The PointsBet Holdings (ASX: PBH) share price was trading 25.1% lower on Friday following its response to the recent cancellations of global sporting events and tournaments in the wake of Coronavirus.
For context, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was trading at 4949.6, down 6.69%.
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Who is PointsBet Holdings?
PointsBet is a bookmaking/gambling business operating in Australia and USA. It provides its wagering services via a cloud-based platform.
This morning, the sports betting technology company reported the potential impact on its business following decisions by major sporting codes, including the NBA and soccer leagues like LaLiga, which have chosen to cancel or postpone their tournaments.
Just yesterday, PointsBet released an announcement saying it had entered into an agreement to be the exclusive USA betting partner for Spanish soccer league, LaLiga.
PointsBet has also entered a similar agreement with the world’s most prestigious basketball league, the USA’s NBA tournament.
Unfortunately, both of these sporting leagues have been cancelled or postponed in the past 48 hours as the world gets on top of the spread of COVID-19, aka Coronavirus.
In a step to reassure the market, PointsBet said had $147.9 million of cash as at 31 December 2019, along with no borrowings.
“It is important to note that marketing costs are predominately variable in nature, thus providing PointsBet flexibility to adjust and optimise its marketing spend given the developing circumstances.” – PointsBet
The company said it will keep investors updated on its cash flow and financial position through its quarterly ASX releases. PointsBet is also monitoring announcements from Australia’s racing bodies and other global sporting leagues which could be affected by the expected slowdown.
PointsBet isn’t the only gambling business to feel the pain from the recent outbreak. Crown Resorts Ltd (ASX: CWN), Tabcorp Holdings (ASX: TAH) and Jumbo Interactive Ltd (ASX: JIN) shares have all be caught up in the recent sell-off, falling between 27% and 49% since the beginning of the year.
PointsBet Holdings shares were last seen trading at $1.93, giving the company a market capitalisation just more than $300 million.
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