Failed merger negotiations may be behind DraftKings’ last-minute bid to acquire PointsBet USA and derail an already negotiated deal with Fanatics, according to a media report.

Block Fanatics from New York Entry

DraftKings chief executive officer Jason Robins is determined to “level the score” with Fanatics boss Michael Rubin, still holding a grudge after Rubin walked away from an advanced $48 billion merger negotiations in 2021, The New York Post claims based on unnamed sources.

DraftKings submitted a $195 million last-minute bid to acquire PointsBet USA, derailing the $150 million deal reached a month earlier with Fanatics, as well as Rubin’s ambition to establish Fanatics as a major player in the sports betting space.

“DraftKings already has scale,” claims one of the media sources, explaining that the rationale behind outbidding Fanatics is to block Fanatics from acquiring PointsBet’s online sports betting license in New York.

“If you want to be a player you have to be here,” the source added in terms of market presence in New York as “it is the largest state [with legal sports betting at the moment as] California, Florida and Texas are not offering sports betting.”

Australian-based PointsBet holds one of nine online sports betting licenses in New York and the state has no plans to increase the number of available licenses any time soon.

Speaking to CNBC earlier this month, Rubin said that DraftKings’ bid was more about derailing Fanatics’ bid and delaying its “ability to enter the market,” rather than improving DraftKings’ market position and size, showing that DraftKings is seriously concerned with Fanatics as a potential competitor.

As the operator with the second-largest market share nationwide, DraftKings has no other competitor even close to its 29% market share, and PointsBet’s US assets would not help it significantly cut the distance with the leader, FanDuel with 45%.

No Personal Motives Behind the Bid

Representatives from Fanatics declined to comment on the story when asked by the reporting media, while a DraftKings spokesman dismissed claims that there are any other motives besides the potential for “significant synergies and financial rationale,” as well as “interesting product and technology capabilities.”

To suggest that there is an ulterior motive that is personal and not business related is irresponsible and not grounded in reality.

DraftKings spokesperson

Acquiring PointsBet USA would be of significant importance to Fanatics as it would open up cross-market opportunities for its customer base buying official sports team gear, on top of the access to the market in New York, while for DraftKings the acquisition brings potential risks.

PointsBet is reportedly looking into the proposal and will likely force a “hell or high water” merger agreement, meaning a deal with or without regulatory approvals, while the proposal tabled by DraftKings is subject to acquiring regulatory approvals.

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According to the court documents, the company involved is Rancho Mesquite Casino. and the breach has reportedly affected two of its locations.

Class-action Lawsuit Against Eureka Casino

According to the data breach notification on the Maine Attorney General’s website 229,299 people were affected by the breach. This includes information belonging to employees, as well as customers. The personally identifiable information (PII) contained names, social security numbers, and financial information, including account/card numbers and security codes, according to the document.

The incident took place in November 2022, and Rancho Mesquite Casino (DBA Eureka Casino) notified the people affected. According to an 8NN report, it affected two of the company’s locations. Eureka operates hotels and casinos in Mesquite and Las Vegas, Nevada, and Seabrook, New Hampshire. The Maine AG office’s website didn’t explicitly specify which locations were breached.

According to the 8NN report, the letter sent to notify those whose PII was accessed by the hackers explained that the company took steps immediately to secure its systems. However, the attack took place in November 2022, and notifications were sent out in December 2022. This led to the company receiving further scrutiny over the delay in this instance.

The originating plaintiff in the class-action lawsuit is reportedly a California resident, who is claiming to be a victim of a ransomware attack, resulting from the security breach at Eureka Casino. The lawsuit was filed in a Las Vegas court, and the company was accused of negligence and failure to encrypt the sensitive information it was storing in its systems.

Cybersecurity Becoming a Prominent Topic

Data breaches are not a new occurrence and cybercriminals have noticed the world is moving increasingly toward digitizing everything. There is no shortage of targets and the gambling industry participants aren’t an exception to this. BetMGM was another example of this in late December of last year when it also suffered a cyber-attack.

The company confirmed it had launched an investigation at the tail end of December 2022. It acknowledged that patron data was impacted by the security incident. Again, social security numbers, dates of birth, and other details were accessed by the hackers. It’s standard practice for companies to collaborate with security companies in such cases.

There are also those trying to get ahead of the curve and the increasing number of industry participants collaborating with cyber-security experts and organizations is proof of that. Napoleon Sports & Casino joining the newly-established cybersecurity group of the European Gaming and Betting Association (EGBA) EGBA is one such example.

As companies learn to use and store an increasing amount of data to provide better experiences and more refined products, the need for enhancing cybersecurity also increases. PPI opens the doors for many frauds and in some cases – even identity theft, so companies are investing more time and resources into keeping their informational assets and customers safe.

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