PointsBet is making it clear it plans to be a force in the US sports betting industry after announcing plans Monday to raise more than $80 million to fund expansion.
The company has a pipeline of states it can jump into through multiple market access deals. The biggest partner so far is Penn National, which is providing access to five states: Indiana, West Virginia, Louisiana, Missouri and Ohio.
Sports betting is not yet legal in the latter three states.
PointsBet also announced the first look into New Jersey’s October. Through the first 20 days of the month, PointsBet accounted for about $16.4 million in handle, $3.4 million of which specifically came from high-stakes bettors.
The company had 6.7% of the online market share during its fiscal first quarter from July 1 to Sept. 30.
PointsBet raising cash to expand
PointsBet will use the net proceeds, or about $81 million, to expand its sports betting business in the US.
Areas that require more cash for growth:
- Marketing and client acquisition.
- Technology and product development.
- US business development, which includes market access, licensing fees and retail sportsbook costs.
PointsBet is using its strength as a publicly traded company to issue new shares in the company. Shares will be sold to institutional and retail investors at varying prices, with all offerings scheduled to close by Nov. 22.
The company also raised more than $50 million in June via an IPO in Australia.
Along with the states mentioned in the Penn National deal, PointsBet has three more partners offering expansion opportunities:
- Catfish Bend in Iowa. PointsBet could get permission to launch its mobile app this month.
- Double Eagle Casino in Colorado. Legalized sports betting is pending a referendum next month.
- Hawthorne Racecourse in Illinois. It sits less than 10 miles outside of Chicago. The track intends to build a casino under the state’s recent gaming expansion.
More business details for PointsBet in the US
PointsBet offered a detailed look into its US sports betting business, so far, from July 1:
- The company took about $65 million in sports betting handle through Oct. 20. No doubt, the majority of that has come after the NFL season began.
- Its mobile operations in New Jersey accounted for the vast majority of handle, with about $50.5 million. Bettors in Iowa placed about another $900,000 at the Catfish Bend retail sportsbook that opened Aug.20.
- Most interestingly is the $13.6 million in additional handle bet by VIP clients that PointsBet decided to break out separately. The company began targeting what it terms high-stake clients in late August.
PointsBet’s trading risk management systems let the company take on high-staking clients with confidence the segment will be profitable in the medium-to-long term, it said.