Fanatics is purchasing PointsBet in an all-cash deal worth $150 million. It’s a move that both sends ripples through the redhot US sports betting market, but also illustrates how difficult actually making money in that booming market can be – even for operators with established records.
The two companies announced the deal late last week in a Twitter posting reading, “Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s US business. 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.”
Though details of the deal are still forthcoming PointsBet chief executive Sam Swanell recently explained how the patchwork of state-by-state regulatory schemes in the US impacted the company in a statement to the Financial Review saying, “You had a situation [in 2018] where pretty much every online betting company in the world targeted that market. It is expensive, the cost of doing business there because it’s a state-by-state market. You need scale.”
So while PointsBet found the US market to be too much, Fanatics is hoping that their acquisition will give them a toehold in the US market. As of this writing, PointsBet is operating in 14 US States with coverage of about 35 percent of the US population. Fanatics is currently only active in Washington DC, with beta testing happening in two other states.
More details of this deal are forthcoming and will likely be released soon.