The battle for PointsBet – BlueBet steps up the chase for its sweet spot

In the feverish pandemic days of 2021, shares in PointsBet traded at more than $15 on the ASX.

The expectations of the Australian company, which was building a foothold in the American market, were sky high, as a largely locked-down society turned to online wagering en masse and the US betting revolution promised, initially, to be a field of gold,

Within two years, PointsBet had opted out of the American market altogether, accepting a US$225 million to offload its US business to Fanatics.

It had simply become too hard to compete in a $5 billion fight dominated by the duopoly of DraftKings and FanDuel and to preserve the business, PointsBet beat a hasty trail backwards to concentrate on its Australian and Canadian businesses in mid-2022.

PointsBet’s share price spent much of last winter at less than 50 cents. On Tuesday morning, it was at 83 cents.

There have been capital returns to investors figured into that drop along the way, but what the long-term trend tells us is that the boom on wagering companies, when it comes to investors, has long gone.

As a business, it is trending to short-term profitability. Its EBITDA for the first half of 2025 financial year was minus $3.2 million, but that number should have a plus in front of it by the time full-year results are reported in August/September. Its gross profit numbers on its Australian business are strong and growing.

That combination of an arguably undervalued share price and a soon-to-be positive balance sheet usually adds up to one thing in the corporate world.

PointsBet has been subject to takeover rumours for at least a couple of years. In 2023, the then emerging wagering company betr put forward an acquisition bid which didn’t land. Late last year, PointsBet doused speculation that an unnamed Asian investor was set to scoop it up.

This week, the battle for PointsBet erupted. It started with an announcement on Wednesday morning that the company’s board was recommending a takeover bid from Japanese-based MIXI.

Minutes later an announcement from BlueBet, the merged parent company of betr, lobbed. It too was tabling an offer for PointsBet, claiming its bid was superior.

We are not talking about a small amount of money here. MIXI’s deal is worth $353 million, BlueBet’s between $340 million to $360 million, with some value ads thrown in. PointsBet had been having discussions with both, but it was clear Mixi had got its further down the line.

Within 24 hours, PointsBet had rebuffed the BlueBet offer. It claimed the offer was “unfunded, subject to an explicit financing condition, and would require BlueBet to both raise $100m in debt and undertake a large upfront capital raising ($160m)”.

It also said it hadn’t yet seen the maths on the $40 million of synergies that BlueBet was building into its offer.

So that was that surely? Hardly.

BlueBet is chaired by Matt Tripp, arguably the biggest figure in Australian corporate bookmaking history, having built Sportsbet, sold it off, and then repeated the model several times over. Under chief executive Andrew Menz, within nine months the company has orchestrated a merger with betr and a takeover for mid-tier player TopSport.

Menz has said repeatedly over the past few months that betr has a target of gaining a better than 10 per cent market share, at which point, the economics of the whole operation become much more friendly. He calls it “the sweet spot”.

This purchase could achieve that target in a single bound.

So BlueBet is not taking no for an answer. BlueBet and PointsBet share a handful of significant investors, and Menz indicated the lion’s share of them see them as the right partner.

“We continue to be overwhelmed with support for our proposal by shareholders of both Bluebet and PointsBet who recognise the compelling industrial logic in the combination of these two growing operators,” Menz told an earnings call.

Tripp described the PointsBet response and rebuff as disappointing, but he is far from disheartened.

“We put our best foot forward with the mix-and-match type offer through listening to not only our own shareholders but shareholders that sit on both registers. These shareholders are not looking for an all-cash offer,” he said.

While the PointsBet board may unanimously support the takeover, BlueBet is counting on its target’s shareholders to feel differently, with an offer it says allows investors to either cash out, or stay the journey and see significant upside.

“We hope off the back of the enormous shareholder support that we’ve had in the last 24 hours, we will at some point in time gain a seat at the table to put our best foot forward and finalise that offer and create value for all shareholders,” Tripp said.

Further detail on BlueBet’s offer is expected to be made clear over the coming days. Unsurprisingly, the PointsBet share price leapt to $1.11 on the news of the competing offers and Bluebet’s determination to stay in the fight.

So what are they fighting for? Well, go start with, it is customers.

BlueBet’s diligence to date tells it there is only around 50 per cent cross-over between its customer database and that of PointsBet.

Some rough calculations of the most recent active numbers from both would indicate that a combined company would have at least 360,000 customers. The combined turnover for the Australian businesses projected across the entire financial year would be roughly $3.5 billion.

While BlueBet hasn’t officially indicated what it would want to do with PointsBet’s Canadian arm, you can read in Tripp’s commentary as to what the strategy may end up being.

“We are laser-focused on executing and capitalising on the opportunity here in Australia,” he said.

“We think we have the capacity to continue to outgrow the market. We think with our inorganic and organic strategy over the course of the next 12 to 18 months that the opportunity is here in Australia.

“So we will look at all avenues when it comes to Canada and we’ll finalise that but that’s for a very limited diligence period.”

This is all assuming an about-face from PointsBet, who have not indicated that they intend to be leveraged into abandoning the exclusivity deal it has entered into with MIXI.

So who is MIXI?

Best known for its Japanese social media platform, it is also a technology, media and gaming company with around 900 employees and a market cap of well over $2 billion. It dipped its toe into the Australian wagering market with the purchase of Betm a couple of years back, but the PointsBet deal would be a major step forward.

Whether it sees the value in leveraging PointsBet’s technology back into a currently highly regulated Japanese market which could open up in the coming years, is not apparent, but it obviously sees the value still to be had in the Australian market.

“Together with the Digital Entertainment segment offering services such as “Monster Strike”, and the Lifestyle segment offering services such as “Family Album Mitene”, we have positioned the Sports segment, comprising the betting and spectator sports businesses, as a focus area and have been striving to expand this sector,” a statement this week read.

“MIXI’s betting business in Japan has been growing steadily, with the social betting service “TIPSTAR” achieving full-year profitability. TIPSTAR offers online betting tickets for keirin (bicycle racing) and auto race (motorcycle racing) events, to be enjoyed with family and friends.

“We are also eager to expand the business overseas for further growth. Our main focus is Australia, where the betting market is sizable and some states even have a public holiday for horse racing.

“Given Australia’s established culture of enjoying betting with family and friends, we consider it a very attractive market for expanding our social betting service.”

While Tripp, Menz and the BlueBet team may have considerable heft in Australia, MIXI is a seriously big company with seriously large ambitions.

The Japanese publicly listed company also holds the dominant position, given they are the PointsBet board’s preferred suitor.

“We continue to be overwhelmed with support for our proposal by shareholders of both Bluebet and PointsBet who recognise the compelling industrial logic in the combination of these two growing operators” – BlueBet chief executive Andrew Menz

The MIXI takeover would require majority shareholder support to progress, with those shareholders needing to hold 75 per cent of voting rights. The process is expected to take several months, with a final decision to be made in May.

In the meantime, we can expect BlueBet to continue to mount its case that it should be the one at the altar when PointsBet eventually walks down the aisle.

The battle for PointsBet – BlueBet steps up the chase for its sweet spot

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