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PointsBet to Raise $81 Million for US Sports Betting Plans

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With competition heating up in the United States sports betting market, PointsBet is looking to raise up to $81 million to fund its expansion efforts.

A number of areas in the business need additional funds for further growth. This cash will be going towards client acquisition, marketing, technology and product development. Funds will also be needed for the development of its US positions, such as for licensing fees, market access and to fund the costs associated with operating sportsbooks.

PointsBet is a public company, which means that it will be raising these funds through the issuance of shares. In total, there will be 16.66 million new shares issued. Both retail and institutional investors will be able to buy these new shares, albeit at different prices. All of these new share offerings will have a close date of November 22, 2019.

It was in June that there was over $50 million raised following an IPO which took place in Australia.

Current positions in the US market

PointsBet is aiming to be a major player in the burgeoning US sports betting sector. It is currently in the process of getting its mobile offering live in Iowa by the close of 2019. It also aims to have its mobile offering live in Indiana in time for the Super Bowl.

As PointsBet has a few different market access deals, it has the scope to quickly enter markets in different states. The most significant of these partners is Penn National, which will give PointsBet access to five states. These are Ohio, Missouri, Louisiana, West Virginia and Indiana. While sports betting is not currently legal in three of those states, this will likely change in the coming years.

Its main position to date in the US sports betting market is in New Jersey. The Garden State’s sportsbooks have been a great success story since first launching in June 2018, shortly after the ending of the federal ban on sports betting.

Pointsbet Website

The state saw a new monthly sports betting handle record in September 2019, with $445.6m worth of sports bets made. The sportsbooks saw a resulting revenue of $37.9m.

PointsBet has been in the New Jersey market since December 2018 having partnered with the Meadowlands Racetrack.

From July 1 through to October 20, PointsBet has seen a total sports betting handle of $65 million. Of this total handle, about $50.5 million of it comes from its New Jersey mobile offering, which is a market share of 6.7%.

Plans going forward in the sports betting space

As time goes on, more and more states are going to legalize sports betting. With each state to do so, this represents yet another opportunity for sportsbook operators to battle it out to be the leading offering in the given state.

PointsBet has three other partner agreements in place in addition to the Penn National deal. It is partnered with the Catfish Bend in Iowa, where it is hoping to launch its mobile offering by year-end.

It has an agreement with the Double Eagle Casino in Colorado, a state where there is a referendum taking place in November that will decide on the state’s legal sports betting framework.

Finally, PointsBet has a deal with the Hawthorne Racecourse in Illinois. This is a facility that is only ten miles from Chicago and there are plans to build a new casino on the site as part of a statewide gambling expansion plan.

The company also plans to target more high stakes clients going forward. This can be done thanks to the risk management systems that are in place, which will help PointsBet stay profitable in this market segment.

Andrew O’Malley has a BSc in Economics and Finance. He has worked in the finance industry as a risk analyst and now he is pursuing a career in writing. In recent years, he has written for a number of leading publications, focusing particularly on the areas of gambling, finance and cryptocurrency. He has worked closely on projects evaluating online casinos and bookmakers, as well as reporting on industry news. Andrew is a sports fanatic and can be found glued to any and all types of sports each weekend. As an Irishman, he loves his Gaelic Games, as well as closely following football, golf, horse racing, rugby union, tennis, American football, basketball and MMA. Contact him at Andrew@beanstalk.io

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