Fanatics Betting and Gaming has agreed to acquire the U.S. operations of PointsBet, marking the sports apparel giant’s first major leap into sports betting. The deal was announced on Sunday night and is worth about $150 million in cash.
The latest deal will reportedly give Fanatics access to sports gambling in the 15 US states where PointsBet is currently licensed to operate. “Fanatics expects to have access to the majority of states where PointsBet operates by the start of the NFL season,” people familiar with the matter told CNBC. The deal brings Fanatics further into the world of online sports betting as it gears up for a potential IPO.
“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business,” the companies said in a joint statement. “While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
A joint statement from Fanatics Betting & Gaming and PointsBet: pic.twitter.com/4sNAWzUmp5
— PointsBet Communications (@PB_Comms) May 15, 2023
PointsBet, whose shares are traded in Australia, is expected to hold a shareholder vote on the deal in late June. Only PointsBet’s US assets are part of the deal. Fanatics will plan to fund some of the remaining cash flow burn from PointsBet, which has had to spend heavily on marketing to compete with larger rivals DraftKings and FanDuel.
PointsBet forecast a loss of between $77 million and $82 million for the second half of the year. Citing “very challenging” market conditions, the company said Sunday that it would need to raise additional capital at a “significant discount to recent market prices” in the near term if the deal with Fanatics somehow fell apart, as reported by CNBC.
In 2020, PointsBet inked a five-year deal with NBC Sports worth nearly $500 million. That gave NBCUniversal a 4.9% equity stake in PointsBet and made the business the exclusive sports betting partner of NBC Sports. In January, the two parties said they would be extending the deal by two years. The new deal reduced PointsBet’s annual advertising spend obligations with NBCU assets.
PointsBet has been trying to expand its US presence since launching in New Jersey in 2019. It’s since launched in states including New York, Colorado, and Indiana.
Meanwhile, sports apparel and collectibles giant Fanatics has been in talks with a number of different sports betting companies over the past year as it plots its path forward in mobile gambling. The company, which launched its sports betting operations this year, has forecast 2023 revenue of $8 billion.
Matt King, CEO of Fanatics Betting
“This is a 10-year journey,” Matt King, the CEO of Fanatics Betting, said at the SBC Conference earlier this month, as reported by the above-mentioned media. “We’re going to move very methodically through that 10-year journey. And by doing that and taking that approach, it allows you to be a bit more considered in your decisions. You can kind of move slower, slightly slower today, in order to move fast later.”
Fanatics debuted its first retail sportsbook in Maryland in January and in March launched a beta version of its mobile sportsbook in Tennessee and Ohio. The PointsBet acquisition will provide it more market share and allow it to set up shop quickly in more states.
Original article: https://www.yogonet.com/international/news/2023/05/15/67147-fanatics-to-acquire-pointsbet-39s-us-assets-for-150m-gaining-access-to-15-states
