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Monday, July 15, 2024

Fanatics Eyes Major Betting Market Entry With PointsBet Win

  • Sports merchandising giant to gain PointsBet's 14 state licenses
  • Company still faces uphill climb challenging FanDuel, DraftKings
Harris-Blitzer
Kyle Terada-USA TODAY Sports

Fanatics is poised to gain a major boost for its betting operations with the pending completion of its PointsBet U.S. acquisition.

The sports merchandising giant prevailed late Tuesday in a battle with DraftKings for control of the U.S. operations of the Australian sportsbook. Fanatics raised its prior $150 million bid to $225 million, earning the unanimous recommendation of PointsBet’s board ahead of a shareholder vote set for Friday.

Prior to Fanatics’ initial bid for PointsBet’s U.S operations, the company was only operational in wide beta in Tennessee and Ohio, with further plans to expand to Maryland and Massachusetts.

PointsBet holds licenses in 14 states, including key betting locales such as New York, New Jersey, Pennsylvania, Illinois, and Michigan. Several of those states wouldn’t have been accessible to Fanatics without an acquisition.

As a result, Fanatics’ purchase gives the company a far greater scale on which to challenge current market leaders FanDuel and DraftKings.

The Michael Rubin-led Fanatics will still face a significant challenge in combining that expanded betting market access with its existing database of more than 95 million customers. PointsBet typically ranks as a minor competitor in many of its existing states, and its $19 million handle in New York for May 2023 was only 3% of the $561.4 million reported by state market champion FanDuel.

The PointsBet U.S. acquisition also brings the burden of a four-year, $250 million advertising deal that PointsBet holds with NBC and will be part of the purchase.

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