ointsBet has acquired Banach Technology in a $43 million transaction on Monday. Banach is a business-to-business software company that creates sports betting platforms and algorithms, including in-play wagers.
PointsBet, which is based in Australia with a U.S. headquarters in Denver, will pay 55% cash for the company, issue 1.75 million shares, and pay $4 million to assist in converting the two firms.
PointsBet CEO Johnny Aitken told CNBC that “multiple benefits will be unlocked by this transaction,” including PointsBets’ enhancing in-play offerings. “The trend in this industry, especially in the U.S., will be all around in-play betting,” said Aitken, estimating “roughly 50 percent” of bets are currently placed in-game. “Within three years, our expectation is roughly 75 percent of bets will be placed in-play. So the future of the U.S. sports betting opportunity is in-play [bets].”
In-play wagering allows consumers to make micro-bets during games. Other firms like FanDuel are also investing in-play technologies, as it has partnerships with tech company Simplebet.
Research firm Grand View Research estimates the global online gambling market size will reach $127.3 billion by 2027. And U.S. sports betting revenue has been forecast to reach $2.5 billion this year and $8 billion by 2025.
Banach is based in Ireland, and its co-founders will now join PointsBet, including CEO Mark Hughes, who will transition to PointsBet chief operating officer. Banach founders helped establish the quantitative analyst division of Flutter Entertainment (formerly Paddy Power), which owns FanDuel.
Aitken called Banach founders “modern thinkers” and compared the company to the Robinhood app’s founders. “We think in a modern way, and what has worked in the past isn’t going to work in the future,” he said. “The industry is changing, and betting in America is going to grow. You need to be ahead of the trends.”
In January, PointsBet also agreed to an equity deal with the National Hockey League that granted the league roughly $556,000 worth of stock. PointsBet also agreed to an equity deal with CNBC parent company NBCUniversal valued at $500 million. In the five-year agreement, NBC has the right to increase its stake to 25%, a PointsBet representative confirmed.