- PointsBet has acquired B-to-B sports betting platform provider Banach Technology for a reported $43 million USD.
- Banach Technology’s specialty is in-play betting as well as player prop wagers.
- PointsBet is based in Australia with a US headquarters in Denver, Colorado.
PointsBet has made a very intriguing acquisition that they hope will help further establish their brand in the US market. They’ve purchased Dublin based B-to-B betting platform provider Banach Technology for a reported $43 million USD. The sale was facilitated through PointsBet’s Irish subsidiary Lockspell Limited and the transaction is expected to close in April 2021. PointsBet (ASX: PBH) will will pay 55% cash for the company, issue 1.75 million shares, and pay $4 million to assist in converting the two firms.
Banach Technology specializes in creating sports betting algorithms, particularly as they relate to in-play betting and player prop wagers. Banach was founded by Rob Reck, Mark Hughes, Alex Zevenbergen and Hadrien Lepretre, all of whom played a leading role in establishing the Quants department at Paddy Power.
PointsBet wants to beef up their in-play wagering and Banach has the technology to do that. Most sports bettors are aware that in-play betting is the fastest growing component of sportsbooks’ handle. In an interview with CNBC, PointsBet CEO Johnny Aitken estimated that in-play represents around 50% of the current handle and thinks that within three years it will be the predominant type of wager:
“The trend in this industry, especially in the U.S., will be all around in-play betting. Within three years, our expectation is roughly 75 percent of bets will be placed in-play. So the future of the U.S. sports betting opportunity is in-play [bets].”
Aitken compared the Banach platform to the Robinhood stock app that has been credited (or blamed, depending on your perspective) for a huge influx of retail investors. He says that owning the technology for in-play betting is a huge edge:
“As the American bettor gets more comfortable with sports betting, they get more comfortable with other options, get more curious, and seek the best technology. And that’s the opportunity for PointsBet. We own our technology.”
PointsBet has made a number of impressive tactical moves in the US market. In September of 2020, they made an equity deal with NBCUniversal valued at $500 million. In the five-year agreement, NBC has the right to increase its stake to 25%. In late February of this year they made a highly unprecedented deal with the National Hockey League–the NHL took a small equity stake in PointsBet as part of the arrangement.
“For the NBC deal, the more successful that NBC makes PointsBet, the more they become successful with their equity holding. When you think about in-play betting and the future of a sports broadcast, it’s all about that in-game engagement. In-play betting and in-play bet stats integrated into the broadcast can not only make people watch more games but also extend the duration of their viewing.”
Aitken rightfully observed the importance of being ahead of the curve in the fast changing sports betting industry:
We think in a modern way, and what has worked in the past isn’t going to work in the future. The industry is changing, and betting in America is going to grow. You need to be ahead of the trends.”
Stay tuned for a deep dive into Banach Technology and their wagering platform coming up within the next 24 hours.
At the time of publication, James Murphy has a long position in PBH.