Fanatics has made its first major move into U.S. sports betting by purchasing PointsBet’s U.S. operations for $150 million in cash. The deal, which was announced on Sunday, will provide Fanatics with access to at least 15 states. Fanatics Betting and Gaming and PointsBet issued a joint statement regarding the acquisition, stating that both parties are confident in the outcome, and more details will be provided in the coming weeks. PointsBet is expected to hold a shareholder vote on the deal later this month, and Fanatics is planning to fund some of the remaining cash flow burn from PointsBet.
PointsBet, whose shares are traded in Australia, has forecasted a loss of between $77 million and $82 million for H2 2021 due to “very challenging” market conditions. The company has had to spend heavily on marketing to compete with larger rivals, DraftKings and FanDuel. The deal only includes PointsBet’s U.S. assets, and NBCUniversal will no longer have an equity stake in the company. NBC acquired a 4.9% equity stake in PointsBet in 2020.
Fanatics, a sports platform company, has been in talks with various sports betting companies over the past year as it plots its path forward in mobile gambling. The company owns commerce assets, a sports trading card business, and recently acquired legendary trading card company, Topps, for $500 million. Fanatics is building out a sports betting division, and this acquisition marks a significant step towards that goal.
Matt King, the CEO of Fanatics Betting, spoke about the company’s long-term strategy at the SBC Conference earlier this month, stating that it’s a “10-year journey.” King emphasized that the company plans to move methodically through that journey, taking a slower approach to make more considered decisions. Fanatics has forecasted revenue of $8 billion by 2023.
The deal between Fanatics and PointsBet is expected to be completed in the coming weeks, with Fanatics gaining access to the majority of states where PointsBet operates by the start of the NFL season.
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