PointsBet is confirmed to be selling its US business to Fanatics for US$225m after shareholders voted overwhelmingly to support the move.
The Australia-listed company saw 99.16 per cent of its shareholders vote for the move, which will give Fanatics access to several US states in its push to grow its sports betting arm – and will allow PointsBet to focus on its Australian and Canadian businesses.
DraftKings had submitted a $195m bid for PointsBet’s US business – a 30 per cent boost on Fanatics’ initial $150m bid – but DraftKings failed to formalise its offer before Fanatics boosted its own by 50 per cent.
Paton said PointsBet expects to be at or around EBITDA breakeven following the sale of the US business, “with the profitability of the Australian business expected to significantly offset the expected near-term losses of the Canadian business as the latter builds scale.”
Indeed, he added that while the Canadian asset is currently a “challenger brand” in the country, the lack of partner revenue share agreements, the “nominal licence fees” and an “acceptable” effective tax rate of 18 per cent make the Ontario market “attractive” for sports betting and igaming operators.
“The lower capital requirements and higher operating margins relative to most US states create strong prospects for attractive future economics,” Paton said.
The new PointsBet
PointsBet will retain ownership of its proprietary sports wagering and igaming platform that is currently used in both the Australian and North American markets.
“We will be granted a perpetual, royalty-free licence to use and further develop the Banach technology assets - including the underlying source code driving OddsFactory,” Paton added.
“This will give us options in the future to exploit PointsBet’s proprietary sports wagering and igaming platform in other regions outside of the US and in the US beginning 18 months after completion of the proposed sale.”
Paton said he expects PointsBet to “grow market share” in Australia and Canada, in which both businesses will be “well capitalised.”
