Christmas has already ended, and we are six days old for the new year celebration, but the party is still on for the online sports and casino gambling businesses and its customers. First, the legalization of internet gaming and sports betting through casinos in Michigan during December 2019 and now the agreement between PointsBet Holdings Limited (ASX: PBH) and Lac Vieux Desert Public Enterprise and Finance Commission (LVD), people have a lot to celebrate for.
Here we begin with the day’s treat for you.
First Things First
The stock price of PBH increased by 7.677% during the day’s trade on 06 January 2020 reaching a price of $5.330.
The PBH stock has a market capitalization of $754.88 million and has delivered 97.74% returns during the last six months and 43.86% returns during the last three months.
PointsBet Michigan LLC, a wholly-owned subsidiary of PointsBet Holdings Limited (ASX: PBH), and Lac Vieux Desert Public Enterprise and Finance Commission (LVD), an arm and instrumentality of and organized under the laws of the Lac Vieux Desert Band of Lake Superior Chippewa Indians (the “Tribe”), a sovereign federally recognized Indian tribe, entered into an exclusive agreement on January 06 2020.
PointsBet Holdings Limited is a corporate bookmaker which aims to provide more markets on the major Australian and US sports than any other bookmaker through its operations in Australia and the United States. A scalable cloud-based wagering Platform developed by PBH extends innovative sports and racing wagering products including Fixed Odds Sports, Fixed Odds Racing and PointsBetting to its clients.
Both the parties have entered the agreement with a view to providing online and mobile sports wagering and gaming (casino) in the State of Michigan, and the agreement is subject to obtaining the necessary regulatory licenses.
PBH and LVD will now work together and the coordinated efforts are directed towards offering online and mobile sports wagering and online gaming (casino) services through LVD’s online licenses.
Sam Swanell, Group CEO of PointsBet, commented on the partnership saying:
Under the agreement, PointsBet shall pay access fee along with a portion of the Net Gaming Revenues for online sportsbook and online gaming market/operations to LVD. Moreover, PBH shall be responsible for the licensing and regulatory costs in connection with launching and operating the PointsBet services.
Additional highlights from the agreement are as follows:
- PBH and LVD look forward to launching digital sports wagering via PointsBet’s mobile app and website platforms pending final regulations and licensure;
- The launch of PointsBet and LVD branded online gaming (casino) operations in Michigan are pending final regulations and licensure is also provided for under the agreement;
- Automatic renewal of the agreement for an additional five-year term after completing the initial term of twenty years, unless either party provides written notice of its intention not to renew;
- Since there can be various grounds for termination associated with US gaming regulations, neither party may terminate for convenience during the initial or additional term.
- LVD has waived its sovereign immunity from suit in certain limited circumstances as is customary for transactions of this type.
Looking into the future situation of expiry or termination of the agreement, PointsBet has negotiated and retained the right to utilize client data which it would directly acquire through the online channels.
James Williams, Jr., Lac Vieux Desert Tribal Chairman, commented:
In addition to this, PBH and LVD are also actively engaged in continued exclusive negotiations regarding the operation of retail sportsbook operations at the Northern Waters Casino Resort, located on the Tribe’s reservation in Watersmeet, Michigan to complement the online offerings.
The Game of Legalising Games
PBH and LVD have formed the agreement following the signing of bipartisan House Bills 4311-12, 4916-18, 4307 and 4308 by Michigan Governor Gretchen Whitmer, which legalizes Internet gaming and sports betting through casinos in Michigan and the revenue generated from online gaming and sports betting shall be directed to assist the school aid fund and First Responder Presumed Coverage Fund (FRPCF).
Governor Gretchen Whitmer said:
Fresh revenues of around $19 million are estimated by the Michigan Department of Treasury to flow in as an effect of this legalization which shall further bolster the School Aid Fund by $4.8 million and invest an additional $4 million into the FRPCF.
Moreover, provisions for the tribal casinos are also bundled in the bill where they can take part in online gaming and sports betting at a level equal to the Detroit casinos, where the revenues generated shall provide for crucial tribal community activities.
Source: American Gaming Association
The map above presents various states in the United States where,
- sports betting is currently legalised;
- approval for sports betting has been given but it is yet to be effective;
- bills have been introduced or prefilled to legalize sports betting and are in pipeline.
March Madness or The NCAA Division I Men's Basketball Tournament, which has been played annually since 1939, is one of the biggest and most exciting sports events in all the sports. Following the legalization of the Internet gaming and sports betting, the people of Michigan shall be able to bet on their favourite basketball teams during March Madness.
The passing of the bills by the Governor opens the gates to immense opportunities for the gaming and casino companies along with putting in some money for community welfare. We are keeping a watch on how other casinos and online gambling companies take advantage of the current opportunity.