Fanatics Betting and Gaming Acquire PointsBet Majority Assets in $150 Million Deal

Jessica Aletor Author Pic
By:
Jessica Aletor
18/05/2023/
News
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Highlights

  • PointsBet has reached an agreement with popular sports retailer, Fanatics, to sell its US operations for $150 million.
  • The deal comes days after a cryptocurrency promotional email scam purported to be from PointsBet went viral.
  • Upon completion, the deal allows Fanatics to take control over states where PointsBet casinos and sportsbooks are in operation.

PointsBet is the latest national gambling company to undergo a corporate restructuring in the US as it completed moves to sell its majority shares on Sunday, May 14, 2023. A major sports retailer and betting company, Fanatics Betting and Gaming has acquired the business for a whopping $150 million. Fanatics is worth $31 billion in private revenue and posted a revenue forecast of $8 billion for the end of year 2023.

Once the acquisition gets shareholder approval and fulfills other regulatory requirements, Fanatics will take over the operations of PointsBet in all states where the former company operates a sportsbook or casino.

Fanatics Aims to Take Over Pointsbet Michigan by September

Although both companies have finalized the acquisition agreement, it is not yet over. The $150 million deal still awaits the approval of PointsBet stakeholders and other regulatory agencies. It is expected that stakeholders will take a vote on the deal before the end of June.

Fanatics will have control over PointsBet’s operations in all its states, including Michigan. PointsBet operates both a sportsbook and casino in the Great Lakes State. The PointsBet Sportsbook MI is the online sports betting platform for the Northern Waters Casino Resort, owned by the Lac Vieux Desert Band of Lake Superior Chippewa Indians. Similarly, the casino is managed by the Lac Vieux Desert Band Tribe.

Currently, Fanatics has regulatory licenses to operate online gambling sites in Maryland, Ohio, Tennessee, and Massachusetts. For a smooth operation in Michigan, Fanatics will have to acquire a gaming license from the Michigan Gaming Control Board to operate PointsBet Casino MI and the sportsbook.

Commenting on the acquisition, both companies released the following in an official joint statement:

“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business. While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”

This acquisition is the second restructuring in two years within the Michigan gambling space. Last August, Sports Illustrated took over from TwinSpires after the brand halted casino and sportsbooks operations in Michigan. The SI Sportsbook became operative far back in August. However, the company did not acquire iGaming licenses until February 2023, when it then opened the SI Casino Michigan.

The Hannahville Indian Community, tribal owners of the Island Resort & Casino who currently partner with Sports Illustrated have witnessed a massive spike in revenue over the past two months of operation. In its first full month, the SI Casino Michigan generated $2.1 million in its first full month.

Acquisition Deal Comes Few Days After PointsBet Cryptocurrency Promotion Hit the Michigan Market

he transaction, although massively positive, came against a negative backdrop in the previous week. An email scam made the rounds in Michigan promising a cryptocurrency giveaway in the name of PointsBet Sportsbook. The company initially advised customers not to click on foreign links and later released a statement debunking the giveaway and pausing all emails from its systems.

Many who received the email stated that it came from “PointsBet Customer Relations” and was sent from a PointsBet(.)com domain. However, signs of a phishing scam were still present as the mail had several typos and a shady looking “Urgent” subject line.

It is clear that the email scam had nothing to do with the negotiations for acquisition that were recently completed.

PointsBet’s New Owners Seeking to Consolidate on Its Position as Michigan’s Sixth Largest Sportsbook

Brett Paton, Chairman of PointsBet US had remarked that the company currently faced challenging market conditions. He also believes the sale is a good move for shareholders. In a press release, he was quoted to have said:

“In view of the US market in which the company has significant operations, the Board has explored and considered a wide range of strategic alternatives over an extended period of time. Having considered all of the options potentially available to the company, the board believes the Fanatics Betting and Gaming proposal optimizes value for shareholders.”

PointsBet currently forecasts a loss of up to $82 million in the second half of 2023. It racked up $313.7 million in online betting handle in March 2023 but only $20.2 million in revenue. The Australian company accounts for 3% of Michigan’s sports betting market share but only $0.6% in casino market share. PointsBet has been said to be the sole operator in Michigan with a higher lifetime sportsbook revenue than overall online casino revenue.

Jessica is a news contributor to Gamble Online Michigan. She holds a Bachelor's degree in Economics but has over three years of experience working in the hospitality and gambling industry. Despite her core finance and investment banking background, she has been a casino feature writer for N1 Interactive Limited and multiple gambling affiliate sites. Her work has been featured on the bet365 blog, casino.zone and Max Force Racing. She spends her time between Michigan and California, staying up-to-date on the latest industry developments