Taking a cue from their former Sixers legend spokesperson Allen Iverson, PointsBet Sportsbook is “crossing over” into Pennsylvania. PointsBet is currently available in New Jersey but will cross the bridge and arrive in PA soon, no E-Z Pass needed – just a “skin.”
PointsBet announced they secured sports betting and iGaming market access in Pennsylvania in a Wednesday press release.
PointsBet’s Path to Pennsylvania
PointsBet is coming to Pennsylvania through its partnership with Penn National Gaming. Wyomissing, PA-based Penn National operates two brick-and-mortar casino properties in Pennsylvania, with two more “mini-casinos” currently under construction. Each one has an online sportsbook partner.
- The Meadows Racetrack and Casino: DraftKings Sportsbook
- Hollywood Casino Grantville: Barstool online sportsbook
- Hollywood Casino Morgantown: BetMGM Sportsbook
That leaves Penn National’s forthcoming Category 4 casino in York, PA as the possible (probable) “skin” for PointsBet.
PointsBet and Penn National partnership
In late July of 2019, Penn National entered into a multi-year market access agreement with PointsBet and several other sports betting operators. Penn Interactive Ventures manages the sports betting and iGaming portfolio.
The press release also heralded the new partnership with Penn Interactive and Kambi. Kambi is a B2B sports betting provider that provides sportsbooks with the technical platform, odds and trading, and user interface.
Jon Kaplowitz, Penn National’s senior vice president of interactive gaming, said in a press release:
“We’re pleased to be providing the top names in sports betting, iGaming and poker access to our Company’s non-primary licenses to conduct these operations in exchange for a combination of upfront cash and equity, one-time market access fees and ongoing revenue sharing.”
Known in the industry as “skin agreements” these deals give online sportsbooks and iGaming operators access in certain jurisdictions (subject to each state’s laws) under casinos’ existing land-based license.
Wednesday’s announcement of additional market access stated that PointsBet and Penn National Gaming will extend the July 2019 agreement.
Key points of PointsBet and Penn National Gaming’s expanded partnership:
- PointsBet, through PNG, gets online sports betting and iGaming market access in Pennsylvania.
- PointsBet, through PNG, gets online sports betting and iGaming market access in Mississippi, subject to legalization. So far, sports betting in Mississippi continues to be restricted to retail sportsbooks. Multiple mobile betting bills have failed since 2018.
The fine print:
- The market access agreement for Pennsylvania and Mississippi is twenty years from the date PointsBet launches in each state.
- PointsBet is currently only available in New Jersey, Iowa, Indiana, Illinois, Colorado and Michigan.
- PointsBet will be responsible for all licensing and approval costs in connection with launching and operating the PointsBet services. This includes those associated with the licensed operator obtaining and maintaining the applicable operating licenses required for PointsBet to operate the services.
- PointsBet will pay PNG a portion of the net gaming revenues.
Pennsylvania market for iGaming and sports betting
PointsBet isn’t as brash as Penn National’s boldface sports betting brand, Barstool. The Barstool online sportsbook first launched in Pennsylvania and is now live in three states. PointsBet has market access in 14 states, seven through their pairing with Penn National.
Commenting on the transaction, Penn president and CEO Jay Snowden said:
“With the addition of Pennsylvania and Mississippi, we are pleased to expand our market access partnership with PointsBet to seven states. We have a great working relationship with the PointsBet team and are thrilled with the performance of our equity stake in the company since inking the original agreement. While we continue to value our equity stake in the company, the release from the disposal restrictions will provide flexibility as we assess our future capital management plans.”
PointsBet agreed to release Penn from “disposal restrictions” a few months early, referring to the original agreement to not sell shares and options Penn received in the deal for a period of two years. Eric Schippers, Penn VP of public affairs and government relations, told PlayPennsylvania they have no immediate plans to sell, however.
NBC Sports Philadelphia owns the in-game broadcast rights to the Phillies, 76ers, and Flyers covering over 290 live events per year. During Sixers and Flyers games, amid a plethora of ads for sportsbooks, PointsBet usually has the most.
PointsBet Group Chief Executive Officer Sam Swanell said:
“We are very excited about adding another two guaranteed online market access points to our portfolio in Pennsylvania and Mississippi. A mature, total addressable sports betting and iGaming market in Pennsylvania is estimated to be over $1.75 billion per annum. Further, Pennsylvania is home to Philadelphia, the fourth largest media market in the United States, inclusive of southern New Jersey and a regional pillar of the Comcast-NBC Universal asset portfolio.”
PointsBet loading up for better live betting
With an eye toward the explosive growth of live betting, PointsBet acquired trading tech firm Banach Technology for $43 million.
The mid-March deal with the trading tech firm will help PointsBet improve their offerings, especially live betting with:
- More uptime on live betting, meaning more bets and better customer experience.
- More in-play markets, including props and micro-markets like “Will this drive end in a touchdown?”
- Better margin on in-play because of more accurate pricing and reduced third-party costs.
PointsBet CEO Johnny Aitken is bullish on live betting. He estimated that roughly 50% of bets are currently placed in game.
In an interview with CNBC, Aitken said:
“The trend in this industry, especially in the U.S., will be all around in-play betting,” said Aitken. “Within three years, our expectation is roughly 75 percent of bets will be placed in-play. So the future of the U.S. sports betting opportunity is in-play (bets).”
Tardy to PA sports betting party
There are currently twelve sports betting apps in Pennsylvania. The first started arriving in the summer of 2019. In February 2021, PA sportsbooks took $509.5 million in bets. Handle in PA has surpassed $500 million in four of the last five months.
The year-over-year increase shows the rapid growth of the still young industry. In February, revenue for sportsbooks was up 246.9% YoY. Handle increased 54.5% YoY.
How will PointsBet compete?
It seems like it will rely on the strength of the product, brand recognition, and cracking bettor’s lineups who have multiple sportsbook accounts.
In a July interview, Aitken told Legal Sports Report:
“We’re not directly going after $5 to $10 sports bettor, we’re a premium brand. We’re a brand that understands how important it is to be competitive on price, how important it is to be competitive on promotions, and how important it is to speak to a US client as a US-based operator.
“We know coming from Australia, it’s very rare for clients to hold one betting account – they can hold two, to three, to four,” Aitken said. “We feel supremely confident in PointsBet being one of those four.”