PointsBet Stock Surging – And It Seems Justified Say Analysts

In late August, share prices of the Australian-based sports betting company, Pointsbet Holdings Ltd jumped 87% in a single trading day. That stellar stock performance occurred after the online sportsbook signed a marketing deal with NBC Universal Media, making Pointsbet the Official Sports Betting Partner of NBC Sports.

The deal delivers the biggest sports audience of any media company in the US to Pointsbet. NBC Sports have an audience of 184 million across 120 million households; that’s nearly half the population of the US. NBC’s sports rights include coverage of the NFL, NHL, PGA Golf, Nascar, and Premier League football.

As part of Pointsbet’s partnership with NBC, the online sportsbook has committed to spending $393 million on marketing, to be progressively allocated at an increasing level over the five-year partnership.

While the US sports betting market is still in its early stages, some estimates project that at maturity, it will be a $30 billion addressable market.

Saville Capital Remains Invested in Pointsbet

Despite the big surge in Pointsbet’s share price, the Saville Capital Emerging Companies Fund remains invested.

The Saville Capital Emerging Companies Funds, based in Melbourne, Australia, has an excellent track record. The fund has generated impressive returns of 44.9% per annum ever since its launch in February 2017. The Saville fund maintains a very tight portfolio, with nearly 90% of its capital invested in just 17 stocks, including Pointsbet. Other Saville holdings include Class Ltd and Redbubble Ltd shares.

In Saville’s August monthly update, fund manager Jonathan Collett sees the Pointsbet/NBC deal as taking the sportsbook’s position in the US sports betting market from a niche player to a long-term key player. Keeping that in mind, Collett said the huge surge in Pointsbet shares in response to the deal “would appear to be justified.”

Collett also reported that the three biggest positive contributors for August were PointsBet, adding118%, Redbubble adding 49%, and Classadding 37%. Furthermore, there were no negative contributors to the Saville fund.

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US Sports Media Embraces Sports Betting

The NBC/Pointsbet deal isn’t the first; William Hill and CBS also signed a partnership. Back in February, the two companies formed a strategic partnership making William Hill the official sportsbook and gambling data provider across all of CBS Sports digital platforms. 

CBS Sports now uses William Hill’s experts, odds, and more than 140 sportsbooks nationwide to further engage both sports bettors and fans. Moreover, the partnership includes opportunities for William Hill to feature its data, odds, and markets on CBS Sports television broadcasts.

FOX Sports also partnered with the Stars Group to create FOX Bet; that partnership shows just how quickly a small player in the sports betting sector can become a competitor in the expanding US sports betting market.

Roundhill Investments Advises on Sports Betting Stocks

In a June blog post, Roundhill Investments looked at the investment landscape for sports betting, breaking it down into four categories; Sportsbooks, Technology, Casinos, and Lead Generation. 

Roundhill notes that as regulations evolve, sportsbooks such as Pointsbet, DraftKings, and Fanduel are increasingly are moving from brick-and-mortar sportsbooks to online. The business model of sportsbooks typically results in positive gross gaming revenues for the companies. However, sportsbooks are usually less profitable than casinos, which typically favor “the house”. 

Technology companies play a vital role in supporting sports betting companies. Tech companies are offering turn-key solutions to gambling companies that want to build and maintain an online sportsbook or casino. Many operate under long-term, B2B contracts. 

Traditional casinos, such as Caesars and MGM, are well-positioned to capitalize on the legalization of sports betting across the country. Well-established casino brands with existing customer bases can easily cultivate digital sports betting audience over time. Moreover, casino operators often earn the highest margins on casino games and slots rather than their sportsbooks. 

Lead generation companies focused on sports betting and iGaming identify and cultivate consumer interest in gambling products and services by selling this information to third parties. Lead generation is essential for advertising and promoting brands to consumers with an interest in sports betting and casino games.

Anyone with an interest in sports betting and iGaming stocks is highly advised to do their research, and to invest their money wisely.

 

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