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DraftKings Tries to Outbid Rival Fanatics In PointsBet Deal

 |  June 18, 2023

Online sportsbook company DraftKings has made a last-minute bid to buy the U.S. business of betting firm PointsBet.

The $195 million offer from the company Friday (June 16) is designed to top a $150 million agreement reached between PointsBet and DraftKings rival Fanatics last month.

“While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s U.S. business,” DraftKings Co-founder and CEO Jason Robins said in a news release. “We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.”

The offer still needs to be reviewed by PointsBet, which said in a letter to shareholders that — subject to its review of the DraftKings bid — it is still recommending they vote for the sale to Fanatics at their meeting later this month.

Fanatics CEO Michael Rubin was blunt in his assessment of DraftKings’ offer.

Read more: DraftKings Has Only One More Month To Bid For UK’s Entain

“We are skeptical of the DraftKings proposal, which seems like a desperate move to slow down Fanatics and PointsBet from completing the deal…,” Rubin said in a widely-quoted statement. “[T]hey are using the majority of their projected year-end cash just to try to block us.”

Last month, Robins said in an earnings report that DraftKings was “on the cusp of achieving profitability” and expects to reach break-even in its second quarter.

Fanatics, meanwhile, was valued at $31 billion late last year, landing it in the top half of the S&P 500.

“Online sportsbooks are set to get even more competitive as more states legalize these platforms and parlay bets increase in popularity,” PYMNTS wrote last month.

When it comes to gaming payouts, PYMNTS research showed that 21% of consumers would rather receive instant payments, making it the most popular option in how customers choose to accept their winnings.

As a DraftKings spokesperson told PYMNTS last year: “Customers want faster payouts. In fact, the speed of payments is so important that it can be a differentiator for customers choosing between gambling operators.”