Early Success in New Jersey Prompts PointsBet to Raise $353 Million to Expand to Other US States

The share prices for PointsBet Holdings Ltd aren’t moving just yet, and the company remains in a trading halt.

Why Share Prices for PointsBet Are Halted

On September 2, PointsBet requested a trading halt while the company sets about raising a major amount of capital.

The sports betting company wants to raise around $353 million through an institutional placement and a fully underwritten entitlement. The plan is, to raise the funds to bolster the company balance sheet to support its long term strategy.

This level of capital demonstrates just how far the online sportsbook has come in just a short time. A little more than a year ago, the sports betting company presented the ASX boards with a market capitalization of ~$166 million. Now, it is in the process of raising more than double that amount.

Managing Director and CEO of PointsBet, Sam Swanell, said he’s very happy with the support for the fundraising, and sees the success of the placement as an endorsement of the company’s long-range strategy.

“The capital raising bolsters the company’s balance sheet in order to execute on our long term strategy,” he said.

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How the Capital Raising is Tracking

Recently, the company announced the success of its institutional placement. PointsBet raised a total of $200 million priced at $11.00 per share; that number corresponds to a 19.6% discount to its last closing price.

Company management noted that the placement was supported by international institutional shareholders.

Next up for PointsBet is an entitlement offer. The company recently initiated the institutional component of this offer. Existing shareholders have the opportunity to get one share for every 6.5 shares they currently own, for just $6.50 per new share.

Retail investors will also be able to get in on the action with the launch of the retail entitlement offer. This will have the same terms as the institutional component.

Furthermore, eligible shareholders will get one new option, at no further cost, for every two shares issued under the entitlement offer. These new options will be offered at $13.00 and expire on September 30, 2022.

How the Company Will Use the Funds

The company plans to use the funds to cover its marketing costs and business development in targeted US states. Business development includes state licensing fees and market access, as well as building retail sportsbooks. The company will also use the funds to further develop its technology and platform.

As sports betting is legalized in more and more states, PointsBet plans to enter those markets as quickly as possible.

PointsBet’s US Footprint

Since the Australian sportsbook made its US debut in 2019, it’s quickly expanding its US footprint into New Jersey, Illinois, Iowa, Indiana, Michigan, and Colorado. PointsBet is among the fastest growing online sportsbooks in the US, and as more states come on board with sports betting, PointsBet will be there.

The company offers the most markets on the four major sports leagues, the NFL, NBA, MLB, NHL and PGA, including as many as 1,000 markets for every NBA game.

As part of its US expansion, PointsBet entered into a multi-year partnership with NBCUniversal, making the online sportsbook the official sports betting partner of NBC Sports.

NBC Sports will provide the sportsbook with multi-platform media and marketing opportunities all year-round, across all of the sporting events the network covers. The deal gives the Australian-based sportsbook unprecedented access to NBC’s 185 million viewers, as well as NBC Sports’ 60 million monthly active users.

To further its reach into the US gaming market, PointsBet also struck a deal with Evolution Gaming, a top provider of live, 3rd-party, online casino games. Evolution Gaming will work with the online sportsbook to develop an online casino. PointsBet plans to launch an online casino in Michigan later this year, as well as in New Jersey.

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