DraftKings Makes $195M Offer to Buy PointsBet’s U.S. Sports Betting Business

DraftKings Makes $195M Offer to Buy PointsBet’s U.S. Sports Betting Business Pleas Subscribe For Daily Sports Betting News

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One of America’s largest legal sports betting operators is looking to make an acquisition. DraftKings has submitted an offer to acquire PointsBet ’s U.S. business in a $195 million all-cash deal. The proposal by DraftKings comes after Australia-based PointsBet — the seventh-largest online sports betting operator in America — agreed to a deal with Fanatics to sell its U.S. assets for $150 million. DraftKings’ offer will now cause PointsBet to weigh its options regarding a sale. Prior to DraftKings’ bid, New York gaming regulators had been reviewing Fanatics’ offer.
Promising venture
PointsBet presents a unique opportunity for both Fanatics and...

One of America’s largest legal sports betting operators is looking to make an acquisition. DraftKings has submitted an offer to acquire PointsBet ’s U.S. business in a $195 million all-cash deal. The proposal by DraftKings comes after Australia-based PointsBet — the seventh-largest online sports betting operator in America — agreed to a deal with Fanatics to sell its U.S. assets for $150 million. DraftKings’ offer will now cause PointsBet to weigh its options regarding a sale. Prior to DraftKings’ bid, New York gaming regulators had been reviewing Fanatics’ offer.
Promising venture
PointsBet presents a unique opportunity for both Fanatics and DraftKings. The Australian company has online betting sites in 14 states across the U.S., including Colorado, Illinois, Michigan, Ohio, Pennsylvania, and New York — the largest online betting market in America.
Fanatics, which launched wagering operations in January 2023, failed to obtain an online sports betting license in New York after submitting a joint bid with Penn National Gaming and Kambi.
On the other hand, DraftKings could expand its reach even further with the acquisition of PointsBet’s customers. The Boston-based company is also able to hinder Fanatics’ growth as a sportsbook with the purchase of PointsBet’s U.S. business in a competitive betting market.
PointsBet’s U.S. assets have shown signs of growth despite heavy marketing efforts. The company generated $120 million in revenue for the six months ending December 31, 2022, a 28% increase year-over-year. PointsBet reported a total sports betting handle of $2.2 billion in H1 FY2023, compared to $1.6 billion for the same period last year. Despite the uptick, PointsBet reported a net loss after tax of $110 million in H1 FY2023 — a 19% increase year-over-year.
Purchasing power
DraftKings’ offer to purchase PointsBet’s assets comes after encouraging results in Q1 2023. The sportsbook, which offers wagering in Ontario and 23 states in the U.S., generated $770 million in revenue during the quarter — an 84% increase year-over-year. DraftKings reported a monthly average of 2.8 million unique paying customers in Q1 2023, a 39% uptick compared to Q1 2022.
The company is still seeking profitability despite the encouraging results. DraftKings reported a net loss of $397.1 million in Q1 2023, compared to a loss of $467.6 million in Q1 2022. Total cash and cash equivalents reached $1.5 billion in Q1 2023, down from $2.2 billion in Q1 2022.
DraftKings’ potential purchase of PointsBet’s U.S. business adds to a growing list of activations the company is using to acquire more customers. In March, the company debuted DK Horse — a standalone horse racing app that is accessible in more than 10 states. The DraftKings has also launched DK Network — a video streaming service that aims to compete with FanDuel+.
Fanatics has a difficult task in competing with DraftKings’ offerings as PointsBet decides who to do business with. As the pending sale looms, other sportsbooks may submit offers of their own. This article originally appeared on Covers.com, read the full article here
Source: https://www.covers.com/industry/draftkings-makes-offer-buy-pointsbet-us-sports-betting-business-june-16-2023