PointsBet to purchase Banach Expertise for $ 43 million

James Maloney of the Panthers looks on during the NRL rugby league sixth round match between the Sharks and the Panthers at PointsBet Stadium on April 18, 2019 in Sydney, Australia.

Jason McCawley | Getty Images

Banach technology has been dubbed the Robinhood of Sports Game, and PointsBet now owns it.

The sports betting company acquired Banach on Monday in a $ 43 million transaction. Banach is a business-to-business software company that creates sports betting platforms and algorithms including in-play betting.

Based in Australia and headquartered in the US in Denver, PointsBet is paying 55% cash for the company, issuing 1.75 million shares and paying $ 4 million to aid the conversion of the two companies.

In an interview with CNBC on Monday, PointsBet CEO Johnny Aitken said, “This transaction unlocks several benefits,” including improving PointsBets’ in-play offerings.

“The trend in this industry, particularly in the US, will focus on in-play betting,” said Aitken, estimating that “around 50 percent” of bets are currently placed in the game. “Within three years, we expect around 75 percent of bets to be put into play. So the future of US sports betting opportunity is in the game [bets]. “

PointsBet aims to gain market share in US gambling. Research firm Grand View Research estimates that the global online gambling market will reach US $ 127.3 billion by 2027. U.S. sports betting revenue is projected to reach $ 2.5 billion this year and $ 8 billion by 2025.

PointsBet relies on in-play bets that allow consumers to micro-bets while in play. Other companies like FanDuel are also investing in in-play technology as they partner with technology company Simplebet.

“As the American bettor becomes more familiar with sports betting, they become more comfortable with other options, become more curious and look for the best technology,” said Aitken. “And this is the chance for PointsBet. We own our technology.”

In January, PointsBet also agreed to a share agreement with the National Hockey League that would grant the league approximately $ 556,000 worth of shares. PointsBet also agreed to a $ 500 million equity deal with CNBC’s parent company NBCUniversal. In the five-year agreement, NBC has the right to increase its stake to 25%, a representative from PointsBet confirmed.

“For the NBC deal, the more successful NBC makes PointsBets, the more successful they will be with their participation,” said Aitken. “When you think of in-play betting and the future of sports coverage, it’s all about engagement in the game. In-play betting and in-play betting statistics built into the show can not only lead to that people watch more games but also extend the duration of their viewing. “

Banach is based in Ireland and its co-founders will now join PointsBet, including CEO Mark Hughes who will become PointsBet’s chief operating officer. The founders of Banach helped set up the quantitative analyst department at Flutter Entertainment (formerly Paddy Power), which owns FanDuel.

Aitken called the Banach founders “modern thinkers” and compared the company to the founders of the Robinhood app. “We think modern, and what worked in the past won’t work in the future,” he said. “The industry is changing and betting in America is going to grow. You have to be ahead of the trends.”

Flutter, which is listed on the London Stock Exchange, has a market capitalization of £ 27.7 billion (approximately $ 39 billion). Last week, CNBC reported that it is considering outsourcing FanDuel as a separately traded company to trade on a US exchange.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

You might also like

Comments are closed.