Don’t look now, but Fanatics is coming up on the outside. Still far from the leaders of the pack, but surely a bit closer than they were last month.
In its latest move, Fanatics signed a deal to purchase PointsBet’s U.S. business for $150 million in cash. The agreement follows on the heels of the company’s debut of online sportsbooks in Ohio and Tennessee.
Added to the PointsBet acquisition, Fanatics will add both technology and trading skills to the marketplace. And its entrance in the online world of Massachusetts is closing in.
PointsBet shareholders will vote on the deal in late June. Fanatics will pay $100 million when the deal concludes, with another $50 million due in February 2024, according to Sportico.
“While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome,” Fanatics and PointsBet said in a joint statement. “Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
Meanwhile, Fanatics’ primary business—its e-commerce empire—has grown in dramatic fashion, increasing the company’s valuation to $31 billion last December.
Officials with Fanatics say they have two advantages over other sportsbooks, and its e-commerce empire is behind both in some way. A database of 95 million customers who provide marketing leads, and the e-commerce business offers a platform to offer betting rewards redeemed for hats, jerseys, trading cards and more.
Still, competition is stiff, the Wall Street Journal says. FanDuel Group, DraftKings Inc. and BetMGM hold about 85 percent of the sports-betting market in the U.S. Expanding into sports betting will test CEO Michael Rubin’s vision for a digital platform spanning businesses across sports, including sports-team gear, autographed memorabilia and trading cards.
PointsBet is not in the mix at the top, and of late, has given up its vision of a leading contender.
When launched in the U.S. in 2019, the Australian-based company adopted an aggressive approach in the first few years: a $500 million deal with NBC Sports and a partnership with the University of Colorado. But growing competition and accelerating costs to acquire customers. The deal with Colorado ended in March.
Last June, finance giant Susquehanna purchased 12.76 percent of PointsBet, making it the largest shareholder.
The company’s net win (sports betting and iGaming) in the U.S. was $33.1 million (AUS $49.8 million) for its most recent quarter, more than double its total for the same quarter last year ($16.3 million).