Fanatics Wins PointsBet Sweepstakes

Guests at the Fanatics Super Bowl Party on Feb. 3, 2018 in Minneapolis, Minnesota, as we look at the PointsBet Q1 handle during its transition out of the American market — Guests at the Fanatics Super Bowl Party on Feb. 3, 2018 in Minneapolis, Minnesota. Photo by Daniel Boczarski/Getty Images for Fanatics via AFP.

The Australian sportsbook PointsBet’s sale of its U.S. assets was swiftly finalized on Friday following an extraordinary group meeting held in Sydney.

Two rival bids were made for PointsBet’s U.S assets, with DraftKings, a major American betting company, competing against Fanatics, a top sports apparel business looking to expand into the sports betting market.

Fanatics has been operating in the legal sports betting industry for a few years, but has struggled to gain traction in the highly competitive market of top sports betting apps. Currently, Fanatics has secured market access in only three states: Maryland, Ohio, and Tennessee.

The company aimed to expand its presence to a minimum of twelve states before the start of the NFL season, a goal that was achieved following their most recent acquisition.

The acquisition of PointsBet accelerates Fanatics’ ambition to establish a significant presence in the expansive American sports betting market. PointsBet currently operates in 14 states across the country, such as Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia.

New York, New Jersey, Pennsylvania, and Ohio are consistently ranked among the top five most successful legal sports betting states in the nation, making them valuable additions to Fanatics’ sportsbook ambitions.

$225 million gets it done

After PointsBet announced plans to leave the American market, Fanatics quickly entered the bidding for their U.S. assets. Fanatics initially offered $150 million, but DraftKings outbid them with a $195 million offer shortly after.

Before the shareholder vote last week, Fanatics increased their bid by 50% to $225 million, while DraftKings maintained their $195 million offer. Despite the initial bid increase, the PointsBet board had already been advising shareholders to approve a sale to Fanatics.

Ultimately, PointsBet shareholders overwhelmingly approved Fanatics’ $225 million all-cash offer with a 99.16% vote in favor.

A spokesperson from Fanatics expressed excitement that shareholders of PointsBet Holdings Inc. have approved the acquisition of PointsBet’s U.S. businesses. This marks a significant milestone for Fanatics Betting and Gaming, allowing them to expand their presence in online sports betting, advance deposit wagering, and iGaming markets in the United States.

Why the sale?

PointsBet has successfully penetrated the U.S. market, with 14 states accepting PointsBet wagers. Among the roughly 60 online sports betting sites in operation in the U.S., only seven have managed to capture a market share of 1% or more, and PointsBet is one of them.

Brett Paton, Chairman of PointsBet, attributed their departure from the U.S. market to high expenses. He stated that operating in the U.S. would necessitate a substantial amount of capital and additional fundraising.

The company clearly was not willing to do it. The sale of PointsBet will enable the company to concentrate on their platforms in the Australian and Canadian markets.

Fanatics going forward

Fanatics quickly made a name for themselves in the U.S. legal sports betting industry by defeating DraftKings and acquiring a major player in the best sportsbooks.

The transition from PointsBet to Fanatics will take some time to complete, but the timing is ideal. Fanatics will have two slow summer months to seamlessly integrate their product into markets before the NFL season kicks off.

Fanatics is set to assume control of PointsBet operations in three states simultaneously. The specific jurisdictions in the initial rollout have yet to be confirmed, but Fanatics executives are optimistic that New York sports betting will be among them.

Written By:
Perry Sandra

Perry Sandra and betting go hand-in-hand. Both are characterized by “odds”. Dave fancies himself as one of the most dedicated sports and pop-culture junkies around, to the chagrin of his family and friends. Following sports for 50 years and writing about it for 20, Dave hasn’t found a sport yet that can’t contribute to 2-3 straight hours of couch time. That search remains ongoing. As a good old Canadian boy, hockey is in Dave’s heart, as is curling sadly. But evolution is a real thing and that’s why football, baseball, and just about every sport on the planet has become a passion. Dave isn’t afraid to kill some time obsessing over politics or the far-too-frequent awards shows the consume the airwaves.