Fanatics Betting and Gaming has officially completed its acquisition of PointsBet’s US operations, marking a significant expansion in New Jersey where it has now gone live. This latest development brings Fanatics’ sportsbook services to all 20 states where PointsBet was previously active, covering approximately 95% of the US online betting market.

The acquisition, valued at $225 million, was finalized in April 2024 following an agreement made last year. As part of the transition, all existing PointsBet customers in New Jersey will have their usernames, passwords, account balances, rewards points, and responsible gaming settings seamlessly transferred to the Fanatics Sportsbook platform.

Expanding Casino and Sportsbook Operations

New Jersey also becomes the fourth state where Fanatics has introduced its online casino, featuring a variety of games including roulette and slots. The Fanatics Sportsbook is already operational in states such as Arizona, Colorado, Connecticut, and many others, while the Fanatics Casino is available in Michigan, Pennsylvania, and West Virginia.

Strategic Acquisition and Market Expansion

The journey to this acquisition began in June 2023 when Fanatics made an initial $225 million bid for PointsBet US, following a competitive bidding process that included a rival offer from DraftKings. Although DraftKings initially proposed a higher bid of $195 million, they later withdrew, allowing Fanatics to proceed with their acquisition plan. The deal was cemented when PointsBet shareholders approved the acquisition at a meeting on June 30.

Over the past year, Fanatics has systematically taken over PointsBet’s operations across various states, with Kansas and North Carolina being recent additions. This strategic expansion not only enhances Fanatics’ footprint in the US market but also strengthens its position as a leading provider in both sports betting and online casino services.

Fanatics now operates 19 retail locations, including exclusive sportsbooks at notable venues like Progressive Field and Nationwide Arena, and the unique distinction of running the only sportsbook inside an NFL stadium at Commanders Field.

This acquisition represents a major milestone in Fanatics’ strategy to dominate the sports betting and gaming industry across the United States, promising greater market reach and enhanced customer experiences across its platforms.

Source: “Fanatics concludes PointsBet takeover with New Jersey launch”. iGaming Business. May 8, 2024.

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PointsBet announced that an overwhelming majority of its shareholders supported the sale of its US-facing business to the well-known sports merchandise company, Fanatics. Fanatics Betting and Gaming, the company’s sports retail division, filed a proposal for the takeover of PointsBet’s US assets in a deal for some $225.0 million, a significant increase from its initial proposal.

In light of the fresh proposal, some 98% of PointsBet’s shareholders showed approval for the sale of the company’s US business arm. The announcement comes at a time when PointsBet faced difficulties while trying to expand in the competitive US sports betting market.

It was back in 2021 when PointsBet started its US expansion. Brett Paton, PointsBet’s chairman, who was recently cited by The Sydney Morning Herald, spoke about the frustration of the shareholders over the share price of the company since the start of its US-facing expansion and the costs associated with that venture. “Let me say on behalf of your board that we understand your disappointment about the share price performance of our company,” he said, explaining that he and PointsBet’s chief, Sam Swanell, understand their frustration and concern.

“Continuing to operate the US business would require significant capital and further capital raises.“

Brett Paton, chairman at PointsBet

On the other hand, Paton spoke about the ongoing high costs required to continue the US business operation. Speaking about the sale of US assets to Fanatics he pointed out that the “transaction addresses that uncertainty.”

While the aforementioned transaction will offload PointsBet’s US business, the company will remain in control of its Australian and Canadian businesses. Additionally, it will continue to leverage its leading iGaming and sports betting technology that is used within regulated gambling markets in Australia, as well as North America, providing further growth opportunities.

Fanatics Wins a Tough Fight for PointsBet’s US Business

It was last month when Fanatics and PointsBet agreed on a $150 million deal for the latter’s US business. At the time, Fanatics agreed to pay $100 million upon closing of the agreement as well as $50 million in February next year.

But what was thought to be a done deal had an unexpected turn, after the US gaming and betting giant, DraftKings, tabled a new proposal of $195 million for PointsBet’s US-facing business, surpassing the initial $150 million offer by Fanatics.

However, Fanatics wasn’t going to let this happen and responded with an increased bid of $225 million, which was ultimately the successful one. In light of the new bid, DraftKings confirmed earlier this week that it will no longer pursue options for obtaining the US-facing business of PointsBet.

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