Fanatics announced that it would purchase PointsBet’s online casino and sports betting operations in the US in a stock-and-equity deal valued at $150 million.
The acquisition, which still needs to be approved by regulators and PointsBet shareholders, effectively ends more than two years of speculation as to how Fanatics — a sports apparel and collectibles company headquartered in Jacksonville, Florida — would make its late entry into highly competitive US online casino and sportsbook markets.
If shareholders of Australia-based PointsBet agree to the sale at their next meeting in late June, Fanatics will grow from four states to 16. It would also be the most significant M&A action in the iGaming sector since Caesars Entertainment completed its $4 billion acquisition of William Hill in April 2021.
“Given Fanatics’ significant presence in the US sports market, we consider them to be a natural acquirer of our US business,” said Sam Swanell, CEO of parent company PointsBet Holdings Limited.
Sale is Best Option for PointsBet, CEO Says
The agreement calls for PointsBet Holdings Limited to sell its US operations to Fanatics Betting and Gaming (FBG). PointsBet operates in the big iGaming markets — specifically, Michigan, New Jersey, New York, and Pennsylvania. It is also live in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Virginia, and West Virginia.
PointsBet will retain its businesses in Australia, Canada, and India and its proprietary iGaming platform. It will also issue Fanatics a license to use its software in the US.
The Australian brand has struggled to attract customers in the US and is among the smaller operators in each state where it is live. Analysts have been predicting that the US iGaming market is ripe for M&A actions and industry consolidation.
Last month, PointsBet Holdings Limited reportedly hired a global investment bank in April to help sell its US assets. Talks to sell its US operations were already “well advanced” by that time, according to the CEO.
The board at PointsBet unanimously recommended that its shareholders take the deal.
“Despite the strategic success, building a valuable asset in the US, the costs of operating in a state-by-state environment, together with the requirement to build significant scale to compete against well-capitalized operators, led us to explore several options,” Swanell said Sunday.
“The sale of the US business to FBG delivers the most attractive risk-adjusted value outcome for shareholders compared to the risks and benefits of other options, including the status quo.”
Fanatics’ Plans Were Years in the Making
Assuming the acquisition is approved by shareholders and regulators, Fanatics will suddenly become a mid-sized sports betting operator — somewhere between Betfred and BetMGM.
Now comes the hard part: leveraging its sports apparel and collectibles business in such a way that it gets people to gamble.
The company opened its first retail sportsbook in Maryland in January at FedEx Field, home of the NFL’s Washington Commanders. It hasn’t launched in any other states since then, but it has market access in Massachusetts, Ohio, and Tennessee.
Fanatics applied for a sports betting license in New York in 2021, but the company wasn’t among nine operators to receive a license.
Plans to launch a sportsbook go back months earlier. It hired former FanDuel CEO Matt King as its CEO for betting and gaming in June 2021, and applied for a trademark for the name BetFanatics in May 2022.
Fanatics sells officially licensed gear from MLB, MLS, NBA, NCAA, NFL, and the NHL. It also owns the Topps trading card company and Candy Digital, a sports collectibles company.