is Penn Entertainment. The Hollywood Casino chain and Bartstool Sports owner already holds a 7% stake in PointsBet’s Australian division.