How Fanatics Ohio Should Benefit From PointsBet Acquisition 

Written By Mike Breen on May 16, 2023
Fanatics Sportsbook Ohio

Sports merchandising company Fanatics could streamline its entry into the U.S. sports betting market with the announcement that it is buying the U.S. operations of Australia-based PointsBet, which currently operates its online sportsbook in 14 states, including Ohio.

PointsBet and Fanatics issued a joint statement announcing the agreement on May 14. Fanatics will pay $150 million for PointsBet’s U.S. assets, pending approval by regulators and PointsBet shareholders, who will meet to vote on the proposed deal in late June.

If approved, the deal could help Fanatics gain sports betting market access in over a dozen states in which PointsBet Sportsbook is currently up and running.

That includes the Ohio sports betting market, though Fanatics already has market access in the state. Ohio granted Fanatics a license to operate an online sportsbook in November, just a couple of months prior to the statewide launch of legal sports betting on Jan. 1.

Still, the deal would mean Fanatics could have PointsBet Sportsbook’s built-in user base when its sportsbook officially launches in Ohio.

Deal could give Fanatics access to 12 additional states

Fanatics had yet to broadly launch its sports betting product in any market, though the app was made available to select customers on May 1 after beta-testing the Fanatics Sportsbook app in Ohio and Tennessee. The company planned to slowly roll out Fanatics Sportsbook Ohio to current customers in its e-commerce business’ database of 95 million people.

Besides Ohio and Tennessee, Fanatics was approved to launch its online sportsbook in Massachusetts and Maryland.

In April at the 2023 CAA World Congress of Sports, Fanatics CEO Michael Rubin said that he hoped to have Fanatics Sportsbook available in 12 to 15 states by the start of the NFL season in September.

There had been rumors in the past year that Fanatics was looking to purchase a sportsbook entity with established access to states’ sports betting markets. With Fanatics Sportsbook only licensed in four states, some speculated that such an acquisition would be one way the company could meet Rubin’s goal.

That appears to be just what happened with the PointsBet acquisition. Pending approval, including states it had previously received licensing approval, Fanatics could potentially have sports betting market access in 16 states.

PointsBet Sportsbook is currently licensed to operate in 14 states:

  • Ohio
  • Maryland
  • Colorado
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Louisiana
  • Michigan
  • New Jersey
  • New York
  • Pennsylvania
  • West Virginia
  • Virginia

High cost, sportsbook competition cited for reasons for sale

It’s unclear when the deal will be finalized, but in a press release PointsBet said it would continue to operate its sportsbook app as it is until final closing, at which point Fanatics would take over. Presumably, Fanatics would then transfer Ohio PointsBet Sportsbook users’ accounts to its platform, which could integrate some of PointsBet’s technology.

In a press release, PointsBet said Fanatics would be buying its U.S. “sports wagering, advanced-deposit wagering and iGaming operations,” as well gambling tech from Banach Technology (which PointsBet acquired two years ago for $43 million) and “a copy of the software for, and a license to use, (PointsBet’s) proprietary technology Platform.” PointsBet will retain its operations in Canada and Australia.

PointsBet Managing Director and Group CEO Sam Swanell said in the press release that, although PointsBet was experiencing success since launching in the United States, the company was looking to sell due to the high costs of competing in the U.S. sports betting market.

“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,” Swanell said.

“The sale of the U.S. 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.”

PointsBet in Top 10 of Ohio sportsbook market share

PointsBet says it is the seventh-largest online sports betting operator in the U.S. out of more than 60 licensed operators.

PointsBet is known for its fast, user-friendly app. It also offers its unique PointsBetting option, in which the bettors’ win or loss amount is based on the margin of victory (or of loss). In PointBetting, if your bet wins by two points, for example, you win two times your bet amount. But if your bet losses by, say, five points, you lose five times your bet amount.

In Ohio’s first three months of sports betting, PointsBet Sportsbook ranked ninth in the state each month in terms of total handle. There are currently 17 online sportsbooks operating in Ohio.

In January, PointsBet had $1.2 million in revenue and accounted for 0.7% of the total market share in the state.

In February, PointsBet had 0.8% of the market share in Ohio and just over $542,000 in revenue. March saw PointsBet’s market share stay about the same, with revenue of nearly $654,000.

By comparison, PointsBet Sportsbook launched in Michigan in January 2021, just as legalized sports betting went live in the state. PointsBet now accounts for 3.1% of Michigan’s sports betting market share, which puts them sixth out of the state’s 15 sportsbook operators, according to PlayMichigan.

PlayIllinois, meanwhile, says that if Fanatics were to take over PointsBet in Illinois it would instantly become the fourth-largest sportsbook in the state, behind just DraftKings, FanDuel and BetRivers.

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Mike Breen

Mike Breen covers Ohio’s budding sports betting industry for PlayOhio, focusing on online sportsbooks and the state’s responsible gambling initiatives. He has over two decades of experience covering sports, news, music, arts and culture in Ohio.

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