Fanatics Becomes Instant Player With PointsBet Acquisition

Dave Bonderoff

Last Updated: May 15, 2023 5:18 PM EDT • 2 min 48 sec read. Twitter link Google News Link

Fanatics, the world’s largest sports apparel and collectibles company made a major move to make good on their pledge to become a player in the U.S. legal sports betting industry. The company went from just one retail sportsbook at FedEx Field in Maryland and beta testing in two U.S. jurisdictions (Tennessee and Ohio) to full market access in 15 states, which make up 35% of the American population with a simple announcement on Sunday of their acquisition of Australian-based PointsBet.

Fanatics has been a name to watch on the U.S. legal sports betting scene for a year now, but the hype, until now, hasn't yet translated to market share. The company has yet to fully launch a sports wagering product and take advantage of a database that is said to include 95 million people.

The price tag for PointsBet? A cool $150 million U.S.

EDITOR'S NOTE: Fanatics just launched. Now would be a good time to check out our Fanatics Sportsbook review.

What it means for Fanatics

For Fanatics, the purchase of PointsBet, the seventh largest online sports betting provider in the U.S. market, is clearly a play for immediate market access to be among the best sports betting apps. Fanatics has signaled their intention to become the world's top sports betting destination within 10 years, but has been slow to get off the mark until now.

The $150 million price tag for PointsBet’s U.S. assets is, on its face, a seemingly good deal for a company with its own proprietary technology and market access into some of the biggest and best sports betting markets in the U.S, market including New York, New Jersey, Illinois, Michigan, Colorado, and Pennsylvania.

Fanatics avoids an application process in 15 jurisdictions, some of which are not expected to welcome new sports betting providers into their jurisdictions. New York is the top sports betting state in the nation by far, New Jersey is second, while Pennsylvania and Illinois are consistent top-five sports betting states in the nation.

Fanatics also inherits a deal that NBCUniversal signed with the brand that guarantees that the network would spend $90 million per year with the betting site.

Is it a win for Fanatics? You bet. Market access doesn't grow on trees nor does massive exposure on one of America's main television networks.

What PointsBet gets

PointsBet, which originally launched in the U.S. market in 2019, has not been shy about their desire to sell their U.S. assets. They were quick to market in the American scene but largely unable to gain much traction against the best sports betting sites.

According to PointsBet’s managing director and group CEO Sam Swanell: “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 a number of options.”

PointsBet shareholders are expected to receive between 71 cents and 73 cents per share, far below the peak of $12.69 the company was trading at in February 2021.

Is it a win for PointsBet and their shareholders?

Not so much. Sure, the company gets their exit out of the American market so they can concentrate on other global assets such as home-country Australia and their successful platform in Canada. But 71 cents is even far below what the company was worth during the start of COVID when sports betting companies' values fell off the map.

That said, PointsBet was hoping to leave the U.S. market and Fanatics presented an opportunity for a quick and clean exit.

Kentucky bettors, are you ready to get involved?

PointsBet may be leaving the U.S. market, but there are still plenty of popular sportsbooks available. With the upcoming Kentucky sportsbooks launching soon, pre-launch offers are starting to appear. The best Kentucky sports betting promotions & bonuses will be available on top soon-to-be-legal Kentucky sportsbook apps.

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In the end...

Fanatics had stated that they hoped to be active in 12-15 states before the start of the NFL season. Fanatics CEO Michael Rubin says he hopes his company is the world's top sports betting provider within 10 years.

They certainly were not on track to do that before the PointsBet acquisition.

Fanatics seems poised to now at least make a dent in the market share enjoyed by some of the best sportsbooks like FanDuel, DraftKings, BetMGM, and Caesars.

Written By:
Dave Bonderoff

Dave Bonderoff and betting go hand-in-hand. Both are characterized by "odds". Dave fancies himself as one of the most dedicated sports and pop-culture junkies around, to the chagrin of his family and friends. Following sports for 50 years and writing about it for 20, Dave hasn't found a sport yet that can't contribute to 2-3 straight hours of couch time. That search remains ongoing. As a good old Canadian boy, hockey is in Dave’s heart, as is curling sadly. But evolution is a real thing and that’s why football, baseball, and just about every sport on the planet has become a passion. Dave isn’t afraid to kill some time obsessing over politics or the far-too-frequent awards shows the consume the airwaves.