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PointsBet Confirms North American Sales Talks

PointsBet, an Australian gaming operator, has confirmed that it is currently in talks with multiple parties regarding the sale of its North American business.

The company also stated that it has terminated talks to sell its Australian business to the News Corp-backed gaming venture, Betr. However, PointsBet said that it remains in discussions with other interested third parties.

The company has been experiencing losses despite growth in revenue. For the three-month period ending 31 March, PointsBet recorded gross gaming revenue of AU$106.6m, a 39% increase from the previous year.

While the company's Australian arm saw a 3% decline in year-on-year revenue, the North American operations drove growth, with revenue rising 103% year-on-year to $49.8m.

The Canadian business also experienced rapid growth, increasing 21% on a quarter-on-quarter basis to $6.1m.

Despite this revenue growth, PointsBet is expecting to make an earnings before interest, tax, depreciation, or amortization (EBITDA) loss of between $77.0m and $82.0m for H2 FY3.

To drive the business towards profitability, the company recently completed a cost and efficiency review of its North American operational workforce, resulting in a 12% reduction in headcount, which is expected to result in annualized cost savings of approximately $6m.

During the quarter, PointsBet cut its cost of sales by 10.5% to $55.5m compared to the previous period. Although there were modest increases in other spending streams, costs ultimately fell across the board.

As of 31 March 2023, the company had $251.7m cash on hand.



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