- Australian sportsbook PointsBet has announced a ‘multi-year strategic partnership’ with the National Hockey League (NHL).
- As part of the deal the league has designated PointsBet as an ‘Official Sports Betting Partner’.
- The twist is that the NHL has taken a small equity stake in PointsBet as a component of the partnership.
Here’s something that I never thought I’d see in North America–and particularly the United States. As a matter of fact, it’s something that unless I’m mistaken is completely unprecedented internationally. We’ll get to that in a moment but how about let’s start at the beginning?
Last week Australian sportsbook turned US sports betting provider PointsBet and the National Hockey League announced a ‘multi-year strategic partnership’. PointsBet gets the designation of being an ‘Official Sports Betting Partner of the NHL’ and gets promotion by the league in both the United States and Australia. PointsBet also gets to use the NHL branding and logos for promotional purposes. Pretty typical for a deal of this sort and PointsBet becomes the fifth ‘Official Sports Betting Partner’ of the NHL joining BetMGM, FanDuel, William Hill and Bally’s (which signed on just a few days after the PointsBet deal was announced). Actually, the NHL has six OBP’s (‘Official Betting Partners) if we count Czech Republic based bookmaker Tipsport.
Here’s where it gets interesting–as part of the deal the NHL has taken a small equity stake in PointsBet:
As part of the partnership, PointsBet has issued the NHL with 43,106 fully paid ordinary shares, representing value of US$500,000 on the 20-day trading volume weighted average price of the shares on the Australian Securities Exchange immediately prior to February 5.
Worth noting that the league didn’t mention this detail in the press release posted on NHL.com:
The press release from PointsBet, however, included the details of the equity stake:
Keith Wachtel, NHL Chief Business Officer and Senior Executive Vice President, had this to say about the partnership with PointsBet:
“As the sports betting landscape evolves at a rapid pace, we continue to develop unique, strategic alliances within the sports gaming industry. Our partnership with PointsBet brings to life our collaboration with our valued media partners and we look forward to enhancing our fan engagement opportunities in concert with both PointsBet and NBC. We are proud to welcome PointsBet to the NHL family.”
Johnny Aitken, CEO of PointsBet USA, is excited to be an official betting provider of the NHL:
“PointsBet is thrilled to become an official sports betting partner of the National Hockey League. The NHL’s on-ice product provides fans with captivating, nonstop action – it is a privilege to join forces with the NHL and its forward-thinking team, complementing that action with PointsBet’s sports betting product, the fastest sports betting app in market. We are excited to further elevate fan engagement via offering the most markets in the world for each NHL game, including our exclusive PointsBetting product, and enhance TV and digital integrations with mutual partners like NBC Sports.”
As you’ve probably guessed by now I think this arrangement is great. It’s a win/win/win. The NHL gets a revenue stream–and after the COVID-19 pandemic abruptly changed the business model of professional sports every other sport major and minor is looking for ancillary sources of revenue. PointsBet gets great exposure and the imprimatur of the NHL. They also know that the NHL will do everything possible to promote them since they’re ‘juiced in’. The third win is the entire North American sports betting ecosystem which benefits from even more mainstreaming.
The NHL/PointsBet relationship does make me wonder about the status of the other ‘official sports betting partners’. Logic suggests that since the NHL has (literally) a vested interest in PointsBet’s success that they’d receive preferential treatment over the ‘garden variety’ OBP’s that haven’t gifted the league with an equity stake. If, on the other hand, PointsBet doesn’t get some type of favorable status they’ll question why they gave the NHL a piece of the business in the first place. I don’t see how they can treat all of their ‘OBP’s’ equally when they’ve got a financial stake in only one.
There’s clearly no ‘exclusivity’ afforded to PointsBet due to their arrangement with the NHL. The ink on the NHL/PointsBet press release was barely dry when the league announced a more conventional ‘Official Sports Betting Partner’ deal with Bally’s Corporation. OK, it was nine days later and that’s plenty of time for the ‘ink to dry’ but you get the point. Bally’s had to know about the PointsBet/NHL equity stake arrangement but they didn’t consider it a deal breaker. PointsBet had to know that there was no exclusivity afforded even with the NHL becoming a minority partner.
From the NHL’s perspective, this is definitely a great way to make sure that they enjoy some financial upside from the growth of sports betting in the US (and in this case, Australia). What I’m now wondering–will this become the new ‘price of admission’ for ‘Official Sports Betting Partner’ status going forward? Not just in the NHL but in every professional sports league. Maybe I shouldn’t just limit it to professional leagues–you’ll recall that PointsBet has an unprecedented deal with the University of Colorado–since college sports can also use more revenue.
Maybe we’re on the cusp of an entirely new paradigm. Sports betting revenue could become the next ‘guaranteed payout’ for teams and leagues much as TV revenue is now. The league takes a minority stake in the sportsbooks that want the ‘official partner’ designation and dole out the proceeds proportionately to the individual teams. If you want to see roadblocks to widespread sportsbetting in the US fall by the wayside quickly all that needs to happen is for the NFL, NBA, etc. to have a significant financial stake.
Just so many questions and scenarios that could come out of this. I’m still in the process of wrapping my head around it so stay tuned for some deep dive analysis on this potentially game changing arrangement.