A Look Inside The Huge NBC Sports And PointsBet Gambling Deal

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PointsBet has long contended it would be a major player in the US sports betting scene. That narrative got a big boost on Thursday.

The Australian-based online gambling company announced a multi-year partnership with NBCUniversal. PointsBet becomes the “official sports betting partner” of NBC, while NBC became an investor in the company and ear-marked hundreds of millions of dollars in advertising spend to help PointsBet grow.

Investors certainly liked the deal. Trading on the Australian Securities Exchange, PointsBet was up 86% to $14 (AUD) on Friday. The company also announced it was seeking to raise $300 million AUD (roughly $220 million US).

Here’s a closer look at what we know about the deal:

What PointsBet gets

Per a release, at the top level PointsBet receives “year-round, multi-platform media and marketing opportunities across [NBC’s] unmatched portfolio of events.”

It also gets a major media partner interested in its success. Perhaps most importantly it gets a lot of value in marketing spend, which is certainly needed to compete with the likes of FanDuel and DraftKings in the US market. According to PointsBet, there will be $393 million of committed marketing spend across NBC properties, which will increase in each year of the deal.

So far, PointsBet has online sports betting in just New Jersey, Indiana and Iowa, but that list will expand into new states soon and in the future.

Where you will see PointsBet

More specifically, here is more of what PointsBet gets from NBC:

  • NBCSN and the Golf Channel will feature PointsBet odds, content and branding. You’ll also see PointsBet on NBC streaming service Peacock, Telemundo Deportes and Telemundo.
  • PointsBet gets exposure on the eight NBC Sports regional networks, which are the broadcast home to a number of pro sports teams across the country.
  • PointsBet will be integrated with the NBC Sports Predictor app, a free-to-play offering.
  • Rotoworld, NBC’s digital platform for fantasy sports, will also have a PointsBet presence.

All of this should help customer acquisition for PointsBet in a significant way.

PointsBet Managing Director and Group CEO Sam Swanell, in a release:

“These assets will act as the cornerstone of our marketing strategy and combined with our in-house technology and products, as well as our talented and experienced team, will deliver outstanding client acquisition and retention efficiency as we scale rapidly over the next five years.”

What NBCUniversal, NBCSports get

NBC, for its part, gets into the sports betting industry, with what appears to be largely an exclusive relationship.

NBC takes a 4.9% interest in the company and has 66.88 million options that mature in five years.

According to Sportico, which first reported the deal, NBC will also receive payments for any depositing bettor that it sends to PointsBet. That and the equity NBC holds in PointsBet should make NBC a motivated partner, moreso than if the deal were entirely based on cash.

The latest media deal for sports betting

Sportsbooks have been finding dance partners in sports media at a fast clip in the US. Some of the deals that have been struck:

And that list doesn’t include FoxBet, a part of the Flutter/FanDuel portfolio that is intertwined with Fox Sports.

What’s this mean for PointsBet and US betting?

It seemingly provides a way for PointsBet to capture more marketshare in the US, or at least be able to compete more rigorously with DraftKings, FanDuel and BetMGM and stay ahead of other competitors. That trio of companies are committing massive amounts of money to marketing to grow or retain their business.

It will be launching in more states soon — most notably Colorado and Illinois. It does not have a path to enter Pennsylvania currently. It will also be offering online casino games in both New Jersey and Michigan in the future.

PointsBet has been as aggressive in procuring deals of late, including in Colorado with the Colorado Avalanche and Denver Nuggets, as well as the Indiana Pacers.

Without a deal like the one with NBC, the path to being a major player in the US sports betting space would be tough to see.

Even with the deal, PointsBet faces significant headwinds. DraftKings and FanDuel currently combine to hold about two-thirds of the online sports betting market in the US. And they hold a database of daily fantasy sports users waiting to be activated in any new state that legalizes wagering.

Still, if you want to be more than a company nibbling on the edges right now in the US, you have to make bold moves. And this is certainly that for PointsBet.

Solid FY20 financials

The Australian-listed firm also reported its FY20 results on Friday morning. The US business posted a net win of $5.1m for the 12-month period, up from a $0.5 million loss in FY19.

Handle climbed 317% to $235 million. The vast majority of that came in New Jersey, where PointsBet held a 6.25% online handle market share.

The company spent $11.2 million on US marketing.

AP Photo/Reed Hoffmann