PointsBet Sportsbook NJ May Be More Valuable As An Online Casino To Potential Buyers

Written By David Danzis on April 28, 2023 - Last Updated on May 31, 2023
pointsbet sportsbook sale future online casinos new jersey

PointsBet Sportsbook is reportedly looking to exit the US online sports betting market. The Australian-based online operator’s decision creates a lot of questions about the future of the nascent gambling segment in the United States — including the NJ sports betting industry.

Has the domestic online sports betting market reached its saturation point? Are the dominant players making competition all but impossible? Will there be more mergers and acquisitions, and when?

The New York Post is guestimating a $500 million pricetag for PointsBet based on Wynn Resort’s unsuccessful attempt last year to sell off its struggling sports betting app, WynnBET. Earlier this month, a PointsBet spokesperson confirmed the company hired an investment banking firm to identify potential buyers of its US sportsbook.

Sports betting makes headlines, online casino makes money

More interestingly, however, are the questions a possible PointsBet NJ sale raises about the much less talked about — but far more profitable — online casino segment. Sports betting is newer and sexier to talk about, but online casino outperforms sports gambling in every market where both are available.

Could a potential buyer see value in PointsBet as a way to enter existing online gaming markets in the US? Or, perhaps, as a way to increase market share through additional gambling offerings?

The counterargument to either of those scenarios is that online gaming is not expanding in the U.S. like sports betting. As evident in the Empire State and the push for NY online casinos, legal online casino gambling is proving to be a far more difficult sell.

Although online gambling in NJ began in 2013, only five other states have joined since. By comparison, sports betting is live in 33 states and DC, with 24 states (and DC) offering an online or mobile option. Legal sports betting outside Nevada has only been available since 2018.

Little room for growth, margin for error in US sports betting

PointsBet Sportsbook is available in 14 states. In four of those states — NJ, Pennsylvania, Michigan and West Virginia — PointsBet also operates an online casino.

The international bookmaker has failed to make tangible progress in the US. By most accounts, PointsBet is a third-tier sportsbook operator.

The top level would be FanDuel and DraftKings. Combined, they control roughly 80% of the US online sports betting market, according to published industry research. BetMGM and Caesars are on the next tier, with Barstool joining their ranks in a few states.

The lower tier is made up of operators who claim less than 1% of total market share. PointsBet is among them.

Online casino a better long-term bet for PointsBet buyer

But online casino and sports betting are also judged by different metrics. Sports betting is gauged by the handle, or the total amount bet. Online gambling, much like its land-based counterpart, is measured by revenue. That fact could be a reason why one of the segments (online casinos) is profitable, and the other (sports betting) is not quite there yet.

Take New Jersey, for example, a mature market where online casinos and sports betting are well-established. Through March, online casinos have generated more than $462 million in revenue, while both online and retail sportsbooks reported nearly $220 million in revenue.

Remember, those sports betting numbers are boosted by NFL playoffs in January and February, and college basketball in March.

Revenue generation aside, other market factors will play a role, with tax rates being chief among them. A high-tax state, like New York, may not be as attractive to a potential PointsBet buyer. But a moderate-tax state, such as Indiana, which is tossing around the idea of online casinos, would look much better.

PointsBet Sportsbook is currently available in both New York and Indiana. Should either adopt legal online gaming legislation in the near future, it is very likely that existing online sportsbook operators would have an advantage in the regulatory process of securing a way to offer iGaming. New York, for example, saw legislation introduced that carved out licenses for existing online sportsbooks.

Will PointsBet Sportsbook be the next domino to fall?

As it stands, Fanatics is working on closing a deal to acquire PointsBet’s US operations. This would allow the retail giant to take over PointsBet in various markets, including potentially rolling out a Fanatics Sportsbook in New Jersey as well as an online Fanatics Casino.

A handful of other online sportsbooks have already thrown in the towel in the US. MaximBet folded before most of the public even knew it existed. Fubo Sportsbook turned its attention back to streaming services.

As mentioned above, WynnBET was offered up for sale, but there were no buyers. Wynn Resorts reconsidered and still currently offers online sports gambling in a few states, although its digital success hardly resembles its Las Vegas casinos.

David Danzis Avatar
Written by
David Danzis

David Danzis is the lead writer for PlayNJ. He is a New Jersey native and honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. Today, he is PlayNJ’s Atlantic City “insider” and gaming industry expert on casinos, sports betting, and online gambling. David lives in Atlantic County, NJ with his wife and two children.

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