Drawing upon a deep understanding of cognitive culture in the United States, bookmaker PointsBet (ASX: PBH) is set to make a big push into in-play betting for US sports through the $43 million acquisition of Irish risk management company Banach Technology, a market leader in in-play trading.
Specialising in risk management platforms and quantitative driven trading models that can be applied to various sports, including the four major American sports and international soccer, in-play betting is widely recognised as the most popular betting option by professional punters. This therefore enables sportsbooks to manage their risk and leverage pre-post positions akin to traditional trading like that on the share market.
“We are delighted with the acquisition of Banach and that its well credentialled team have agreed to join PointsBet,” said PointsBet CEO, Sam Swanell.
“As legalisation to approve US sport betting accelerates across the US, it has become clear that the in-play opportunity will be very significant and those with the best depth and breadth of product will win.
“Technology is at the forefront of everything we do at PointsBet and we have undertaken an in-house approach to proprietary technology as the key priority.”
Founded by Rob Reck, Mark Hughes, Alex Zevenbergen and Hadrien Lepretre, the founding team were vital in the establishment of the Quants division of Paddy Power – the global sportsbetting leader that has since been acquired by Flutter Entertainment – which developed some of the most sophisticated sports betting algorithms that enabled wider product offerings.
Within the US sportsbetting market which is still in the early stages of adoption due to legislative changes that expanded sportsbetting across the country, (previously limited to just Nevada and New Jersey), PointsBet expects in-play wagering to account for 75% of total turnover within the next 3 years.
At present, Banach licenses its technology to other sportsbetting providers around the world and will continue to honour these contracts.
“We could not be more excited about the burgeoning US opportunity and the role that the Banach team will play in accelerating and strengthening PointsBet’s pre-game, in-play and free-to-play offering in the United States,” said Banach CEO, Mark Hughes.
The USD $43 million acquisition will be funded by 55% cash on a debt-free basis and the remaining in PBH shares that will be escrowed for lock-up periods of 12-36 months.
Through this acquisition, PointsBet will be able to significantly increase their in-game wagering products, extending standard head-to-head and line markets into player props, micro markets and same-game multis.
There will also be major improvements in their user experience interfaces that will simplify calls to action and their bet recommendation engines with more live stats and visualisations. Many of these new features will be promoted by NBA legend Shaquille O’Neal and popular golf identity Paige Spiranac who have recently signed on as brand ambassadors for Pointsbet.
“In Banach we have found a like-minded team of technologists and the acquisition is a preferable approach to developing our in-play capabilities organically, given it allows us to dramatically ramp up our speed to market while still allowing us to own market leading technology and continue to control our destiny,” added Swanell.
Pointsbet is the fastest growing sportsbetting operator in the United States having originally been founded in Melbourne, Australia.
*Owners of this website are PBH shareholders
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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