Fanatics acquires PointsBet US in $150m deal
- By: Peace Nwankpa
- May 15, 2023
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Fanatics Inc. has acquired the United States assets of Australian bookmaker PointsBet in a $150 million deal confirmed on Sunday.
The deal is one of the biggest in the sports betting industry since William Hill was acquired by Caesars Entertainment in April 2021.
Rumors of the impending deal started circulating last week, and they were fuelled PointsBet CEO Johnny Aitken’s sudden withdrawal from the SBC Summit North America.
At the time, it was not confirmed if Fanatics was interested in buying PointsBet’s entire company or its US sports betting subsidiary.
“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s US business,” the firms announced in a joint statement.
“While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
Per the deal, PointsBet will retain possession of its proprietary racing, sports wagering and gaming platform. The company will also maintain its royalty-free license to use its Banach Technology assets. Fanatics, on the other hand, will receive PointsBet’s commercial commitments to NBCUniversal in full.
PointsBet revealed that its shareholders would hold a vote on the Fanatics acquisition in a meeting set for late June. It also disclosed that its funding requirement for the US division from the close of the shareholder meeting to the conclusion of the proposed transaction would be around $21 million. PointsBet consulted Flagstaff Partners and Moelis & Company LLC as financial advisers during the transaction.
The Massachusetts Gaming Commission is set to vote on Tuesday to approve Fanatics Betting and Gaming’s certificate of operation. PointsBet withdrew its sports betting license application in February this year.
Per a stock and equity sales agreement between the companies, the first phase of the acquisition will come to a close on August 31. PointsBet revealed that the second phase was expected to conclude around February 2024 but could be extended till May.
The agreement further stated that Fanatics would own the companies in charge of PointsBet operations in three states when the initial deal is finalised. On a rolling basis, the company will then own PointsBet’s assets in three other states.
PointsBet currently operates in 14 US states including Illinois, New York, New Jersey, Pennsylvania and Michigan. Fanatics failed to secure an online sports betting license in New York in 2021 when the state’s Gaming Commission issued nine licenses.
The acquisition furthers Fanatics’ attempts to enter the US sports betting market. Michael Rubin, the company’s CEO, sold his ownership stake in the Philadelphia 76ers and the New Jersey Devils last year, thus removing any conflict of interest if Fanatics ever sought to go into gambling.
The company recently launched its digital sports betting platform in Tennessee and Ohio and intends to begin operations in Massachusetts and Maryland by June.
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