In the words of the fictional US Office character Michael Scott, "everybody stay calm, it's happening!"
Indeed, US sports merchandising giant Fanatics is finally making its US play, having announced that its Betting & Gaming division will acquire PointsBet's US operations for $150m. Moelis & Company will be advising on the transaction.
The Australian-based PointsBet had invested heavily in US marketing but in April confirmed it planned to sell its US operations.
Fanatics, meanwhile, had been touted to enter the US sports wagering market for some time.
In fact, Fanatics had previously been linked with a move to buy PointsBet and GI Friday recently speculated as to whether this interest could re-materialize.
Another operator, Kindred Group, looked like a potential candidate after announcing a strategic review of its organization.
But Fanatics has now made its clearest move yet in entering the extremely competitive US sports betting arena. Its market entrance will be a highly anticipated one, due to its business model of using an existing customer database for sports merchandising to convert sports bettors.
As for PointsBet, this is a swift resolution to its desire to exit the North American market (given the decision was only made public last month).
As part of this deal, PointsBet will retain its Australian and Canadian businesses. Unsuprisingly, PointsBet Managing Director and Group CEO Sam Swanell highlighted the high cost of business associated with the US sports betting market.
He explained, “Despite the strategic success building a valuable asset in the US, the costs of operating in a state-by-state environment, together with the requirement to build significant scale to compete against well capitalized operators, led us to explore a number of options.
“The sale of the US Business to Fanatics Betting and Gaming delivers the most attractive risk-adjusted value outcome for shareholders compared to the risks and benefits of other options including the status quo.
“Given Fanatics' significant presence in the US sports market, we consider them to be a natural acquirer of our US Business. I would like to thank Fanatics Betting and Gaming’s CEO Matt King and his team for working with the PointsBet team on the significant amount of constructive diligence that has been done leading to this proposed transaction."
