Fanatics Sportsbook Tables New $225 Million Bid for PointsBet Assets

Fanatics is offering an improved bid of $225 million to PointsBet to acquire its North American assets as competition from other sportsbooks piles up.

Fanatics looked like it had a $150 million deal in place earlier this year, but interest from other companies such as DraftKings and FanDuel caused an agreement to be placed on hold. DraftKings offered $195 million to PointsBet earlier this month, leading to Fanatics’ second bid. 

Although PointsBet does not have the same market share as the “big four” (FanDuel, DraftKings, Caesars, and BetMGM), it has a wide customer base and licenses in 15 states.

DraftKings’ offer earlier this month was non-binding. PointsBet gave the company until 6:00 p.m. Melbourne time (where the PointsBet headquarters is) to return with a new binding bid.

DraftKings CEO Jason Robins previously said that while adding PointsBet’s assets to its portfolio would represent an opportunity for growth, it would not transform the company. 

When DraftKings ultimately did not return with a binding offer, Fanatics was granted the opportunity to reclaim pole position.

PointsBet shareholders will now vote on Fanatics’ new offer Thursday evening. The company is pleased with the framework of the offer.

“The Board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty,” said PointsBet Chairman Brett Paton in a statement.

Fanatics has been busy adding assets in different avenues, including trading card company Topps for $50 million. Its foray into the world of legal sports betting has already seen it erect a retail betting lounge inside FedEx Field, home of the Washington Commanders, in Landover, Maryland.

PointsBet is the seventh-largest sports betting operator and would present a great opportunity for growth in the online sports betting realm. That is especially relevant because Fanatics sportsbook has only been approved in four states and has a goal to be live in at least 12 jurisdictions by the time the NFL season kicks off. Adding PointsBet’s assets would make that goal much easier to conquer.

Sometimes, decisions made in the business world are not made for the direct benefit of that person’s or company’s business, but to prevent a competitor from growing too strong. Fanatics CEO Michale Rubin believes that DraftKings’ intervention in the acquisition process was never done with the intent to actually buy PointsBet’s assets, but rather to prolong Fanatics’ growth in the sports wagering space.

“It’s a move to delay our ability to enter the market,” Rubin said. “I guess they are more concerned about us than I would have thought.” 

Neither provided any comment in the days immediately ahead of PointsBet’s all-important Thursday meeting regarding the $225 million bid.

PointsBet made plans to withdraw from the North American market to focus on profitability and sustainability, which it believes it has a greater chance to do by focusing on its local Australian market. That goes hand-in-hand with other sports betting companies making sweeping budget cuts and adjustments to focuses despite the overall arms race for market share. 

Fanatics is tunnel-visioned on the start of the NFL season because the NFL is the most popular sports league to bet on in America. Last February’s Super Bowl alone resulted in an estimated $16 billion worth of bets from over 50 million Americans.

The gambling totals are also expected to increase during the 2023 season because of the further availability of legal betting across the country. States such as Kentucky and North Carolina made legislative changes to either legalize or expand their sports betting markets within the past few months.