Australian betting operator PointsBet recently announced a net loss of $178 million for the six months to December 2022. PointsBet almost doubled its revenue in the North American market.
However, with marketing costs increasing, the revenue boost didn’t improve the bookmaker’s bottom line. In fact, the betting operator’s loss widened by 25% compared to last year.
That led to talk about PointsBet selling its Australian betting business to betr, the bookie backed by News Corp and Australian wagering personality Matthew Tripp.
$250 Million Deal Is in Final Stages, Report Says
PointsBet CEO Sam Swanell said that the betting operator had created a lot of value, so it was only natural that there were interested parties. However, he didn’t give away any details about the potential deal with betr.
Swanell said that conversations of acquisitions and takeovers were common in the sports betting industry, but was reluctant to go into details about the terms of any prospective deal.
However, wagering industry sources say that the transaction between the two Australian bookmakers is in its final stages. According to The Australian Financial Review, betr has already secured the money needed to fund the deal.
The bookmaker asked Barrenjoey, a financial services company, to help with allocating the funds needed for the acquisition. The deal is reportedly in the $250 million region.
Mounting Marketing Costs to Soon Drop
PointsBet is currently “at an inflection point,” according to Sam Swanell. Revenue from the North American market is steadily growing, and the PointsBet chief executive also noted that the company’s US marketing was becoming more efficient and would further stabilize with time.
He predicted that the betting operator’s rising marketing costs would drop to $133 million after they reached stratospheric heights in 2022 ($175 million).
Swanell concluded that the growth of North American revenue and lower costs were definitely a “good story” for the bookmaker.
However, the market didn’t seem to be too impressed by the report and Swanells words. PointsBet’s share price (ASX:PBH) dropped 21% to $1.14 on Tuesday morning. It later recovered to $1.26.