- PointsBet has secured sports betting and online casino gaming market access in Pennsylvania and Mississippi.
- Pennsylvania currently offers online sports betting and casino play while Mississippi does not.
- PointsBet is based in Australia and has a US office in Denver, Colorado.
Australia based PointsBet has been one of the most active companies in the US sports betting industry over the past year. They’ve got a US office in Denver, Colorado–quickly becoming a new hub for North American sports betting–and currently offers mobile access in Colorado, Iowa, Illinois, Indiana, Michigan and New Jersey. They’ve made any number of interesting acquisitions and partnerships over the past six months including the purchase of Irish B-to-B betting platform Banach Technology and a deal with the National Hockey League that saw the NHL taking a small equity stake in PointsBet. They’re also the official sports betting partner of NBC Sports.
PointsBet (ASX: PBH) has now secured market access in two additional states via a deal with Penn National Gaming (NASDAQ: PENN). Penn National has agreed to provide PointsBet with online sports betting and iGaming market access in Pennsylvania and Mississippi. Mobile betting is live in Pennsylvania while the Mississippi access is ‘subject to enabling legislation’. The new agreement is an extension of a previous online gaming services framework agreement dating July 31, 2019. It gives PointsBet market access in a total of 14 states with 7 of those in collaboration with Penn National.
As part of the deal, PointsBet has agreed ‘to release Penn National Gaming and Penn Interactive Venture, as well as its respective affiliates, from the disposal restrictions’ contained in the original agreement. Everything else is pretty typical for a deal of this sort with PointsBet paying PENN a portion of net gaming revenues in each state. The agreements for the two new states have a term of twenty years from the signing date and it might take that long for Mississippi to get around to setting up mobile wagering.
President and Chief Executive Officer Jay Snowden is pleased to expand their partnership with a solid company like PointsBet:
“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 Group Chief Executive Officer Sam Swanell is happy to lock up access in two more states, particularly the ‘too big to fail’ market of Pennsylvania:
“We are very excited about adding another two guaranteed online market access points to our portfolio in Pennsylvania and Mississippi. A mature, total addressable sports betting and iGaming market in Pennsylvania is estimated to be over US$1.75 billion per annum. 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.”
Pennsylvania is similar to Illinois in that they’re both such potentially lucrative markets that companies are willing to deal with burdensome regulation and absurd tax rates. This does put a ‘glass ceiling’ on potential market growth in the state and limits the development of ancillary economic benefits like investment and job creation. Not that either of the aforementioned states care–it’s all a big cash grab for them and they have little interest in creating an industry that spreads the benefits around.
At the time of publication, James Murphy has a long position in PBH and PENN.