Fanatics Set to Acquire PointsBet’s U.S.-Based Operations for $150M

About a month after PointBet announced its intent to sell the U.S. portion of the company’s business, a $150 million deal is in place with Fanatics to acquire the sportsbook. The biggest sports apparel and fan memorabilia company in the world, Fanatics takes another step into the sports betting industry, five years after the landmark Supreme Court ruling to legalize sports betting.

The company’s first foray into the gaming universe was no small step either; launching the NFL’s first in-stadium sportsbook at FedEx Field, home of the Washington Commanders. Now, they’re expanding their reach more than tenfold, gaining access to the sports betting market in the 14 states in which PointsBet currently operates.

Why Did PointsBet Sell?

Based out of Australia, PointsBet has faced an uphill battle in the U.S. sports betting market that is largely dominated by the major players in DraftKings, FanDuel and BetMGM. The seventh-largest betting entity at this time, their grasp on the gambling audience simply wasn’t enough for the company to justify the resources required to compete with the rest.

PointsBet didn’t make things easy on itself either, with notoriously unhelpful customer service, frustrating bet limits on its users and questionable marketing tactics. The company found itself mired in a pair of controversies over the past year, faking a lightning strike to retired NFL quarterback Drew Brees in a misguided “Lightning Bets” promotion, and worse, when the book shockingly voided winning bets on the Memphis Grizzlies’ Tyus Jones to record a double-double.

Why Did Fanatics Make the Deal?

A household name among sports fans, Fanatics is logically making a bigger push into the sports betting industry. With their brick-and-mortar book now operating out of FedEx Field, it only makes sense for the company to expand its market share of the gaming industry into as many states as possible. A company with as much recognition as Fanatics gets the advantage of marketing its new offering through an already lucrative merchandise business.

Whereas PointsBet could only compete with other sportsbooks via direct marketing, Fanatics can use their existing products as a vehicle for advertising. The options are endless: banners on the website and a tag on their products, for starters. Buying a jersey for a birthday present? Sign up at the sportsbook during checkout and get a bonus in bets. Just bought a Yankees hat? Here’s a free $5 bet on the Yanks to win the World Series. That pack of trading cards you ordered? Now it comes with a scratch-off card with a random free bet amount.

*Note: these are all hypothetical offers, but if someone at Fanatics sees this, you can have the idea for a small cut!

Reactions to the Deal

Response to the impending deal on social media has been largely critical, with users pointing out that Fanatics itself is not exactly known for its high-quality customer service:

Nothing like a company notorious for bad customer service asking for your betting dollars

— Corey is not a bot (@Corey74566419) May 15, 2023

Others have raised concerns over the acquisition of a U.S.-based sportsbook by a company with ties to Saudi funding, the very same behind the well-known controversial LIV Golf Tour:

Wait, the Saudi PIF-backed Fanatics? https://t.co/NEj04LzlBw pic.twitter.com/Jbnuie4rWi

— Pro Golf Critic (@NotDrJ) May 15, 2023

What This Means for the Industry

Regardless of how you feel about the move, it’s going to change the way businesses view sportsbooks in the United States. With over 60 sportsbooks operating in the country, larger-scale businesses with a piece of the sports entertainment pie will view the smaller books as an enticing new venture and profit stream. With instant access to an existing consumer base, it’s only a matter of time before other companies follow suit.