Rupert Murdoch’s News Corporation and digital wagering pioneer Matthew Tripp approached bookmaker PointsBet with a $220 million-plus offer for its Australian division, but were rebuffed by the company’s board.
Wagering industry sources, who spoke anonymously because talks were confidential, said the PointsBet’s board, which is led by former UBS banker Brett Paton, turned down a non-binding indicative offer from the News Corp Australia-led consortium almost two weeks ago. The offer, believed to be worth between $220 million to $300 million, was not put to shareholders.
PointsBet group chief executive Sam Swanell has bet aggressively on US expansion.Credit: Chris Hopkins
Murdoch and his son Lachlan control a multi-billion dollar global media empire that includes the Fox News Channel in the United States, a string of global and local newspapers including The Australian, and the Foxtel pay TV business in Australia. They have spearheaded a push into wagering globally, as the family looks to offset the decline in revenues of its legacy media business.
News Corp Australia, which has a small wagering presence through ownership of racing sites Punters.com.au and Racenet, formalised a partnership with Tripp earlier this year. Tripp previously grew Sportsbet into the country’s second-largest bookmaker and established BetEasy in 2014 before selling it to Canadian gambling giant The Stars Group. The News Corp consortium also includes Las Vegas-based online gambling investment fund Tekkorp.
News Corp is still expected to launch an online wagering business later this year, having already appointed the former BetEasy boss Andrew Menz as its chief executive. The proposed deal with PointsBet would have given the new business scale.
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While a rejection of the offer by PointsBet does not alter the timing of the new company’s launch or its bookmaking licence, it means that the company will not have a large customer base when it starts. BetMakers, which is backed by Tripp, is contracted to manage the technology platforms for the News betting venture.
PointsBet declined to comment when approached about the deal and Tripp was unavailable for comment.
Market sources estimate the Australian division of the wagering company, which is mainly focused on the US, is worth more than $200 million, but the market capitalisation of the listed group is $604 million. In August 2020, PointsBet announced a five-year media partnership with NBC Universal to become the official sports betting partner of NBC Sports in the US.
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PointsBet, which operates in 10 US states and Canada, has a strong balance sheet with $475 million in cash and equivalents on its books to fund its growth plans. Any additional cash from the deal would have allowed it to grow its US division.
For the three months ending March this year, PointsBet reported a 37 per cent increase in Australian turnover to $579.4 million. Betting turnover for its Australian arm jumped 140 per cent in 2021 financial year to $2 billion after the company employed significant marketing efforts, including an advertising campaign featuring American basketball great Shaquille O’Neal, to build market share and revenues.
PointsBet said last August it was targeting a 10 per cent share of the local online market by 2025, a doubling from current levels. The Australian arm is expected to be EBITDA positive for financial year 2022. PointsBet shares closed at $2.28 on Friday, down almost 6 per cent.
Tie-ups between broadcasters and bookmakers have become common in the US sports betting market, with broadcasters typically taking an equity stake in the betting outfit in exchange for sponsorship rights and brand promotion during live sports events. The Murdochs’ Fox Corp launched the bookmaker FOX Bet in 2019, with the Canadian gambling giant The Stars Group taking a 5 per cent stake in the company.