PointsBet said its shareholders are expected to receive between 71 and 73 cents a share for the acquisition. PointsBet shares traded at their height of $12.69 per share in Feb. 2021 — 17 times higher than what they sold for.
Shareholders are receiving less than they would have on PointsBet’s lowest trading day in its history — 97 cents per share on March 15, 2020, when the world was about to shut down due to the pandemic.
Getting the PointsBet skin enables them to get underway in the biggest market, which had no licenses available. It’s one of the most important acquisitions for Fanatics in this deal, despite New York’s less-than-friendly tax policies against sportsbooks.
New York takes 51% of all profits from sportsbooks in the state. Compare that to 10% in New Jersey or Colorado. It’s resulted in reduced promotional activity in the state despite its No. 1 rank in handle and wealth.
While there are plenty of professional sports bettors, for instance, there are far, far fewer professional baccarat or slot machine players.
Although Fanatics — last said to be worth $31 billion — and its betting division have been in stealth mode, the department now has north of 200 employees and has completed a deal with a software company to manage line-making and player account management.
The book even has a promotional system set up, sources said. Users will receive 1% back for every dollar wagered on straight bets, 3% for parlays and 5% for same game parlays. That “Fan Cash” can then be used to buy gear on Fanatics.
The system is akin to ones used at DraftKings and Caesars — although at those books, you can exchange credits for straight cash.
PointsBet made a big splash in the U.S., getting into the important markets with relative speed. But Pointsbetting didn’t catch on because of its high risk profile and the book was oft-criticized for its low limits and rail roading of successful gamblers.
“Despite the strategic success building a valuable asset in the US, the costs of operating in a state-by-state environment, together with the requirement to build significant scale to compete against well capitalized operators, led us to explore a number of options,” said PointsBet’s managing director and group CEO Sam Swanell, in a statement.
PointsBet signed a deal with NBC that guaranteed that it would spend $90 million a year on the network.
The deal, which gave NBC an equity stake in the business, was recently renegotiated down to $58 million a year in ad buy. It also signed Drew Brees, who was an analyst on NBC, for extra synergy, but Brees was let go after only one year.
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May 15, 2023 at 10:20AM
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Fanatics Acquires PointsBet's U.S. Business, Marking Its Official Foray Into Sports Betting - The Action Network
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