Does Hard Rock’s Canadian Gaming License Application Signal PointsBet Acquisition?

According to an industry insider, Hard Rock Digital has applied to the Alcohol and Gaming Commission of Ontario (AGCO) for an iGaming license, sparking rumors it is targeting PointsBet Canada for acquisition.

Peeling the Onion

There are several layers to what has been speculated about Hard Rock Digital’s recent application for an iGaming license in Canada and what that might mean for PointsBet Canada’s future. It has been rumored that Hard Rock will need a database in Canada to gain a foothold in the iGaming landscape of the Great White North. And it just so happens that PointsBet Canada has such a database as well as a presence in the Canadian iGaming market.

However, in order to buy something, that thing must be for sale, and in this case, that thing is PointsBet Canada, which could be for sale if certain circumstances prevail. In peeling back the onion, we must first consider that Betr, owner of 20% of PointsBet Australia, which in turn owns PointsBet Canada, is in a bidding war with MIXI, a Japanese social networking service and entertainment goliath, to buy 100% of PointsBet Australia.

MIXI made an aggressive offer of AU$ 350 million (approximately $232 million US) in April, but Betr upped their ante to AU$ 360 million in cash and shares. But scraping together those funds will mean selling PointsBet Canada for a rumored $19 million to Hard Rock, which is why the Seminole Tribe’s gaming entity is applying for an iGaming license in Canada.

Thus, several dominoes must fall so that the grand plan can come together for both Betr and Hard Rock Digital. An industry source stated the following:

“Hard Rock is applying for a license in Ontario. The Hard Rock deal is contingent on Betr buying PointsBet Australia and divesting the Canadian business, but the only news I’ve seen says it involves selling the customer database, which only makes sense if a license application is in the works. It can take six months or more to get a license [in Ontario].”

Inside Track

Getting the PointsBet Australia stockholders to side with its offer over MIXI, Betr must make a compelling case, and it is hoping the extra $10 million Australian will do the trick.

However, it may not be quite that easy, as MIXI is much more liquid, while Betr has reportedly gotten a $120 million financing commitment from National Australia Bank, while raising $130 million through an underwritten equity raise. And finally, the reported $19 million from Hard Rock for the sale of PointsBet’s Canadian assets. The remaining $100 million will be paid in Betr Entertainment shares.

“Our offer represents a clearly superior offer for PointsBet shareholders to realize significant value,” said Betr’s Chairman Matthew Tripp.

Stay tuned for more updates on this and other news from the betting industry, including the top-rated sportsbooks.