PointsBet said fears over profitability in the US have led it to sell its stateside business to Fanatics for US$150m (A$222m).
PointsBet, whose group CEO and managing director Sam Swanell cited the cost of operating in the US for the sale, will retain its Australian and Canadian businesses.
It will also keep hold of the company’s sports wagering, racing and igaming platform.
PointsBet added that it expects the Australian and Canadian businesses will be “at or around EBITDA breakeven” on a standalone basis.
Swanell said: “Despite the strategic success building a valuable asset in the US, the costs of operating in a state-by-state environment, together with the requirement to build significant scale to compete against well capitalised operators, led us to explore a number of options.”
He added that Fanatics, which is a “natural acquirer of our US business,” presents the “most attractive risk-adjusted value outcome for shareholders compared to the risks and benefits of other options including the status quo.”
PointsBet shareholders will vote on the move at a meeting in late June.
A PointsBet statement said that the company’s US sale removes a "key uncertainty” over the company's future.
It added that “current corporate cash balance is insufficient to fund the US business through to profitability, and as such, should the proposed transaction not proceed, the company would need to raise additional capital in the near term.
“Moreover, there can be no guarantee that additional capital could be raised at all in the near term.”
