Fanatics will buy the US business of PointsBet for $150 million, the company announced Monday morning in Australia.
The sale includes PointsBet‘s sports betting, iGaming and advanced deposit wagering businesses, as well as recent acquisition Banach, which develops its in-play technology. Fanatics also gets a copy of PointsBet proprietary technology, though PointsBet retains ownership of the platform, according to the release.
The deal still needs final approval from PointsBet shareholders and received unanimous approval from PBH’s board. A shareholder meeting will be held in late June.
Early reaction to the deal in Australia was sharp, with the stock down 18.4% at noon on Monday in Victoria. Shareholders are the main beneficiary of the deal for PointsBet, receiving between A$1.07 to A$1.10.
Why PointsBet for Fanatics?
The acquisition pushes Fanatics past the 12-15 states it targeted for the beginning of NFL betting this September.
Before the deal, Fanatics had access to four states:
- Maryland
- Massachusetts
- Ohio
- Tennessee
PointsBet adds 12 more states to the list, including closed or expensive markets to enter including:
- Illinois
- Michigan
- New York
- Pennsylvania
- Virginia
Tech, price favorable
The reaction to PointsBet stock could be because holders expected more out of a sale that pulls the company out of the US for 18 months.
“Seems like a steal,” one industry source opined given the sticker price for the tech stack, market access, and database.
The key to the deal for Fanatics is PointsBet’s risk and trading platforms, and the acceleration of Fanatics Betting & Gaming CEO Matt King‘s plans for the operator this year, a source familiar with the deal told LSR.
PointsBet purchase price too low?
The stock reaction may be from a lower-than-expected return for the US assets, but CEO Sam Swanell said it was the best option.
“The sale of the US Business to Fanatics Betting and Gaming delivers the most attractive risk-adjusted value outcome for shareholders compared to the risks and benefits of other options including the status quo,” Swanell said.
The costs of operating in a business regulated at the state level and the scale needed to take on competitors like DraftKings and FanDuel were too high, he added.
One analyst told LSR this deal could be an important “litmus test” for the valuations in the US sports betting industry.
Fanatics taking over NBCUniversal deal
The recently restructured PointsBet marketing deal with NBCUniversal is transferred to Fanatics.
The renegotiated agreement leaves $245 million in cash to be spent over the final five years of the deal.
NBC had the option to buy nearly 67 million shares at A$13.00 in 2025 but waived those rights as part of the Fanatics acquisition, PointsBet confirmed. Those were not expected to be exercised, given the drop in share price since the deal closed. PBH closed at A$1.85 on Friday.
LSR Reporter Mike Mazzeo contributed to this story.
