The PointsBet Holdings Ltd (ASX: PBH) share price will be one to watch on Friday. This comes after the company announced it has secured two additional online market access points in its portfolio. At yesterday's market wrap, the PointsBet share price finished the day at $13.48.
Let's take a closer look at what the sports betting company announced.
Why the PointsBet share price is in focus
The PointsBet share price could be on the move today following the company's latest update.
According to PointsBet's release, its subsidiary PointsBet USA Inc. and Penn National Gaming Inc. (NASDAQ: PENN) have signed an extension of the Online Gaming Services Framework Agreement.
The extended agreement, which was formally executed on 31 July 2019, will see PointsBet secure online sports betting and iGaming market access in Pennsylvania and Mississippi. PointsBet management stated that the total addressable sports betting and iGaming market in Pennsylvania is estimated to be worth over US$1.75 billion per annum.
The transaction will also see PointsBet agree to the early release of disposal restrictions for Penn National Gaming and Penn Interactive Ventures. Previously, these restrictions in the Subscription Agreement were due to expire on 1 August 2021. It was noted though, all other equity restrictions within the framework will remain unchanged.
Details of the expanded partnership agreement
Under the new agreement, PointsBet will have market access in the additional states for a period of up to 20 years. This will commence when the company's first branded service is offered to PointsBet customers.
In addition, PointsBet will cover all licencing and approval costs associated with launching and operating its services. While Pennsylvania currently permits online sports betting and iGaming, Mississippi requires legislative approval.
Lastly, PointsBet will pay Penn National Gaming a percentage of its net gaming revenues from its Pennsylvania and Mississippi operations.
What did management say?
Penn National Gaming president and CEO 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.
PointsBet group CEO Sam Swanell added:
…Pennsylvania is home to Philadelphia, the fourth largest media market in the United States, inclusive of southern New Jersey and a regional pillar of the Comcast-NBC Universal asset portfolio. NBC Sports Philadelphia owns the in-game broadcast rights to the Phillies, 76ers, and Flyers covering over 290 live events per year across 4.1 million households.
About the PointsBet share price
The PointsBet share price has accelerated by over 780% in the past year, and is up around 14% year to date. The company's shares reached a 52-week high of $18.13 last month, before retreating to their current level.
Based on the current share price, PointsBet has a market capitalisation of roughly $2.47 billion.
