News could cut Betr stake as start-up gets funding for PointsBet...

News could cut Betr stake as start-up gets funding for PointsBet dealMark Di StefanoReporterFeb 24, 2023 – 7.00pmSaveShareNews Corp’s big bet on Australian online bookmaker Betr looks set to be watered down after the start-up secured financing to acquire the Australian arm of ASX-listed wagering group PointsBet.News Corp has poured tens of millions of dollars into Betr, the brainchild of former BetEasy chief executive Matthew Tripp. The company burnt cash to run aggressive promotions during its Spring Carnival launch.Pointsbet spent big to get former US basketball star Shaquille O’Neil to become the face of the company in Australia. Disclosures this month by the Rupert Murdoch-chaired News Corp show the media group’s investment – a 47 per cent stake – has weighed on its balance sheet, and executives assured investors that they did not immediately expect to provide additional capital.But Betr has engaged Barrenjoey and secured the funding needed to acquire the majority of PointsBet in a deal that is expected to be worth up to $250 million. PointsBet, which also operates in the US, has a market capitalisation of $430 million. Betr executives including Mr Tripp were in London this month to meet industry stakeholders about the transaction.“We haven’t hidden our growth ambitions, be that through our disruptive customer offers or through M&A,” said Betr chief executive Andrew Menz. “There’s great momentum in the business already and we’ll continue to look for step-change opportunities to win share in the Australian wagering market and to enhance our offering to customers.”RELATED QUOTESNWSNews Corp$25.9200.001 year1 dayFeb 22May 22Aug 22Feb 2321.00027.00033.000Updated: Feb 24, 2023 – 8.02pm. Data is 20 mins delayed.View NWS related articles AdvertisementA News Corp spokesman declined to comment.Betr launched during last year’s Spring Racing carnival, with major promotions that offered customers 100-1 odds on all runners. It caught the eye of the NSW regulator, which launched an investigation in the start-up’s first week, probing the company’s advertising in News Corp publications.Betr founder Matthew Tripp. Jesse MarlowNews Corp’s flutterDisclosures and filings from News Corp and BetMakers – the ASX-listed wagering technology company part-owned by Mr Tripp – suggest Betr has been churning through cash to acquire customers. News Corp accounts show losses attributed to “affiliates” of about $US33 million for the six months to December 31. When asked about the figure by brokers, News Corp chief financial officer Susan Panuccio said the line item was attributed to News Corp’s investment in Betr and that “we don’t expect that equity loss reflected in Q2 to be the run rate going forward”.Betr was founded as a three-way venture between News Corp’s Nationwide News, Mr Tripp’s TGW and Las Vegas-based Tekkorp. News Corp increased the company’s stake in the business late last year,injecting enough cash to hold almost a 47 per cent stake.AdvertisementNews Corp and Fox Corporation, also controlled by the Murdoch family, have made several aggressive plays to diversify the media companies’ core businesses, pushing into the growing online wagering sector.BetMakers, which provides the tech platform to Betr, disclosed in recent financial results that the aggressive and expensive launch campaign helped the company gain 300,000 customers during the Spring Carnival period.Betr’s move to acquire PointsBet’s Australian operations will help consolidate an increasingly crowded online gaming sector, where bookmakers are fighting to take market share from Sportsbet and Tabcorp.“You can see why Matt Tripp and his partners would be interested in PointsBet’s Australian operation as it is sure as hell far easier than growing a 240,000 customer base that is profitable from scratch,” wrote Aitken Mount’s Angus Aitken in a note to clients this month, noting speculation that Betr would make an offer for PointsBet. “(It) gives them something as a cashflow generator ... they should buy Tabcorp in time. To me, Tabcorp are the NAB of wagering, slow, lazy and a company of missed opportunities.”PointsBet closed down 1.5c, or 1 per cent, at $1.40 on Friday.