No deal is done until it’s signed on the dotted line.
With PointsBet seemingly on the verge of selling its US assets over to Fanatics, DraftKings has come in with a last-minute offer to try and acquire said assets.
On Monday, PointsBet announced it would explore the offer from DraftKings, meaning it could become a reality.
Should DraftKings steal the deal from Fanatics, it would give the online gambling operator control of three different Michigan online casinos and online sportsbooks.
DraftKings offers $45 million more than Fanatics for PointsBet
DraftKings has offered $195 million to purchase PointsBet’s US assets.
Last month, Fanatics and PointsBet came out publicly and announced an agreement for Fanatics to take over the US assets.
The agreement between the two was for $150 million. However, it was subject to shareholder approval which is scheduled to come on June 30.
With the vote yet to take place, DraftKings Casino decided to throw its hat into the ring.
PointsBet sent out a release on Monday stating that DraftKings made a debt-free and cash-free offer with no financing condition.
The gambling operator stated:
Acting in good faith, (PointsBet) have determined (after consultation with the Company’s financial and legal advisers) that the DraftKings Proposal could reasonably be expected to lead to a Superior Proposal (as that term is summarised in the Company’s ASX release dated 26 May 2023), and, to this end, PointsBet (with the assistance of its financial and legal advisers), will now engage with DraftKings on the DraftKings Proposal.
The consideration doesn’t constitute a binding offer or commitment.
The PointsBet board continues to recommend to its shareholders to vote in favor of the deal with Fanatics, for now.
DraftKings could own 20% of Michigan online gambling market
If DraftKings is able to secure a deal with PointsBet, that would give DK control of three of the 15 online operators in the state.
Aside from its own DraftKings operation, DK completed acquisition of Golden Nugget’s online properties in May of 2022.
With Golden Nugget Online Gaming under its umbrella, DraftKings has able to integrate its own technology to both sites and allow for promotions to run across both brands.
If DraftKings was able to acquire PointsBet’s US assets, it would hold nearly 22% of the lifetime market share in Michigan online casino revenue.
- DraftKings: 16.4% ($572.6 million)
- Golden Nugget: 4.5% ($157.5 million)
- PointsBet: 0.6% ($22.9 million)
DraftKings would also hold over 29% of the lifetime market share in Michigan online sports betting handle.
- DraftKings: 25.6% ($2.57 billion)
- PointsBet: 3.3% ($327.4 million)
- Golden Nugget: 0.3% ($29.1 million)
What’s next for DraftKings and PointsBet?
Along with the press release from PointsBet announcing the consideration of DraftKings’ offer, it also spelled out what’s next for the two to complete a deal.
PointsBet has set a June 27 deadline for DraftKings to provide a firm offer. That’s three days before the PointsBet shareholders would hold a vote on the Fanatics offer.
Due to the timing of the offer, PointsBet also pointed out that it will hold DraftKings to a “hell or high water” provision.
In light of the anticipated heightened scrutiny of an acquisition of PointsBet by DraftKings, as compared to the FBG Transaction, please provide written confirmation that DraftKings will assume the risk of delay and/or denial of antitrust approvals, as we intend to hold DraftKings to a “hell or high water” standard with respect to antitrust clearances.
While the future of PointsBet’s US assets now has been somewhat muddied, the eventual outcome should become more clear over the final 11 days of June.
