Betr Looking to Purchase PointsBet Aussie Business

Betr Looking to Purchase PointsBet Aussie Business

The landscape of Australian sports betting may be changing dramatically in the near future. Last week, multiple sources confirmed that Australian-based sportsbook PointsBet is looking to sell its Australian business to NTD Play Limited. NTD Play Limited is best known for Betr. The transaction would continue Betr’s acquisition trend. The company recently purchased TexBet for $10 million.

PointsBet Looking to Sell Aussie Business to Betr

Back on December 23rd, The Australian published an article claiming that PointsBet was in takeover talks with NTD Play Limited. This prompted PointsBet to issue a statement last week confirming this fact.

The presser states the company “routinely explores options to maximise value for shareholders, including evaluating proposals from third parties.” It continued by stating that the company confirms that discussions are underway and says that talks are “incomplete and preliminary in nature. There is no certainty that these discussions will result in any binding transaction.”

While PointsBet isn’t giving details on the takeover, The Australian speculates that the deal could be worth from AUD $200 million to AUD $250 million. This would be a significantly larger takeover than one of Betr’s most recent acquisitions. Back in August, Betr acquired TexBet for $10 million.

Move Being Made by PointsBet to Expand in the United States

Many speculate PointsBet is making this move to focus on its United States operations. The company presently operates in 14 U.S. states, with the most recent launch happening on New Year’s Day in Ohio. Sam Swanell, CEO of PointsBet, states that the company plans to expand aggressively into the U.S. market. The sale of the company would significantly boost the cash reserves for the company.

PointsBet United States

PointsBet is taking full advantage of the expansion into the United States. According to revenue reports, the company saw a 50% year-over-year growth of its handle in Q1 FY23. It also saw net earnings double to $18.7 for the same period.

According to independent research firm Eilers & Krejcik, PointsBet’s app is the third-best app in the nation. It only trails FanDuel and DraftKings. Both companies are the clear industry leaders in the United States for sports betting.

Will This Time Be Any Different Than the Last?

If this news story looks familiar, that’s because you’ve been paying careful attention to industry news. This is the second time that Betr has been in discussions to purchase PointsBet. In June, the company offered between AUD $227 to AUD $310 million to acquire the company. At that time, the PointsBet board outright rejected the offer, deeming that the offer was too low for consideration.

So, what has changed? As mentioned earlier, PointsBet is looking to expand further into the United States. The influx of cash from the sale can help it achieve that goal. The company can also continue further expansion into Canada.

You’ve likely noticed that the projected sale price is lower than Betr’s offer earlier in the year. PointsBet in the United States will need to shore up its cash reserves, especially after the last two financial years. The U.S. version of the company has lost around AUD $661 million over the previous two years, primarily due to expansion costs. As a whole, the company spent AUD $238 million in marketing and sales expenses in 2022.

Couple that with the likelihood of a U.S. recession in 2023, and Betr could be putting PointsBet in a position where they have to sell now. While the United States market will be very lucrative once it is matured, PointsBet needs capital to survive. Betr will be well-suited to provide the capital and strengthen its grip on Aussie sports betting.

Henry Walker

Henry Walker

Head of Casinos

Since 2017, Henry has brought his professional insight and passion for casino games to the world of Australian Internet Pokies. He’s our resident fact checker who goes through online casinos with a fine-tooth comb, searching for the best casinos, pokies and promotions.

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