DraftKings Bids $195 Million To Acquire PointsBet, Trumping Fanatics’ $150 Million Proposal
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DraftKings Online Sportsbook has officially put in a $195 million bid to purchase the U.S. operations of PointsBet Sportsbook. This comes just a month after it was announced that Fanatics Sportsbook had put in a bid of its own to acquire the PointsBet U.S. business.
A number of factors will help determine which betting operator will be successful, such as a potential clause preventing the DraftKings bid and the amount of each proposal. This news could make major waves throughout the sports betting industry, which has become increasingly competitive in recent years.
DraftKings Submits $195 Million Bid On PointsBet Sportsbook
In a recently released press release, DraftKings announced it has submitted a bid to acquire PointsBet Sportsbook’s U.S. assets. According to the release, the cash offer is for $195 million, making it the current top bid on the sports betting operator.
DraftKings co-founder and chief executive office Jason Robins said in the press release, “While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s U.S. business.”
A market leader in online sports betting, this acquisition could be major for DraftKings. Although the online betting app is consistently one of the top choices for sports bettors, it has struggled to take down its biggest rival FanDuel Sportsbook. Considering FanDuel had a 50% market share in the fourth quarter of 2022, the move by DraftKings could be essential in gaining ground in the battle between major sports betting operators.
A joint statement from Fanatics Betting & Gaming and PointsBet: pic.twitter.com/4sNAWzUmp5
— PointsBet Communications (@PB_Comms) May 15, 2023
Fanatics Submitted $150 Million Bid In May
The latest proposal by DraftKings is superior to one made by Fanatics in May 2023. That particular bid was valued at $150 million, also in cash. The move, which would allow Fanatics to offer its mobile sports betting app in 15 states, was a big step in the launch of Fanatics Sportsbook. In the same month as the bid was submitted, Fanatics Betting and Gaming offered a beta version of its online sportsbook in the Ohio sports betting and Tennessee sports betting markets.
DraftKings submitting a bid with 30% more cash could be a sign that the online betting site is looking to take away momentum from the growing Fanatics Sportsbook. This is interesting as PlayMA recently projected that Fanatics will have a 5% market share in the Massachusetts sports betting market, with the platform highly unlikely to challenge DraftKings or FanDuel.
Would be surprised if Fanatics didn’t try to negotiate a “no-shop clause” in connection with their bid. Not getting one might cost them this acquisition.
A no-shop clause is a condition that prevents the seller from getting an offer from another buyer until a decision is made on… https://t.co/qqdTOXi2A2
— John Nucci (@JNucci23) June 16, 2023
No Shop Clause Could Determine Future of DraftKings Bid
While the DraftKings bid is certainly superior in terms of assets, there could be a snag in the operator’s plans. Attorney Jon Nucci expressed on Twitter that Fanatics may have inserted a no shop clause into their deal, meaning that PointsBet wouldn’t be able to receive any other offers during the negotiation process.
This means that DraftKings wouldn’t be able to go through with its competing offer until a decision by PointsBet is made on the Fanatics bid. Nucci was responding to writer Robert Linnehan, who says that a vote by PointsBet shareholders is planned for June 30th, 2023.
