- US Online Poker
- US Online Casinos
- US Online Sports Betting
Penn National and PointsBet have extended their partnership to give the Australian sports betting operator access to Pennsylvania and Mississippi.
Penn CEO and President, Jay Snowden said:
“With the addition of Pennsylvania and Mississippi, we are pleased to expand our market access partnership with PointsBet to seven States. We have a great working relationship with the PointsBet team and are thrilled with the performance of our equity stake in the company since inking the original agreement. While we continue to value our equity stake in the company, the release from the disposal restrictions will provide flexibility as we assess our future capital management plans.”
PointsBet is already up and running in:
Pennsylvania online casinos, poker and sports betting are all up and running already. The Mississippi part of the deal is speculative for now. The latest attempt to allow mobile online gaming failed when none of three bills made it out of committee.
PointsBet will have to wait for legalization before it can launch in MS, which may not happen for a long time. However even in PA there may be a delay. Pennsylvania law only allows one sports betting skin per land-based partner. Penn National has multiple casinos, yet these all have online partners already:
Penn is building a mini-casino in York, but it isn’t yet open. “We expect to open during the second half 2021; more details to come in the coming months,” Jeff Morris, Penn National vice-president of public affairs told ABC27.
The good news for PointsBet is that the state seems willing to make exceptions when it comes to online brands launching in advance of the physical properties. For instance, Cordish Companies’ PlayLive! brand began taking signups before either of its casinos opened their doors.
US revenues for PointsBet have soared since it first launched in New Jersey in January 2019. Total handle in the last half of 2020 was $649 million, up 345 percent compared to the same period in 2019.
Part of its success is down to Points Betting, a unique product with variable payouts. When choosing this option for a spread or totals bet, the player’s winnings or losses will depend on the margin by which the actual score differs from the line. For instance, a $10 Points Bet on Over 43.0 in a football game would pay out $10 on a score of 44, $20 on a score of 45, and so forth. If the total is under, then the player would lose $10 for each point it misses by.
It’s high risk, but high entertainment, but players can choose to apply a cap to both the winning and loss margins. Over in New Jersey, Points Betting has proved to be a winning product.
The initial agreement in July 2019 gave Penn National a significant equity stake in PointsBet. The deal included:
“A strategic equity stake of 5.28% in PointsBet, with an additional $2.5 million access fee for Ohio, based on certain conditions, payable in cash or equity at Penn National’s option. In addition, PIV [Penn National] will receive 10,372,549 options, exercisable for two years, to acquire additional shares of PointsBet.”
Since then Aussie investors have reacted positively to PointsBet’s exposure to the US market. The share price has risen by around 500 percent since the deal was signed with Penn. No wonder Penn CEO Jay Snowden is “thrilled with the performance of our equity stake.”
Interestingly, that gain in stock price means Penn has surely made more in capital gains from its equity stake than from the revenue sharing portion of the deal!
Amusingly, over the same period Penn National shares have soared from $19.49 to $105.74. US investors are as excited by the sports betting market as their counterparts in Australia.
The continuing expansion of deals between sportsbetting operators and media companies also got a reference in the deal PR.
PointsBet CEO Sam Swannell noted:
“Further, Pennsylvania is home to Philadelphia, the fourth largest media market in the United States, inclusive of southern New Jersey and a regional pillar of the Comcast-NBC Universal asset portfolio. NBC Sports Philadelphia owns the in-game broadcast rights to the Phillies, 76ers, and Flyers covering over 290 live events per year across 4.1 million households.”
PointsBet has its own partnership with NBC Universal which owns NBS Sports Pennsylvania.
This deal raises the total number of states where PointsBet has access to 14. The company is determined to take a share of the US sports betting market and its investors like the strategy.
However, online poker doesn’t seem to be on the horizon for PointsBet. The fragmented nature of state regulated online poker makes the market too small for players like PointsBet to get involved, at least for now.