The saga between the two sports betting operators had been interesting to see unfold as Fanatics looks to build its userbase in the U.S. DraftKings remains a market leader in the sports betting industry, although the platform definitely had something to gain from the possible PointsBet acquisition.
Fanatics Now Top Bidder For PointsBet’s U.S. Business With $225 Million Proposal
On May 14, 2023, Fanatics Inc. was set to acquire the U.S. business of PointsBet Sportsbook, a popular online sportsbook based in Australia, for $150 million. However, DraftKings Sportsbook disrupted this deal with a $195 million proposal of its own submitted roughly a month later.
While this threatened to complicate the deal, Fanatics just upped its ante to $225 million, a 50% increase from its original offer. According to Legal Sports Report, DraftKings then released a statement revealing the company is no longer seeking to purchase PointsBet Sportsbook assets.
The PointsBet board was in favor of the new proposition from Fanatics, which was not just superior in terms of financial details, but also allowed the company to complete a deal more quickly. Further details have been released around the deal, such as the timing of the payments.
It appears that the acquisition will be paid in two separate installments, with a $175 million transaction when the deal is initially finalized and the rest of the $50 million to be paid at a later date. A shareholder meeting to finalize the deal will be held later this week.
A joint statement from Fanatics Betting & Gaming and PointsBet: pic.twitter.com/4sNAWzUmp5
— PointsBet Communications (@PB_Comms) May 15, 2023
DraftKings Had Numerous Motives For A PointsBet Purchase
The short bidding competition between DraftKings and Fanatics is an interesting one to say the least. Fanatics Sportsbook is still in the process of fully launching across the U.S., having opened up a retail sportsbook at FedEx Field in January of this year and offering a beta version of its software in states like Maryland, Massachusetts, Ohio, and Tennessee.
DraftKings Sportsbook, meanwhile, is live in 22 different states and is in consistent competition with longtime rival FanDuel Sportsbook. While DraftKings definitely has a headstart in the betting industry, the mobile betting app had its reasons for pursuing PointsBet.
Legal Sports Report claims that one of the main drivers in the deal was PointsBet’s marketing deal with NBC, which broadcasts Sunday Night Football. Taking over this deal would be considerable for further advertising the sports betting platform, with the possibility of also taking over the mantle of official odds provider for SNF from BetMGM Sportsbook.
Plus, there were stock-related incentives in the potential DratKings deal, as the company is looking to raise its numbers closer to the March 2021 closing number of $71.98, an all-time high for the company. The PointsBet acquisition would’ve also been a major boost for DraftKings Sportsbook’s live betting offerings. PointsBet has been on the rise when it comes to live sports betting, with a 63% jump in in-game wagering between the fourth quarter of 2021 and the fourth quarter of 2022.