As the sports juggernaut’s first significant foray into American sports betting, Fanatics has agreed to acquire the U.S. operations of Points Bet.
Both Sides Being Optimistic about the Result
The transaction is estimated to be worth $150 million. Soon after CNBC reported that an agreement had been struck on Sunday night, the firms made the announcement.
“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business,” the two firms stated in a statement. “Even if there are still a number of processes to finish the transaction, both sides are optimistic about the result. In the upcoming weeks, Fanatics Betting and Gaming and PointsBet will offer further information on the proposed arrangement and timely updates.
According to persons familiar with the agreement who declined to be identified because the conversations were confidential, fans would have access to at least 15 states as a result of the agreement. By the start of the NFL season, one of the sources predicts that Fanatics will have access to the majority of the states where PointsBet operates.
Competing with Larger Rivals
A shareholder vote on the purchase is anticipated to take place in late June at PointsBet, whose shares are traded in Australia. The acquisition only covers PointsBet’s U.S. assets. The remaining cash flow burn from PointsBet, which had to spend a lot on marketing to compete with larger rivals DraftKings and FanDuel, will be partially funded by fans.
For the second half of the year, PointsBet predicted a loss of between $77 million and $82 million. The company stated on Sunday that if the agreement with Fanatics suddenly went through, it would need to seek new cash at a “significant discount to recent market prices” in the near future. The company cited “very challenging” market conditions in support of this claim.
According to PointsBet, NBCUniversal will get the money from its prior agreement with the company and no longer hold an equity share. In 2020, NBC purchased a 4.9% equity investment in PointsBet.
