DraftKings joins PointsBet buyout race

Fanatics Sportsbook, the sports betting division of the namesake apparel company, thought that it is in a pretty good position in the United States, and it undoubtedly is so. Yet, a previous ambition to secure the assets of PointsBet, a rival that is leaving the market, in the country may now come a cropper as another bidder has entered the race.

DraftKings, one of America’s largest sports gambling companies, is making a play for PointsBet US, offering a 30% premium on Fanatics' existing offer for the company, and willing to purchase the assets for $195m. Originally, Fanatics pitched $150m for the assets and for a moment there, it seemed like it would be the only bidder, too.

DraftKings CEO and Co-Founder Jason Robins have welcomed the opportunity to see his company make a play for the prominent company, confident that it would yield numerous synergies and benefits for his brand.

DraftKings is presently one of the largest sports betting companies in the country, neck-and-neck with the likes of BetMGM and FanDuel. Robins explained:

"While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s US business."

He further added that his company is in a strong position to pitch an offer that would be much better than the rival bid by Fanatics, owing mostly to the fact that DraftKings is also able to derive much better synergies from the acquisition. There are meaningful and tangible potential gains from the transaction as well.

DraftKings CFO Jason Park said that should the bid succeed, DraftKings would see its adjusted EBITDA potential in 2024 and 2025 see much better overall performance. The offer would allow the company to offer new bet types and ensure that more of the company’s operations are handled in-house.

DraftKings has already engaged with advisors, including BofA Securities and The Raine Group, as well as Sullivan CromwellLLP, which is the company’s legal counsel, all of which will oversee and guide DraftKings as it pursues the purchase. DraftKings’ potential acquisition will definitely strengthen the company’s position in the market, and indeed lead to better synergies.

Fanatics on the other hand would have to think and decide if it wants to pay a higher price in order to get a firmer foothold in the regulated gambling market as well. Recently, Fanatics expanded with its betting app beta in Maryland.

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