PointsBet finalises sale of US outfit to Jay-Z backed Fanatics

Paton acknowledged shareholder disappointment over the poor share price performance since it began pouring money into US expansion in 2021. He also acknowledged the group was selling the US outfit at a loss.

“Let me say on behalf of your board that we understand your disappointment about the share price performance of our company. As shareholders ourselves, both [PointsBet chief] Sam [Swanell] and I understand the deep concern and frustration that this has caused you,” Paton said.

Fanatics won an 11th hour battle for PointsBet’s US operations by upping its bid by more than $100 million. A number of analysts said the DraftKings bid was launched to block the Jay-Z-backed rival from entering the competitive US betting market. Through the deal, Fanatics gains access to PointsBet’s wagering technology and 14 critical gambling licences in key US states.

PointsBet chief Sam Swanell said the acquisition was well-timed now the local regulatory environment was set to change after 31 recommendations raised by the House of Representatives standing committee on social policy and legal affairs after the recent online gambling harm inquiry.

One of the major potential outcomes the Albanese government will now consider after the inquiry report is whether to ban all forms of gambling advertising within three years. Swanell said he looked forward to working with the government and other stakeholders affected by a potential ban to come to an arrangement together. A comprehensive ads ban could be damaging for PointsBet, known for its heavy marketing spend and brand ambassador Shaquille O’Neal.

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“We believe as a net-net, we would welcome standards being adhered to at the level at which we operate, and that our established place in the market from a brand perspective that it won’t inhibit our growth going forward,” he said.

Swanell then said it was worth pointing out that PointsBet pays about 50 per cent of each dollar won from a client to the government in some form.

“The racing industry has come under some pressure from turnover because there’s pretty much been non-stop increases in these fees and taxes. I think there’s a broad recognition that we’ve reached the peak levels of tax in Australia, unless you want to kill it [the wagering industry]. That has consequences for the racing industry, sporting bodies, media companies” Swanell said.