Sports betting giant DraftKings has put forward a bold $195 million cash offer to acquire PointsBet’s U.S. assets, surpassing a previous bid by Fanatics, according to a press release. This move comes after Fanatics agreed to purchase PointsBet’s U.S. operations for $150 million in an attempt to strengthen its presence in the sports gambling industry.
In a statement, DraftKings CEO Jason Robins expressed the company’s focus on efficient operations and organic revenue growth in the United States while also taking advantage of attractive opportunities like acquiring PointsBet’s U.S. business. Robins believes that DraftKings’ scale and ability to generate synergies make them uniquely positioned to present this superior proposal.
With a market capitalization of approximately $10 billion, DraftKings is a publicly traded entity. Robins stated to CNBC that while the deal won’t have a transformative impact on DraftKings, it will enable the company to increase its market share without affecting profitability.
PointsBet, the seventh-largest sports betting operator in the U.S., has been experiencing financial difficulties, with a projected loss of $77 million to $82 million in the second half of the year. If the deal goes through, it would deal a significant blow to Fanatics’ sports betting expansion plans for the upcoming NFL season. Fanatics intended to access at least 15 states where PointsBet is already operating.
Fanatics CEO Michael Rubin expressed skepticism about the deal, viewing DraftKings’ actions as an attempt to impede Fanatics’ progress. “It’s a move to delay our ability to enter the market,” Rubin commented, highlighting the unexpected concern from DraftKings.
However, there are still hurdles for DraftKings to overcome. The proposed deal must be approved by the PointsBet board, which will review the new offer and determine the next steps. The board currently recommends that shareholders vote in favor of the Fanatics Betting and Game (FBG) Transaction, pending the outcome of the review.
Additionally, regulatory challenges may arise as DraftKings and FanDuel dominate the U.S. sports betting market. Further expansion to gain more market share could potentially face contention.
Overall, DraftKings’ move to acquire PointsBet’s U.S. assets demonstrates their ambition to solidify their position in the sports gambling industry and capitalize on strategic opportunities for growth.
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