Fanatics Betting & Gaming will be coming to Michigan sometime in the near future, thanks to its purchase of PointsBet’s U.S. division.
But does that mean it will be in 2023?
The sports memorabilia franchise purchased PointsBet’s U.S. assets for $225 million with the intention of launching an online sportsbook and online casino in newly acquired states like Michigan sometime this year.
However, new advertising from PointsBet continues to show growth in its Michigan online casino product.
Should be good news for Fanatics Betting & Gaming. If their Michigan product is doing better than expected, hooray for Fanatics. Or will the new promotion and signs of life in a division that was moribund when Fanatics tendered its offer slow the process down?
Fanatics counted on Michigan to be part of a bunch of active states from PointsBet that can give it instant access to a nice bundle of states in time for the NFL season.
Another 12 other states come with the PointsBet deal.
In a statement, Fanatics confirmed to have control of PointsBet assets this year.
“Fanatics Betting & Gaming is building an online and retail (physical location) sports betting (“Sportsbook”) and online casino (“iGaming”) real-money wagering platform. Fanatics Betting & Gaming launched its first retail Sportsbook in Maryland in January 2023, and in May 2023 launched the beta version of its mobile Sportsbook in both Tennessee and Ohio. Fanatics intends to launch and operate its Sportsbook and iGaming platform in additional states in 2023.”
But Michigan regulators have not communicated with the parent company, Fanatics, about licensing in Michigan.
The Michigan sportsbook remains sixth all-time in online handle at $336.3 million while generating $29.5 million in revenue over its lifetime. It’s the only online operator generating more sportsbook revenue than online casinos.
PointsBet Casino Michigan is last in online casino revenue at just $25.7 million.
PointsBet made it clear the focus rested on the sportsbook, with high profile promotions from Drew Brees, Allen Iverson and Rip Hamilton.
This year, they added more emphasis on its online casino. As the sportsbook dipped, online gaming rose. A TV ad campaign pumped $9.8 million in online casino revenue in the first seven months of the year which produced a handle 101 percent higher than the year before.
It has surpassed $1 million in 10 consecutive months.
Before anyone gets excited, the numbers are small time numbers.
One thing to report about the sale—PointsBet has agreed to return millions to shareholders, with the first payment of $203.6 million. This was confirmed during the company’s latest general meeting.
After that, a second capital return of between $80.8 million and $92.4 million will see money returned to the shareholders upon the subsequent completion (around March 2024).
In other news, PointsBet published its FY 2023 results, demonstrating a turnover of AUD 5.74 billion. The company attributed its stellar performance to the divestment of its assets, which allowed it to focus on other lucrative initiatives.
Fanatics, on the other hand, will now be in the perfect position to challenge some of the mainstays of the U.S. gambling market, including juggernauts such as FanDuel and DraftKings. Analysts believe that the acquisition will help Fanatics capitalize on the upcoming NFL season.
In the meantime, the transaction between PointsBet and Fanatics will also provide the latter company with a unique shot at New York’s gambling market. By acquiring PointsBet’s U.S. business, Fanatics also hopes to secure an entry into one of the most promising U.S. markets.
While regulators agreed that the company’s suitability to hold PointsBet’s N.Y. license must be evaluated, the move is nevertheless a big opportunity for Fanatics to grow its U.S. footprint.
