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PointsBet secures $65.5 million investment and in-game support from Susquehanna

In return for selling a 12.8% stake in its company to SIG Sports Investments Corp., PointsBet will gain cash and a new strategic partner as it seeks further expansion into the online sports betting markets. in Canada and the United States.

Australian sports betting firm PointsBet has received a major boost in the form of a US$65.5 million investment from SIG Sports Investments Corp., a division of US financial trading firm Susquehanna International Group.

In exchange for selling a 12.8% stake in its company to SIG Sports, PointsBet will gain valuable cash and a new strategic partner as it seeks to continue its aggressive expansion into the online sports betting markets in Canada and the United States.

However, according to PointsBet Group CEO Sam Swanell, the key element of the deal was not the capital injection, but rather the ability to access Susquehanna’s proprietary predictive trading technology, Nellie Analytics, who helped SIG become one of the most successful financial players in the world. market traders.

The Australian Financial Review reported that Swanell believes the Nellie technology will allow PointsBet to significantly improve its “in-play (in-play) betting”, resulting in “more markets, bigger bets, [and] more confidence in our prices.”

“[SIG] want exposure to the sports betting market [and] in current market conditions, it helps to have a little extra capital,” Swanell reportedly said. “But really, [what] what we want are… the skills, abilities and experience that can accelerate the journey we are on. »

“In concrete terms, the partnership will allow PointsBet to have more precise lines and more precise risk management,” Swanell added in a press release. “This will trickle down to our customers in the form of higher wagering limits, less price suspension, faster bet placements and improved value for bettors.”

Buy low

The deal comes as PointsBet, which currently has legal sports betting operations in 10 US states and Canada, is expanding into North America, which is also home to Pennsylvania-based SIG. PointsBet attempts to compete with the three dominant players in the sports betting industry, FanDuel, DraftKings and BetMGM, who collectively account for an 80% share of the total US online betting market.

SIG’s deal with PointsBet also comes just days after the bookmaker’s board reportedly rejected a non-binding offer for its Australian operations of over $150 million, which was put forward by a consortium led by Rupert Murdoch’s News Corp.

PointsBet now has a deep-pocketed partner – privately held SIG is “one of the largest proprietary financial trading companies in the world”, the statement says – and plans to back the bookmaker for the foreseeable future. Under the terms of the deal, SIG Sports will become the largest single shareholder in the bookmaker.

The decision to invest in the operator came after a long period of watching PointsBet, according to SIG co-founder and managing director, US billionaire Jeff Yass. SIG is also buying PointsBet after the value of the operator’s shares fell more than 60% this year to below AU$3 apiece.

“After several years of thoroughly evaluating the North American sports betting market to find the right partner, SIG Sports is pleased to have made what we consider a long-term investment in PointsBet,” Yass said in a statement. Monday. “We have followed their journey for some time and developed a very positive view of PointsBet’s overall business operations and management team’s ability. We believe PointsBet has great potential for future growth and success in the market. North American sports betting and GIS market has both the analytics and the capital to help realize this potential.”

A game in game

One of the main factors that prompted SIG to switch from trading stock options to sports betting appears to be the company’s belief in the potential financial gains of in-play betting.

Under the terms of the agreement, PointsBet will adopt SIG’s advanced Nellie technology for a nine-month exploratory period free of charge. This will serve as the basis for a new “technology roadmap” intended to provide PointsBet customers with improved in-game betting options and could ultimately lead to a longer-term agreement between the two companies.

“Since its inception, Nellie Analytics has sought to leverage SIG’s experience in quantitative modeling in financial markets and apply those lessons to create a world-class sports analytics business with a particular focus on gaming” , said David Pollard, head of strategic planning for SIG. “We are excited to explore the possibility of applying this hard-earned knowledge to a platform of like-minded partners.”

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