The board of sports betting heavyweight PointsBet has rejected an AUD 220 million-plus ($153 million) offer for its Australian division made by Rupert Murdoch’s News Corporation and digital wagering pioneer Matthew Tripp. As reported by the Sydney Morning Herald, the board, led by former UBS banker Brett Paton, turned down a non-binding indicative offer from the News Corp Australia-led consortium two weeks ago.
Renowned mogul Rupert Murdoch controls a multi-billion dollar global media empire, which includes the Fox News Channel in the United States, a string of global newspapers such as The Australian, and the Foxtel pay-TV business in Australia. Now his News Corporation company has begun to spearhead a push into wagering at a global scale, as it looks to offset the decline in revenues of its media business.
Media mogul Rupert Murdoch
News Corp Australia, owner of Punters.com.au and Racenet, formalized a partnership with Tripp earlier this year. Tripp is known for having previously grown the Sportsbet brand into the country’s second-largest bookmaker, and established BetEasy in 2014 before selling it to Canadian gambling giant The Stars Group. The News Corp consortium also includes Las Vegas-based online gambling investment fund Tekkorp.
News Corp is expected to launch an online wagering business later this year, following the appointment of the former BetEasy boss Andrew Menz as its CEO. The proposed deal with PointsBet would have given the new business scale to match its ambitions.
Matthew Tripp
The fact that PointsBet has rejected the offer does not alter the timing of the new company’s launch or its bookmaking license, Australian media reports. Instead, the direct consequence is expected to be seen in the size of its customer base when it starts operations. Meanwhile, tech group BetMakers, which is backed by Tripp, is contracted to manage the platforms for the News betting venture.
Agreements between broadcasters and bookmakers have become an increasingly regular practice in the US sports betting market, with broadcasters willing to take an equity stake in betting outfits in exchange for sponsorship rights and brand promotion during live sports events. In fact, Murdoch’s Fox Corp launched bookmaker brand FOX Bet in 2019, with The Stars Group taking a 5% stake in the company, albeit to disappointing results thus far.
Market sources estimate the Australian division of PointsBet, now mainly focused on the US, is worth more than AUD 200 million ($153 million), but the market capitalization of the group is AUD 604 million ($427 million), according to Morning Herald. In August 2020, the company announced a five-year media partnership with NBC Universal to become the official sports betting partner of NBC Sports in the US.
PointsBet, which operates in 10 US states and Canada, has a strong balance sheet with AUD 475 million ($331 million) in cash and equivalents on its books to fund its growth plans. Any additional cash from the deal would have likely allowed it to grow its US division.
PointsBet recently reported its revenues for the first quarter of the year, revealing a 37% increase in Australian turnover to AUD 579.4 million ($404 million). Betting revenues for this division jumped 140% in financial year 2021 to AUD 2 billion ($1.3 billion) following the company’s heightened marketing efforts, which involved an advertising campaign featuring American basketball legend Shaquille O’Neal, to build market share and revenues.
PointsBet said last August it was targeting a 10% share of the local online market by 2025, doubling current levels. Meanwhile, the Australian arm is expected to be EBITDA positive in 2022. The company has also recently announced the completion of a major change in its global leadership team, which included Andrew Catterall’s appointment as Australian CEO, expected to become effective on July 4.
PointsBet continues developing its growth strategy, especially in North America, where it entered the Ontario market on the day of its launch back in April, and has recently received its license to operate in Pennsylvania.
