In a statement issued late Tuesday night, the PointsBet Board of Directors unanimously approved the sale, according to PointsBet Chairman Brett Paton;
“The Board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty. Fanatics Betting and Gaming conducted their diligence process and negotiations in a highly professional manner at all times. The offer to ‘front end’ the additional consideration is an element which we regarded as a welcome and significant benefit to our shareholders.”
DraftKings matched Fanatics’ original offer of $150 million, but the sports betting giant has since stepped aside from bidding. DraftKings CEO Jason Robins said in a statement that the company decided to focus on its own growth and “not pursue an acquisition that would distract from our core business.”
Fanatics’ increased offer shows the company’s growing ambitions in the US sports betting market. The company has already made a number of investments in the space, including a minority stake in the Score Bet and a partnership with Major League Baseball to launch a Ohio online sportsbook.
The acquisition of PointsBet would give Fanatics a major foothold in the U.S. sports betting market. PointsBet is available in 15 states, including Ohio, with over 600,000 active users.
Fanatics’ acquisition of PointsBet would be the latest in a string of deals in the sports betting industry. Several major sports leagues, including the NFL, NBA, and NHL, have struck deals with betting operators in recent months.
The sports betting industry is expected to continue to grow in the coming years. According to a recent report by the American Gaming Association, the sports betting economy could generate over $15 billion in yearly revenue by 2025.
The acquisition of PointsBet would give Fanatics a major piece of the pie in this growing market. The company is well-positioned to take advantage of the growth of sports wagering, as it has a strong brand and a large customer base.
Fanatics is a sports merchandise giant with various brands, including Fanatics Authentic, Lids, and Sportsmemorabilia.com.
The company also operates a number of e-commerce platforms, including Fanatics.com and Shop.MLB.com.
PointsBet Ohio struggled with the costs of doing business in a robust and competitive Ohio sports betting market, finishing each month outside the top five operators.
The company earned just $432,974 in April revenue and the company’s business model of limiting winning bettors wasn’t well received in Ohio.