PointsBet: Goodbye US, hello profit?
By early September, PointsBet shareholders should have a first taste of what Jay-Z-backed money feels like.
Three months after the wagering operator announced the $US225 million ($351 million) sale of its American business to sports betting and merchandise company Fanatics, investors are preparing to receive their first payment: $US175 million.
PointsBet chief executive Sam Swanell will be able to concentrate on the Australian and Canadian business after the sale of the US division. Chris Hopkins
PointsBet Group chief executive Sam Swanell hopes investors will feel confident in the deal, due to complete in March, once that first tranche is delivered in early September.
But with the company’s heavy investment vehicle coming off the books, attention now moves to what PointsBet is calling RemainCo, a considerably smaller business with operations in Canada and Australia.
Mr Swanell was bullish about the prospects of a shrunken PointsBet, telling analysts in July that RemainCo would break even by April and be profitable by the next financial year. This claim is largely based on a significant reduction in PointsBet’s cost base.
PointsBet’s share price exploded in 2020 when the Aussie corporate bookmaker announced plans to move into the US and cash in on the legalisation of gambling across the country. PointsBet was an early mover and it was reflected in the share price, which climbed 170 per cent in 2020 despite the impact of COVID-19 on sports leagues across the world.
A five-year media deal with NBC Universal to become the official sports betting partner of NBC Sports sent shares soaring 78 per cent in one day. At its peak, the stock was trading at $15.41.
But the dynamic quickly changed.
In its 2022 annual report, PointsBet
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