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Australian Stock Exchange Halts PointsBet Trading Pending Potential US Operations Sale

Written By Derek Helling on June 27, 2023
stamp of word suspended in red ink next to pointsbet logo

If you’re active on the stock exchange in Sydney, Australia, your last-minute move to buy up some PointsBet stock is too last-minute. On Tuesday, the exchange suspended trading of PointsBet shares indefinitely.

The prudent move is in anticipation of a stockholder vote regarding the potential sale of PointsBet’s operations in the United States on Friday. There is intrigue around whether that vote will indeed take place and if so, how it will go.

Australian exchange restricts PointsBet trading

PointsBet has not violated any Australian securities laws or anything of that sort. The company is in good standing with the exchange. The suspension of trading is a move to protect both investors and PointsBet.

Players who enjoy PointsBet’s online casino in Michigan, New Jersey, Pennsylvania, and West Virginia should note this suspension only applies to trading PointsBet stock in Australia. Those casino apps in those four states continue to operate as normal for the time being.

PointsBet agreed in principle to sell its US operations to Fanatics Betting & Gaming in May. At that time, it scheduled a necessary vote of its shareholders on that sale for June 30. For that reason, halting trading is an “err on the side of caution” decision.

Suspending trading limits opportunities for insider trading by those who might have some insight into how Friday’s vote could proceed. It also prevents a person or persons with a vested interest in that vote going one way or the other from buying up huge swaths of shares to essentially decide the vote at the 11th hour.

Those precautions are even more prudent because of a wild card in this particular situation. That wild card is another potential suitor for PointsBet’s US operations. It’s the US online gambling industry’s version of a love triangle.

DraftKings brings the drama this week

Last week, DraftKings announced that it had submitted a bid for PointsBet’s US operations. Obviously, PointsBet can’t sell those operations to both DraftKings and Fanatics. It has to pick a partner in this instance.

It’s important to note that PointsBet had already agreed to terms with Fanatics pending shareholder acceptance. Additionally, DraftKings’ offer is non-binding. That means DraftKings did not fully commit to following through on the offer should PointsBet agree.

In a storyline worthy of any soap opera, DraftKings and Fanatics had made overtures on a potential merger in the past. While that didn’t work out, it seems their time courting each other has now turned into somewhat of a rivalry for PointsBet’s affection.

PointsBet had given DraftKings a deadline of Tuesday to transform its offer into the binding sort if it was serious. That demand was so that PointsBet could present an assessment of the options to shareholders when they vote.

It’s unclear how PointsBet will respond should DraftKings not meet Tuesday’s deadline. A delay of the vote is possible. However, that would represent a gamble, the bird in hand is worth two in the bush kind of risk.

The fate of PointsBet’s US operations could be decided later this week. Regardless of what that fate is, it’s likely that someone will be disappointed.

Photo by PlayUSA
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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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