In a move that sent shockwaves through the sports betting industry, DraftKings has thrown its hat into the ring to acquire the US portion of PointsBet. The offer is 30% higher than Fanatics' bid, which was $150 million in the middle of May.
Though most considered the deal between PointsBet and Fanatics complete, there is a clause in the agreement that allows PointsBet to mull over "superior proposals".
Does DraftKings really want to acquire PointsBet, or is this just the ultimate blocking move? We'll dive into all of the details in this post.
As you might imagine, several Fanatics executives weren't happy with this news. Fanatics CEO Michael Rubin has sounded off in a few statements, calling the DraftKings proposal "a move to delay our ability to enter the market." The timing of the DraftKings offer makes plenty of folks agree with Rubin.
Fanatics Sportsbook is currently doing some beta testing with its app in four states: Ohio, Tennessee, Maryland, and Massachusetts. The reviews for Fanatics have been positive so far, with lots of folks commenting about how easy the app is to navigate.
DraftKings may have offered $45 million more than Fanatics, but more cash isn't the only reason that PointsBet is mulling over the proposal. DraftKings pointed out in its offer that they believe they are "more uniquely positioned to obtain the requisite regulatory approvals on a more expedient timeframe."
In Lehman's terms, DraftKings has told PointsBet that they can get a deal done much faster than PointsBet. This would allow PointsBet to get cash back in their shareholders' hands more quickly.
DraftKings also stated that they could have a firm agreement in place with PointsBet within three weeks. Keep in mind that both of the proposals that PointsBet has received are for their US operations only. PointsBet would be able to keep doing business in Canada and its home country of Australia.
Both DraftKings and Fanatics would benefit from obtaining PointBet's mobile sports betting technology. Aside from that, though, we speculate that these two companies have very different reasons for wanting PointsBet US.
Fanatics is an international conglomerate, but they're new to the sports betting industry and trying desperately to garner access to more markets. A deal with PointsBet would give Fanatics access to at least 15 states. This would put them on the fast track to being a big fish in the sportsbook industry.
DraftKings is arguably the most popular sportsbook and DFS site in the US. Their sportsbook is available in 20 states, and the company is publicly traded on the NASDAQ with symbol DKNG. DraftKings would love to be able to offer even more unique bet types to their expansive client base by acquiring PointsBet US.
So, where do we go from here? The smart money says that Fanatics will probably up the ante with its offer. Stay tuned!