Why PointsBet’s (ASX:PBH) US subsidiary extended deal with Penn National

Source: CHIEW, Shutterstock

Summary

  • PointsBet Holdings announced extension of its agreement with Penn National Gaming to provide it with online sports betting and iGaming market access in Pennsylvania and Mississippi.
  • The extended deal would be subject to enabling legislation in Mississippi and licensure in each of those States. Pennsylvania currently permits online sports betting and iGaming.
  • The agreement expanded PointsBet’s United States sports betting footprint to 14 states.

PointsBet Holdings Ltd (ASX:PBH) on Friday announced extension of its agreement with  Penn National Gaming to provide it with online sports betting and iGaming market access in Pennsylvania and Mississippi.

Source: © Cammeyraydre | Megapixl.com

The extended deal would be subject to enabling legislation in Mississippi and licensure in each of those States. Pennsylvania currently permits online sports betting and iGaming.

As part of the Transaction, PointsBet has agreed to release PNG and Penn Interactive Ventures and their respective affiliates from the disposal restrictions contained in the subscription agreement entered in July 2019. Such restrictions were due to expire on 1 August 2021. All other equity restrictions in the subscription agreement remain unchanged.

Key features of the extended agreement  

  • The agreement expanded PointsBet’s United States sports betting footprint to 14 states.
  • PointsBet would be responsible for all licensing and approval costs in connection with launching and operating the PointsBet services.
  • PointsBet would pay PNG a portion of the Net Gaming Revenues derived from each Additional State.

Source: © Poorisitchunpiam1995 | Megapixl.com

What company says

Commenting on the development, PNG President and Chief Executive Officer Jay Snowden said that with the addition of Pennsylvania and Mississippi, the company was pleased to expand its market access partnership with PointsBet to seven States. PNG has a great working relationship with the PointsBet team and was thrilled with the performance of the equity stake in the company since inking the original agreement, Snowden also said.

While PNG would continue to value the equity stake in the company, the release from the disposal restrictions would provide flexibility as it assessed its future capital management plans, he noted.

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Stock performance

Shares of PointsBet closed at A$13.48, down 0.30 points or 2.18 per cent on Thursday, 25 March 2021, against the previous closing on Wednesday, 24 March 2021.

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