PointsBet expects its shareholders to receive between 71 and 73 cents per share for the acquisition. PointsBet shares were trading as high as $12.69 a share in February 2021 – more than 17 times what they were sold for.
Shareholders are getting less than they were getting on the lowest trading day in PointsBet’s history – 97 cents per share on March 15, 2020, when the world was about to shut down due to the pandemic.
Acquiring the PointsBet skin enables them to advance in a much larger unlicensed market. Despite New York’s less-than-friendly tax policies toward sportsbooks, the deal was one of the most important acquisitions for Fanatics.
New York State receives 51% of the profits from sportsbooks. Compare that to 10% in New Jersey or Colorado. Despite being No. 1 in handle and wealth, advertising activity in the state has been reduced.
While there are plenty of professional sports bettors, for example, there are very few professional baccarat or slot machine players.
While Fanatics — last said to be worth $31 billion — and its betting division are in stealth mode, the department now has north of 200 employees and has closed a deal with a software company to handle line-making and player account management.
Sources said that an advertising system has also been set up for the book. Users get 1% back for every dollar bet straight, 3% for parlays and 5% for same game parlays. That “fan cash” can then be used to buy gear from fanatics.
The system is similar to the one used at DraftKings and Caesars – at those books, you can exchange credits for live cash.
PointsBet made a big splash in the US, entering key markets with relative speed. But Pointsbetting didn’t catch on because of its high risk profile and the book was often criticized for its low limits and the railroading of successful gamblers.
“Despite the strategic success of building a valuable asset in the US, the costs of operating in a state-by-state environment, along with the need to build significant scale to compete against well-capitalized operators, led us to explore multiple options,” PointsBet’s managing director and group CEO Sam Swannell said in a statement.
PointsBet signed a deal with NBC that guaranteed it would spend $90 million a year on the network.
The deal, which gave NBC a stake in the business, was recently renegotiated to $58 million a year in ad buys. It signed Drew Brees, who had been an analyst at NBC, for added synergy, but Brees was let go after a year.
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