There are still opportunities for sports betting companies that want to expand their business through M&A even with PointsBet off the table, Houlihan Lokey‘s Joel Simkins said.
Simkins is the global head of gaming at HL and shared his insights with Legal Sports Report following Fanatics’ securing a PointsBet transaction with a $225 million offer approved by shareholders Friday in Australia.
“There are many alternative options out there for other folks that want to enter the market that may have access to regulated jurisdictions, plus proprietary technology platforms and in particular we see exchange betting platforms (ex: ProphetExchange, Mojo, and Sportrade) as compelling too,” Simkins said.
“US sports betting is a multi-year story with many innings ahead in a long-term game.”
Deal shows interest in smaller sports betting companies
Simkins noted the jump in valuation (to $225 million from Fanatics’ first $150 million offer after DraftKings made a bid of its own) is meaningful, but it is still a “relatively small deal,” given the size of Fanatics overall.
The valuation when accounting for liabilities that are not up-front, like the roughly $49 million annual marketing spend with NBC Universal over the next five years, was “relatively full,” Simkins said. That bodes well for smaller operators feeling overshadowed by big brands and looking for an exit.
“On the surface the headline number may appear low; however, it doesn’t reflect the likely significant liabilities and other commitments that PointsBet had for their market access agreements as well as team and media partnerships.
“In reality, the valuation was relatively full and, in our view, shows that there is demand for similar platforms despite their relatively low market share, moderate consumer awareness, and single focus on OSB vs. diversified platforms that have iGaming. We see this deal highlighting potential for more robust M&A activity.”
DraftKings launches EveryMatrix casino content
DraftKings launched online casino content from EveryMatrix in New Jersey with more states to follow throughout the year.
Erik Nyman, president of Americas at EveryMatrix, said its SlotMatrix B2B offering has “the world’s largest games library and game-changing promotional features.”
Inspired extends with bet365, no US virtual betting yet
Inspired sign a long-term extension with bet365 for its portfolio of virtual sports.
There is no plan right now to launch virtual sports on its US platform, a bet365 spokesperson told LSR.
Inspired targeted the North American market over the past few years with virtual sports launches of basketball, American football and women’s soccer, with baseball coming soon.
BetMGM launches AZ sports betting location
The BetMGM Sportsbook at the Gila River‘s Santan Mountain Casino opened Friday.
BetMGM said it is the largest casino sportsbook in the state of Arizona.
The 7,000-square-foot book is the fourth in BetMGM’s partnership with Gila River.
BetMakers adds Parx Racing to fixed-odds offering
Fixed-odds horse bettors in New Jersey can now bet on Parx Racing content through MonmouthBets.
This is the ninth track available for fixed-odds product from BetMakers on the MonmouthBets app.
“BetMakers has been a strong technology and service partner to Parx Racing and their investment and performance in the Mid-Atlantic racing industry gives us confidence that offering our racing for fixed odds betting in New Jersey will be a win for all of Parx Racing’s stakeholders,” said Joe Wilson, COO of Parx Racing.
Elsewhere, BetMakers concluded its on-market buyback of up to 10% of shares announced last June. The company spent A$12.1 million on buying back more than 30.6 million shares.
