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Sports betting powerhouse DraftKings has actually made a $195 million, all-cash deal for PointsBet’s U.S. properties, it stated on Friday, topping an earlier quote byFanatics
Last month Fanatics consented to purchase the Australian business’s U.S. operations for $150 million in an effort to improve its existence in sports betting.
“While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s U.S. business,” stated DraftKings CEO Jason Robins in a declaration. “We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.”
DraftKings, which is openly traded, has a market cap of about $10 billion.
Robins informed CNBC, while the offer would not be transformative for DraftKings, it would permit the business to grow market share.
“We do not expect this to have any impact on the path to profitability,” he included.
PointsBet is the seventh-largest sports wagering operator in the U.S., however it’s quickly been shedding money. The business formerly anticipated a loss of in between $77 million and $82 million for the 2nd half of the year.
If the offer progresses, it would be a significant blow to Fanatics’ sports wagering efforts, as the business was seeking to broaden its reach ahead of the NFL season. The handle Fanatics would have offered the business access to a minimum of 15 states where PointsBet currently runs.
Fanatics CEO Michael Rubin informed CNBC after the DraftKings statement that he’s extremely doubtful of the offer, which he considers as DraftKings trying to slow Fanatics down.
“It’s a move to delay our ability to enter the market,” Rubin stated. “I guess they are more concerned about us than I would have thought.”
There are still some obstacles, however, for DraftKings. First, the offer needs to be authorized by the PointsBet board, which will evaluate the brand-new proposition and identify its next actions, according to the business.
The business stated Friday, “subject to the outcome of the review being undertaken of the DraftKings Proposal, the Board continues to recommend that Shareholders vote in favour of the FBG (Fanatics Betting and Game) Transaction.”
And then there’s the capacity for regulative obstacles: DraftKings and FanDuel control the U.S. sports wagering market, which might negotiate to get a lot more market share controversial.