DraftKings and Fanatics are engaged in a bidding war to buy the US assets of the PointsBet online sportsbook. While Fanatics are still considered to be the brand most likely to take over PointsBet’s foothold in the US, DraftKings recently made a higher bid that outstripped that of its rival.
Fanatics is desperate to enter the lucrative sports betting market in the US and saw the purchase of PointsBet as a cost-effective way of doing it. This is because Fanatics would take over the licensing that PointsBet already has to operate in states of Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia.
For a while, it looked increasingly likely that Fanatics would purchase PointsBet and the Australian sportsbook seemed ready to approve the offer of $150 million. However, DraftKings has put in a last minute offer of $195 million that will now be explored further by the board at PointsBet.
Such an aggressive move has already had a positive effect on the PointsBet stock price, although the Australian brand has made tentative steps to engage further with the DraftKings bosses. This will be done in a bid to appease the increased scrutiny that a purchase by a heavyweight brand such as DraftKings would bring.
Prior to the DraftKings bid, the majority of PointsBet shareholders had made public their recommendations for accepting the offer from Fanatics. However, with DraftKings now backing their interest with a big money bid, it could complicate matters for Fanatics to make a hoped-for simple entry into the US betting landscape.
Fanatics has made no secret of its bid to enter the sports betting realm. The company has already proven to be a massive success in the apparel business, and made its first steps into the betting domain with the purchase of the Amelco source code. This would be used to power its betting platform, and the next step would be to access the market.
With PointsBet struggling for market share, Fanatics bosses had seen the purchase of the Australian sportsbook’s US assets as a way of saving money on the licensing fees that PointsBet had previously paid.
PointsBet initially made some aggressive moves in the fledgling US sports betting market when it launched in 2018. But while the brand had proven to be a big success in Australia, it found it hard to compete with larger sportsbooks such as FanDuel and DraftKings who already enjoyed brand visibility while being backed with greater capital.
As such, the PointsBet bosses seem to be ready to cut their losses and accept an offer for a purchase of its assets. The current plan is that an offer is likely to be accepted over the next three weeks, but this will all depend on how the negotiations between PointsBet and DraftKings go. But with Fanatic still the favorite to deal the deal, it looks like US sports fans could soon be welcoming a brand new online sportsbook.
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