Is the PointsBet (ASX:PBH) share price back on track after this announcement?

New York legalised online sports betting with a twist. Is this good news for the PointsBet Holdings Ltd (ASX: PBH) share price?

| More on:
questioning whether asx share price is a buy represented by man in red shirt scratching his head

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The PointsBet Holdings Ltd (ASX: PBH) share price was faced with heavy selling pressure in March, driven by concerns over the upcoming vote to legalise online sports betting in New York. 

A note from Deutsche Bank sparked the concerns, citing: 

Comments from NY politicians, as reported by affiliate media, appear far more pessimistic than those of several weeks ago around the prospects of NY legalising online sports betting in this session.

On Tuesday, it was announced that New York had officially approved legal online sports betting, but with a twist. 

New York legalises online sports betting 

New York announced that it had approved its budget for its fiscal year 2022. This includes allowing legal online wagering in the state for the first time. 

However, New York Governor Andrew Cuomo said he wanted to run the state's sports betting industry through the New York Lottery, which is run by the government. 

Cuomo's model aims to bring back as much revenue to the state as possible. This compares to many other states where revenues and profits sit with the bookmakers and casinos. 

Under Cuomo's proposal, the New York Lottery will select two companies through a competitive bidding process to operate online betting. The winning platform providers can then associate with at least four additional brand partners, or what the industry refers to as 'skins'. 

This has raised concerns by lawmakers for a potential lack of competition. States such as Pennsylvania and New Jersey allow for several casinos to legally operate to force higher competition for customers. 

What does this mean for the PointsBet share price? 

While the broader idea of legalising online sports betting in New York is good for PointsBet. Its adopted model could possibly block PointsBet from operating in the largest gambling state in the United States. 

The two largest sportsbook operators in the US, DraftKings and FanDuel are currently viewed to have an advantage in winning the licenses given its sheer size and revenues. 

New York aside, Goldman Sachs has taken a bullish view on the PointsBet share price. Its research note from 30 March comments: 

We see PBH as well-placed to carve out a niche share of the burgeoning US sports betting market, which we forecast to reach US$39 bn at maturity, implying a robust 40% CAGR out to 2033

The broker believes PointsBet's growth will be underpinned by its 20-year partnership with Penn National Gaming for market access into a greater number of states and its five-year exclusive media partnership with broadcaster, NBCUniversal. 

It rated PointsBet as a buy with a $17.50 target price. With PointsBet shares currently fetching $13.98, this represents an upside of more than 25%. 

Should you invest $1,000 in Audinate Group Limited right now?

Before you buy Audinate Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Audinate Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another tough day for investors this Tuesday.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why HMC Capital, Platinum, Sigma, and Skycity shares are dropping today

These shares are having a tough session on Tuesday. But why?

Read more »

A close-up photo of a ballot box with an Australian flag in front of it and a gentleman's hands placing his vote in the 2022 election inside the box
Share Market News

How these ASX 200 stocks are primed to gain from Labor's resounding Federal election win

With the Federal election in the rear-view, which ASX 200 stocks should I buy now?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Dimerix, Evolution Mining, Inghams, and NextDC shares are charging higher today

These shares are rising when many are falling today. But why?

Read more »

Smiling young woman eating chocolate outdoors.
Share Market News

The See's Candies playbook for ASX investors

Two ASX businesses that remind me of Buffett’s sweetest investment.

Read more »

Man smiling at a laptop because of a rising share price.
Opinions

My 2 favourite ASX sectors to invest in

Finding your groove can help your investing success.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
Opinions

3 things I learned from Warren Buffett being the CEO of Berkshire Hathaway

The Oracle from Omaha is in his last year as CEO.

Read more »

A male ASX 200 broker wearing a blue shirt and black tie holds one hand to his chin with the other arm crossed across his body as he watches stock prices on a digital screen while deep in thought
Share Market News

5 things to watch on the ASX 200 on Tuesday

Here's what to expect on the local market today.

Read more »