PointsBet agrees to sell US assets to Fanatics

PointsBet has agreed to accept the offer tabled by Fanatics, a total of $225 million, which will allow the apparel company to acquire the outstanding US assets of the prominent sports betting company. This comes as a relief after several weeks of toing-and-froing between DraftKings and Fanatics on the one hand, and PointsBet on the other.

PointsBet announced earlier this year that it would be selling its US assets, a move to drop some of its underperforming business operations and focus on its home market in Australia. The news was welcomed by Fanatics, which has recently rolled out its Fanatics Sportsbook division, and is actively seeking to expand.

An offer of $150m to match PointsBet’s askance price was placed and met by Fanatics with the former recommending to shareholders to proceed with the deal. However, DraftKings decided to join the race, and tabled a 30% premium on the original $150m, pushing the total price to $195m, and challenging Fanatics.

However, Fanatics did not budge and agreed to push the price to $225m, all defiance in the face of DraftKings, a company that is a seminal operator in the North American betting space, and a company that is keen to retain its position at the front of the pack.

Critics suggested that DraftKings was only trying to inflate the price to make Fanatics cough up a little more for the transaction, which is precisely what is happening, with PointsBet now accepting the bid from Fanatics after DraftKings failed to make a binding agreement and withdrawing from the race.

Fanatics and PointsBet both seem to be winning from this transaction, although Fanatics could have saved some of its war chest. Regardless, the parent company of the sportsbook division has a robust valuation of more than $30bn and can afford to bootstrap its nascent operation.

Nurturing a sportsbook division to fruition would have to also involve the division’s own merits, however. In other words, Fanatics Sportsbook has money on its hand to use and make strategic acquisitions and break ground into new markets.

Going up against the likes of DraftKings and FanDuel would necessitate a good long-term vision and strategy lest the company follows the same fate as MaximBet, branded after the popular men’s magazine, which had to shutter its operations in November.

Fanatics has a vast database of customers it can tap into, but it has to also be cautious as a direct overlay between the betting and apparel operations does not sit well with regulators. Meanwhile, the company recently expanded in Maryland with its betting app.

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