PointsBet Shareholders Approve Payout Plan From Fanatics Sale

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PointsBet shareholders approved a plan that will net them up to $295 million after Fanatics completes its acquisition of their US business early next year.

Tuesday’s vote saw PointsBet shareholders vote to distribute proceeds from the sale into two phases. The initial completion is scheduled for mid-September with the subsequent completion expected in March 2024.

Fanatics agreed to purchase PointsBet US for $225 million in June, ahead of the sports retail giant’s foray into online gaming. That price is 50% higher than the original offer of $150 million after DraftKings submitted a competing bid of $195 million.

PointsBet has two-step payout plan

Fanatics will pay the Australian-based operator $175 million of that payment in mid-September, according to the release. At that time, shareholders are in line for a A$315 million capital return ($203 million), or A$1 per share.

After Fanatics transfers the remaining $50M from the sale in March, PointsBet shareholders are in line for an extra A$125 million ($81 million) to A$143 million ($92 million), or between A$0.39 and A$0.44 per share.

“Following the sale of the US business, the funding requirements of the company’s remaining assets will be fundamentally different to the status quo,” Chairman Brett Paton said in an address. “Accordingly, PointsBet intends to distribute to shareholders the net sale proceeds (after applicable taxes and transaction costs) together with the majority of the company’s corporate cash reserves that will be surplus to the needs of the remaining business.”

PointsBet US customers declining

PointsBet accounted for 3.22% of the US sports betting market in 2022, according to reports from the dozen states that report revenue by operator. That was seventh-best among all operators, with FanDuel and DraftKings combining for more than 68% of the market.

Both the company’s active customers and handle have dropped so far this year, according to its most recent financial reporting.

Fanatics expansion lags behind CEO forecast

In April, Fanatics CEO Michael Rubin walked back comments about being live in 15-20 states by the start of the NFL betting season, saying between 1215 was more realistic. About a month later, Fanatics outbid DraftKings for PointsBet, which has online betting licenses in 14 states.

In mid-August, Fanatics launched its online sportsbook out of the beta testing phase in four states:

Expanding to more states is not as simple as just taking over PointsBet licenses, however, as regulators in some states have vowed “increased scrutiny” regarding new sportsbooks from corporate buyouts.