In a shocking flip of occasions, DraftKings Inc. introduced on June 28 that it’ll now not pursue the acquisition of the US enterprise of PointsBet Holdings Ltd. DraftKings expressed its gratitude to PointsBet for his or her time and cooperation throughout the course of.
DraftKings’ Failed Try to Purchase PointsBet Paves the Means for Fanatics
The collapse of DraftKings’ try to purchase PointsBet has opened the door for one more distinguished participant within the trade. Fanatics, a well known sports activities merchandise retailer, is now set to turn into the brand new proprietor of PointsBet’s American arm. Fanatics had initially agreed to a deal price roughly $150 million to amass PointsBet. Nonetheless, in response to DraftKings’ last-minute bid, the provide was elevated to $225 million.
This isn’t the primary time DraftKings has withdrawn from a serious deal. In 2021, the corporate cancelled its proposed $22 billion acquisition of Entain, the proprietor of Ladbrokes, as a consequence of regulatory considerations. Evidently comparable considerations could have performed a job within the collapse of the PointsBet deal.
DraftKings’ bid, which was non-binding, required finalization from each events. Though negotiations occurred between PointsBet and DraftKings, they have been unable to succeed in a binding settlement earlier than the deadline expired. It seems that DraftKings’ motive behind the bid was to stop a competitor with deep pockets, equivalent to Fanatics, from getting into its territory. Nonetheless, rumors additionally circulated that the bid might need been fueled by private motives stemming from failed merger negotiations between DraftKings CEO Jason Robins and Fanatics CEO Michael Rubin in 2021.
Fanatics Poised to Disrupt Sports activities Betting Market, Threatening DraftKings and FanDuel Dominance
Business consultants have speculated concerning the significance of Fanatics’ entry into the sports activities betting market. With substantial sources for product improvement and advertising and marketing, backed by an enormous buyer database, Fanatics is anticipated to pose a big problem to main trade giants like DraftKings and FanDuel. Analysts consider that Fanatics may rapidly seize a big share of the market as soon as its sportsbook launches earlier than the 2023 NFL season.
PointsBet shareholders are scheduled to vote on June 30 to approve Fanatics’ bid. If authorised, Fanatics will acquire entry to ready-made sports activities betting licenses in a number of key states, together with New York, Michigan, and New Jersey. These states provide profitable alternatives for progress as a consequence of their massive markets and the potential for iGaming growth. Whereas Fanatics’ new provide of $225 million is comparatively modest contemplating the corporate’s valuation of $31 billion, the actual worth lies within the acquisition of sports activities betting licenses in key states. With out buying current licensees, Fanatics would have confronted challenges getting into the New York, Michigan, and New Jersey markets, that are among the many largest within the nation.
