PointsBet Raises $294 Million to Fund US Expansion

Posted on: July 29, 2021, 10:39h. 

Last updated on: July 29, 2021, 02:49h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

PointsBet (OTC:PBTHF) said today it’s raising $294.17 million in capital to fund expansion in the rapidly growing US market.

PointsBet capital raise
A PointsBet sportsbook is pictured above. The Aussie company is raising capital to fund US expansion. (Image: PointsBet Blog)

The Australian sportsbook operator is selling equity through a placement of new shares and a rights issue. Goldman Sachs and MST Financial are managing the transaction. As is par for the course with capital raises of this nature, the share sale is occurring at prices below market value.

For example, the private placement is priced at A$10, a more than 11 percent discount to PointsBet’s Wednesday closing price. The entitlement sleeve, which will raise $136 million, is priced at A$8. The private placement is geared toward institutional investors, while the entitlement transaction is for the operator’s smaller retail shareholders.

Share sales are typically dilutive to current investors. But PointsBet is looking to provide some protection to devoted long-term investors. The company went public in Sydney in 2019, with the shares rising more than fivefold since then due, in large part, to the operator’s ability to establish a US footprint.

PointsBet Bold US Ambitions

Separate from the share sale, PointsBet reported fiscal 2021 results today, and it’s easy to see why the operator is keen to expand in the US. For the financial year ending June 30, revenue jumped nearly 154 percent. But the operator’s US numbers were even more remarkable.

In the world’s fastest-growing sports betting market, PointsBet’s total handle climbed 458.4 percent to $1.79 billion, while gross and net win each increased 481 percent. PointsBet CEO Sam Swanell sees a big opportunity in the US, offering up a combined iGaming and sports wagering forecast for North America that’s well in excess of some of the more bullish estimates.

The North American sports betting and iGaming market could be a $54 billion revenue opportunity by 2033, and our strategy is to continue to invest to become a top five player in this market,” said Swanell.

Noting that the capital raise positions PointsBet to execute on that strategy, Swanell said the company is aiming for at least 10 percent market share in the North American regions in which it’s operational.

Aiming for Big Growth

Currently, the Australian company has licenses to run online sportsbooks in six states — Colorado, Illinois, Indiana, Iowa, Michigan, and New Jersey — and internet casinos in two states. New Jersey, the top iGaming market in the country, is one of those two. For the most recently completed fiscal year, New Jersey, Illinois, and Iowa were the company’s biggest US markets, as ranked by revenue.

By the end of 2022, PointsBet is aiming to be operational in at least 19 North American states and provinces. The company is planning to be a player in Canada, too, which recently approved single-game sports betting.