The PointsBet Holdings Ltd [ASX:PBH] share price is slightly up today after securing extended market access in Pennsylvania and Mississippi.
PointsBet Holdings Ltd [ASX:PBH] shares were up as much as 4% in early trade before settling slightly up at 0.3% at the time of writing (2:00pm).
The PBH share price is down 14% over the last month but still up 13% YTD.
Over the last 12 months, the PointsBet share price is up 780%.
PointsBet extends market access agreement
Today the company announced that its subsidiary PointsBet USA and Penn National Gaming were able to extend their Online Gaming Services Framework Agreement that provides PointsBet with online sports betting, and iGaming market access in US states of Pennsylvania and Mississippi.
The extended agreement is nonetheless subject to enabling legislation in Mississippi and licensure in both Mississippi and Pennsylvania.
The agreement means PointsBet now has a sports betting presence in 14 states in the US.
PointsBet will pay Penn National Gaming a portion of the Net Gaming Revenues derived from each additional state.
Additionally, the company will be solely responsible for all licensing and approval costs connected with operating its sports betting services.
The term of the market access agreement for each state is 20 years from the date the PointsBet-branded service is first offered to PointsBet players.
Penn National Gaming President and Chief Executive Officer Jay Snowden commented:
‘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.’
PBH share price outlook
As I covered last week, Pointsbet acquired Banach Technology for US$43 million on a cash and debt-free basis.
Banach provides proprietary risk management platforms and trading models that support pre-game and in-play betting across the four major American sports, as well as international soccer.
The recent acquisition and today’s extended market access agreement highlights PointsBet’s strategy to target the huge US betting market.
Investors will likely appreciate this proactiveness from the company to expand its foothold in such a large market like the US.
As it argued in its acquisition release, PointsBet wishes to become a ‘leader of in-play sports wagering in the United States, just as in-play wagering is expected to grow exponentially.’
PointsBet Chief Executive Office Sam Swanell noted in today’s release that Pennsylvania has an estimated total addressable sports betting and iGaming market estimated of US$1.75 billion per annum.
Whether PBH shares rise further will depend in large part on how well the company’s acquisitions and access agreements translate to capturing these large addressable markets.
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For Money Morning