PointsBet, the Australian-based sports betting operator that has been rumored to sell its US division, announced early Wednesday (Tuesday afternoon, US time) that it was in discussions to sell its Australian operations to NTD Pty Limited.
NTD also is an Australian-based operator that owns Australia’s Betr (no relation to the US-based company with the same name).
In the five-paragraph statement, submitted before the start of trading Wednesday on the Australian Securities Exchange (ASX), PointsBet said it issued the statement in response to an article last Friday in The Australian. The company said “it routinely explores options” to provide maximum value for its stakeholders, and that includes offers to sell the company that it receives periodically.
Discussions between PointsBet and NTD are incomplete and preliminary in nature,” the statement read. “There is no certainty that these discussions will result in any binding transaction.”
PointsBet said NTD’s offer would be weighed according to its “global strategy and opportunities.” Terms of the offer were not disclosed in the statement, but The Australian reported the deal could be valued between AUS$200 million and AUS$250 million (US$134.9 million to US$168.6 million).
PointsBet offers racing, sports betting, and iGaming products in Australia, Canada, Ireland, and the US.
Sale to Focus on US Market?
An article in Wednesday’s Australian Financial Review indicated PointsBet selling its Australian division would allow it to focus on the sportsbooks and online gaming apps it operates in Colorado, Illinois, Indiana, Iowa, Kansas, Louisana, Maryland, Michigan, New Jersey, New York, Pennsylvania, Virginia, West Virginia, and the Canadian province of Ontario. PointsBet also awaits final approval for its license in Ohio.
However, unlike its Australian operations, PointsBet’s US division is hemorrhaging cash. The company spent nearly US$110 million in marketing and promotion cost in the past year in the country, and in total, the company lost more than US$180 million for the fiscal year that ended in June.
The article also states the buy could help spur NTD’s Betr to consider entering the US market. It’s backed by former Sportsbet owner Matt Tripp, and the ownership group includes News Corp and BetMakers Technology Group.
If that’s the case, then NTD’s Betr would almost assuredly need to rebrand itself in American markets. That’s because of the US-based Betr, a $50 million start-up focusing on microbetting and using original content from social media star Jake Paul to help acquire customers. That Betr is preparing to start operations as early as this weekend when sports betting becomes legal in Ohio.
Recent Marketing Efforts Panned
PointsBet has been in the news this past month for advertising gaffes it made both Down Under and in the States.
In Australia, a commercial that featured basketball legend Shaquille O’Neal was deemed the worst commercial of the year by the country’s Ad Standards agency. In the commercial, O’Neal is paired with young Australian men, and he struggles to make sense of their accents. The spot reportedly led to a record number of complaints about it.
And the company also received scores of criticism after it tried to gain attention through reports football great Drew Brees, PointsBet’s then-US spokesman, was struck by lightning while filming a commercial for the sportsbook in Venezuela. It turned out to be a hoax as Brees was OK, and the whole premise was to promote PointsBet’s Lightning Bets, the company’s version of microbetting.
In an unrelated move, PointsBet announced last Thursday that it was ending its association with Brees after he agreed to serve as an interim assistant football coach at Purdue – his alma mater – which is preparing to play in the Cheez-It Citrus Bowl next Monday in Orlando. The sports betting operator cited “responsible gaming practices” and “integrity of legal sports betting” among the reasons for the move.
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