Australian challenger brand Betr appears to be leading the way in its bid to acquire PointsBet.
In a statement, PointsBet told shareholders that Betr’s offer may lead to a ‘superior proposal’ than that of the Japanese digital entertainment group MIXI.
The firm, headquartered in Melbourne and active in Australia and Canada, said the decision was made with the help of external advisors. It is now committed to carrying out further due diligence as to how an acquisition and integration into Betr’s operation will benefit its business and ASX shareholders.
The due diligence in its early stages will focus on the value of synergies and Betr’s scrip – the firm’s substitute for legal tender in parts of its offer. Betr, which merged with BlueBet last year, has tabled a bid worth AUD $360m (£174.9m), consisting of 57% cash and 43% scrip.
Despite appearing to favour Betr’s proposal, PointsBet’s board also wants to see progress made on the arrangement with MIXI, which has offered $353m and was previously approved by the operator.
The company’s board states that it “remains committed to, and unanimously recommends, that PointsBet shareholders vote in favour of the MIXI Scheme, in the absence of a Super Proposal”. The Board added that this is in the best interests of its shareholders.
It also advised shareholders that no action is required at this stage, and it will provide updates as the due diligence process progresses.
Uncertain regulatory period
In the background of the acquisition of PointsBet is an uncertain regulatory environment for Australia’s gaming industry.
Australia’s recently re-elected Prime Minister, Anthony Albanese, and his Labor government have faced significant pressure to implement the recommendations of the Murphy Report, including a ban on gambling advertising – reducing the visibility of the sector among consumers.
Independent Senator for the ACT, David Pocock, previously called for the influence of the gambling industry to go under the microscope, labelling it “astonishing” that no action has been taken on the report, which was submitted by the late MP Peta Murphy in 2023.
However, Michael Phelan, the former head of the Australian Criminal Intelligence Commission (ACIC), warned that the Australian market is edging towards a “tipping point” due to excessive regulation on the industry and that a “happy equilibrium” must be found to protect both players and operators.
Currently, Australian casino operator The Star Entertainment Group faces significant financial difficulty, fuelled in part by rising regulatory costs and a decline in player volumes. However, there is optimism for the operator as last month it secured strategic investment from Bally’s Corporation and Investment Holdings that has an aggregate principal value of AUD $300m
