DraftKings bids for PointsBet’s US operations with 30% higher proposal price

June 16, 2023
Leer en Español

Though an agreement was reached between PointsBet and Fanatics, terms state it may consider such a 'superior proposal.'

DraftKings has sent a proposal letter to PointsBet’s Non-Executive Chairman, Brett Paton, and Group CEO, Sam Swanell, with an all-cash transaction offer for the acquisition of its US operations, priced at $195m. This offer outshines PointsBet’s current proposal from Fanatics, worth $150m.  

Fanatics made the announcement that its Betting & Gaming division would acquire PointsBet’s US business in May, but this proposal just may complicate that plan. DraftKings CEO and Co-Founder Jason Robins outlined key elements of the indicative offer within a letter to Paton and Swanell.

Robins’ letter reads, “While we understand that PointsBet is currently party to a stock and equity sale agreement with Fanatics Betting and Gaming for the sale of the US business, our indicative offer and the proposed transaction delivers a significant premium to Fanatics’ offer for the US Business, and we believe that your Board of Directors will agree that it constitutes a superior proposal.”

DraftKings has not only raised the potential purchase price by 30%, but also called Fanatics on its ability to “consummate the proposed transaction,” stating that it would act quicker on similar agreement terms.

Fanatics CEO, Michael Rubin, told CNBC,  “It’s a move to delay our ability to enter the market. I guess they are more concerned about us than I would have thought.”

Jason Park, DraftKings’ CFO, commented outside of the letter, “We are excited about the potential synergies available by acquiring PointsBet’s US business, including offering our customers interesting new bet types and accelerating our roadmap of bringing in-house more of our mobile sports betting technology.

"We expect this transaction to increase our adjusted EBITDA potential in 2025 and beyond and not impact our expectations of achieving positive adjusted EBITDA in 2024.”

Along with financing, the letter lays out required approval timelines to closing, internal DraftKings approvals and conditions and further due diligence before signing a definitive agreement. DraftKings reiterates it is “fully committed” to pursuing the transaction before its signature from Robins.

Robins added, “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 US business.”


Product Spotlight

Bragg Gaming Group

Bragg Gaming Group is a global content-driven iGaming technology provider, serving online and land-based gaming operators with its proprietary and exclusive content and cutting-edge technology.

John Connelly - Interblock preparing to launch online by the end of year

John Connelly, the Global CEO of Interblock, joins the Huddle to talk about:
- The company's conversion to the online space
- The performance of ETGs
- Interblock's new philanthropic efforts
- The trend of companies going private
- And more!

Michael Hershman - Dispelling casino 'myths:' New York needs to lose fear of the unknown

Michael Hershman, CEO of the Soloviev Group, joins Tim Poole on the Huddle to put forward his case that the Freedom Plaza is the way to go for one of New York's casino licences. He fields a variety of questions - not shying away from any of them - on why 'myths' about casinos and a fear of the unknown should be dispelled, as well as acknowledging the strength of rival bids and discussing opposition to the project.

As the Tribal gaming sector congregates once more in the Golden State, is it too cliché of me to suggest we are heading for a golden era of Tribal gaming? With the industry set to meet at the Indian Gaming Association t...

From The Top: Will youth be served by Sports Betting?
Two recent interviews in our Huddle podcast revealed to Las Vegas correspondent Brian Joseph just how young sports betting entrepreneurs are becoming.
The Global Gaming Awards: Rewarding Excellence
The 10th edition of the Global Gaming Awards took place in Las Vegas last year. Gaming America looks back... and ahead to this year's.
Preview: Indian Gaming Tradeshow & Convention
Gaming America looks ahead to the 2024 Indian Gaming Tradeshow & Convention and what attendees can expect when they arrive at the Anaheim Convention Centre.
888 and the US Market: A cautionary tale
Gaming America explores the risk of resting on your laurels and the challenge of remaining relevant in a rapidly expanding market.