Fanatics appears set to acquire PointsBet’s U.S. sports betting business for $225 million

Fanatics will pay $225 million after originally agreeing to a $150 million deal for PointsBet's U.S. sports betting business. A late offer from DraftKings is to thank.

by Jeff Neiburg

Published Jun. 28, 2023, 9:37 a.m. ET

Fanatics appears set to complete its planned acquisition of the U.S. sports betting business of the Australian-based PointsBet, though at a much higher price than originally announced.

PointsBet announced Wednesday that its board “unanimously” recommended that shareholders approve Fanatics’ $225 million proposal when the deal goes to vote Friday.

The two sides originally agreed to a $150 million deal in mid-May, but DraftKings swooped in two weeks ago with a nonbinding offer of $195 million — a move Fanatics CEO Michael Rubin said was an effort to block Fanatics’ effort to expand its nascent sports betting operation.

While the move by DraftKings doesn’t appear to have blocked Fanatics, it did succeed in making the multibillion-dollar apparel and merchandising company pay 50% more than it originally planned.

PointsBet said it was engaging in talks with DraftKings after its $195 million proposal, but it gave the Boston-based sports betting and fantasy giant a deadline to send a binding offer. That deadline was Tuesday, and PointsBet said in a statement that DraftKings was “unable” to finalize a binding offer.

PointsBet is the seventh-largest operator in the U.S. but has a relatively small market share compared to FanDuel and DraftKings. What PointsBet does give Fanatics is the ability to rapidly expand its geographical footprint. Fanatics has launched a beta product, first in Ohio and Tennessee and now also in Maryland and Massachusetts, but acquiring PointsBet gives Fanatics access to a dozen new markets, including Pennsylvania, New Jersey, and New York.

Rubin sold his minority share of the 76ers last June. Later that year, Fanatics hit a valuation of $31 billion. It has gone from a leading apparel company to an apparel, merchandise, and collectibles giant and is adding sports betting to that list with an app and rewards program it says will separate itself from others in the industry.

Fanatics has been focused on trying to get up and running with its new sports betting app in multiple markets by the start of football season. There are no concrete plans or timelines for when the company will launch in its new markets after the deal is finalized.