Susquehanna International Group (SIG) is taking a 13% equity stake in PointsBet Holdings Ltd. in a deal valued at $65 million dollars, making SIG the company’s largest shareholder, PointsBet announced Monday.
A major US player in options trading, SIG plans to leverage its expertise in that industry to help PointsBet expand its in-game betting markets in the future.
Points Bet CEO Johnny Aitken recently penned an op-ed piece for the sports business publication Sportico announcing the company’s plan to grow micro markets for live wagering in golf.
“We both agree that where it’s going is to in-game betting,” Susquehanna co-founder Jeff Yass told Dow Jones Newswires. “There is really very little in-game betting in the United States because no one really has the expertise. We think we have the advantage there. That analytics, that mathematics, that technology is almost exactly the same for sports betting as it is for options trading.”
News of Susquehanna’s investment in PointsBet comes on the heels of Las Vegas Sands Corp.‘s investment in the company that was formed in the merger of Huddle and Deck Prism, a service that provides live odds to sportsbooks.
Live Betting Grows in Popularity
Live (or in-game) bets are made after a game or event has started. Technology allows sportsbooks to offer new odds on a real-time basis depending on how the competition is playing out.
Instead of traditional “pre-flop” betting before a golf tournament begins, for example, live bets can be made on things like a player’s performance against a competitor on a particular hole or during an individual round.
As Aitken wrote in Sportico, “Over the coming years, we see this extending to longest drive, nearest the pin, and even whether the individual will sink a putt. Creating these lightning betting opportunities can make golf a top-tier betting sport, in line with how soccer and tennis have been revolutionized by live, in-play micro markets.”
Two Industries Converge
Yass, 63, has amassed a $17 billion fortune after more than four decades in options trading. Yass, also an avid poker player and horse racing bettor, has a long history of betting and winning regardless of the arena.
“The options market which we have been in for 41 years and the sports betting market are very, very similar analytically,” he said. “You’ve got to figure out the price, use probability and statistics, you’ve got to use game theory and analytics, you’ve got to put up the best price – know what you are doing and be confident in your price. So, the skills it takes to be a good options trader are the same skills it takes to be a good bookmaker.”
While there’s doubt around the sports betting industry regarding the price sensitivity of recreational gamblers, Yass is betting that offering more favorable odds is in fact key to customer acquisition and retention.
SIG co-founder Jeff Yass told me this investment is a bet that customers will eventually find the apps with the best pricing, and SIG is good at pricing.
"That’s our bet, that the best price is going to win. If it’s a marketing contest… Susquehanna doesn’t add much value." https://t.co/AOOH4nOI6t
— Eben Novy-Williams (@novy_williams) June 20, 2022