- Deal will be voted on at PointsBet shareholder meeting in late June
- NBCUniversal will no longer have equity stake in PointsBet
Digital sports platform Fanatics has agreed to acquire Australian-based sportsbook PointsBet’s US business for US$150 million in cash.
The arrangement will see Fanatics gain access to at least 15 states, according to CNBC, with the company expecting to have access to the majority of states where PointsBet operates by the start of the 2023 National Football League (NFL) season.
The deal will be voted on at a PointsBet shareholder meeting in late June. Sportico notes that Fanatics will pay US$100 million when the deal is completed, with the remaining US$50 million due in February 2024.
‘Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s US 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.’
The purchase comes after Fanatics launched its sportsbook app in Tennessee and Ohio at the start of May, continuing its march into sports betting as it bids to diversify the company beyond its core licensed sports merchandise business. The Michael Rubin-led firm had already been linked with deals for several betting companies, including Tipico and BetParx.
Last June, PointsBet landed a AUS$94.16 million (US$62.92 million) investment from SIG Sports Investments Corp to help expand its operations in North America. The decision from PointsBet to part with its US operations will also see NBCUniversal get proceeds from its previous deal with the company and no longer have an equity stake. The media giant took a 4.9 per cent stake in PointsBet in 2020.
Buying PointsBet’s US business marks Fanatics’ latest push into sports betting – a market where it has big plans.
Rubin (pictured above), Fanatics’ chief executive, believes that sports betting and additional business segments beyond the company’s merchandise operation could reach US$8 billion in profits in the next decade. The 50-year-old has since sold his minority stake in Harris Blitzer Sports & Entertainment (HBSE), owner of the Philadelphia 76ers and the New Jersey Devils, to avoid any conflicts of interest that would hinder Fanatics’ betting push.
PointsBet, meanwhile, has spent heavily in a bid to establish itself in the US, notably penning a US$500 million deal with NBC Sports to become the network’s official sports betting partner. However, as noted by CNBC, PointsBet has forecast a loss of between US$77 million and US$82 million for the second half of the year in the face of tough competition from other betting brands. The NBC deal was amended in February to reduce PointsBet’s annual advertising spend obligations.
While PointsBet ultimately struggled in its tussle with the likes of FanDuel and DraftKings in the US sports betting space, Fanatics, which was valued at US$31 billion in December after a US$700 million funding round, maintains it is in this for the long haul.
“This is a ten-year journey,” Matt King, Fanatics Betting chief executive, said at the SBC Conference earlier this month.
“We’re going to move very methodically through that ten-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.”