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The Fanatics logo is seen on the wall of the dugout before the game between the Pittsburgh Pirates and Milwaukee Brewers at PNC Park on July 3, 2022 in Pittsburgh, Pennsylvania. (Photo by Justin Pearl/Getty Images)
Justin Pearl | Getty Images
Fanatics have agreed to take over PointsBet’s US operations, marking the sports giant’s first major leap into US sports betting.
The transaction value is approximately $150 million in cash. The companies announced the deal Sunday night shortly after CNBC reported that they had reached an agreement.
Fanatics and PointsBet are pleased to enter into an agreement regarding Fanatics Betting and Gaming to acquire PointsBet’s business in the United States. companies said in a joint statement. “While there are still several steps in the process to complete the acquisition, both parties are confident of the outcome. Betting and gaming fanatics and PointsBet will provide more details on the proposed transaction and timely updates in the coming weeks.”
Fanatics will have access to at least 15 countries with the deal, according to people familiar with the deal who declined to be named because the discussions were private. Fanatics expect to reach the majority of states in which PointsBet operates by the start of the NFL season, according to one person.
PointsBet, which is publicly traded in Australia, is expected to hold a shareholder vote on the deal in late June. Only PointsBet US assets are part of the deal. Fanatics will plan to fund some of the remaining cash flow burning from PointsBet, which has had to spend big on marketing to compete with larger competitors. Kings and FanDuel.
PointsBet forecast a loss of between $77 million and $82 million in the second half of the year. Citing “extremely difficult” market conditions, the company said Sunday that it would need to raise additional capital “at a significant discount to recent market rates” in the near term if the deal with the fanatics falls through in some way.
According to PointsBet, NBCUniversal will receive revenue from its previous deal with PointsBet and will no longer have an equity stake. NBC acquired 4.9% of the shares in PointsBet in 2020.
Fanatics have had conversations with a number of different sports betting companies over the past year as they forge their way forward in mobile gambling.
“This is a 10-year journey,” Matt King, CEO of Fanatics Betting, said at an SBC conference earlier this month. “We’re going to move very methodically through that 10-year journey. And by doing that and taking that approach, it allows you to give more thought to your decisions. You can move a little bit slower today, in order to move quickly later.”
Fanatics is a sports platform company with a private valuation of $31 billion. The company expects 2023 revenues to be $8 billion.
The Fanatics own business assets, a sports trading card company, and build a sports betting division. The company has acquired the legendary trading card company Topps for 500 million dollars last year.
Disclosure: NBCUniversal is the parent company of NBC Sports and CNBC.
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