DraftKings vs. Fanatics Rivalry Exposed With PointsBet Bids

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 ongoing competition for market dominance in the U.S. legal sports betting industry has largely overlooked the rivalry between the top sports betting apps. That is, until now.

The recent events of the past fortnight have illuminated a fierce competition between two sportsbooks in the rapidly growing U.S. market. PointsBet, an Australian company, has expressed interest in leaving the U.S. market and is looking to sell all of its American assets. This has revealed a long-standing rivalry between DraftKings and Fanatics, who were previously in talks for a merger but are now vying to acquire the PointsBet brand.

The general meeting for PointsBet in Sydney, Australia on June 30 will discuss two proposals for the company’s USA assets. Fanatics initially bid for the sports betting brand, but DraftKings later outbid them.

What is at stake?

PointsBet, an Australian company, is currently in the process of divesting its U.S. assets and is accepting bids for its popular sports betting brand. Since its inception in 2017, PointsBet has become a well-known and innovative sports betting brand in Australia, the U.S., and Canada.

PointsBet currently has sportsbooks in 14 U.S. states, such as Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia. Any acquisition of PointsBet would include the licenses in those states as well as the user database in those regions.

Their most crucial license is in New York, a state that has restricted its legal sports betting industry to only nine top sportsbooks. New York has quickly become one of the most lucrative markets in the country, with monthly handles reaching $1 billion. PointsBet, while not the largest player in the state, has successfully captured a significant market share.

PointsBet offers a unique and innovative “PointsBetting” feature that allows users to potentially boost their earnings based on the accuracy of their bets. In addition, PointsBet promo codes are available for users to take advantage of at this sportsbook.

The competing proposals

Fanatics has been actively working to increase their footprint in the U.S. market, making their involvement in the PointsBet bidding expected. As a top player in licensed sports merchandise globally, Fanatics has been looking to capitalize on their extensive reach by entering the sports betting platform. With ample funding and a strong position, Fanatics is well-equipped to potentially acquire PointsBet’s U.S. assets.

Fanatics was the initial bidder for PointsBet U.S.A., offering a bid of $150 million.

DraftKings has expressed interest in acquiring PointsBet U.S.A. and has made a $195 million proposal following Fanatics’ bid. As one of the top legal online sports betting companies in the U.S., DraftKings would solidify its elite status in the market by successfully acquiring the PointsBet brand. With their history of offering generous promotions, DraftKings has already gained a significant market share, and this potential acquisition would further enhance their position in the industry.

From alliances to rivals

DraftKings and Fanatics were once considering merging to create a massive legal sports betting company, but now they are competing entities in the PointsBet acquisition. Executives from both companies discussed the possibility of a merger in 2021, which would have resulted in a $48 billion company with each holding a 50% stake.

The secret negotiations ended when Fanatics CEO Michael Rubin abruptly left the discussions, leading to their collapse. There are whispers that DraftKings CEO Jason Robins still harbors feelings over the failed negotiations.

The New York Post reported that DraftKings made a bid for PointsBet in response to Fanatics disrupting the 2021 merger. The report suggested that Robins, the CEO of DraftKings, “was thwarted before, and now he is seeking revenge.”

Now we wait

On June 30, PointsBet, DraftKings, Fanatics, and all American sports betting sites are set to have a significant day. PointsBet’s board has approved a sale to Fanatics, but shareholders have the power to potentially change the outcome. While the PointsBet board is in favor of the Fanatics sale, the final decision rests with the shareholders.

Clearly, DraftKings presented the better offer, with a bid of $195 million that is 30% higher than Fanatics’ proposed amount.

The merger talks with Fanatics offer much greater potential benefits than DraftKings, leaving us in a cautious “wait and see” stance as the U.S. legal sports betting industry is on the brink of significant transformation.

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.