Fanatics to acquire U.S. business of PointsBet as it aims to grow sports betting operation

The deal between Fanatics and PointsBet is for about $150 million and gives Fanatics more markets to grow its sports betting footprint.

Michael Rubin's Fanatics is synonymous with sports apparel. He wants it to be synonymous with sports betting.Read moreJoe Carrotta / The Washington Post

by Jeff Neiburg

Published May 15, 2023, 9:01 a.m. ET

Fanatics, the world’s largest sports apparel and collectibles company, has entered into an agreement to purchase the U.S. business of Australian-based PointsBet for $150 million, the companies announced Sunday night.

“While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome,” they said in a joint statement. Updates will be provided “in the coming weeks.”

The move comes as Fanatics, which is led by former minority Sixers owner Michael Rubin, recently entered the sports betting market in earnest. The company, which has offices in Conshohocken, launched a sportsbook at FedEx Field, the home of the Washington Commanders. It also recently launched a beta product of its mobile sportsbook in Tennessee and Ohio.

Acquiring PointsBet allows Fanatics a route into multiple major markets, including Pennsylvania and New Jersey. Fanatics had recently applied for a sports betting license in New York but did not receive one. But because PointsBet is in New York, Fanatics now has a lane into one of the largest markets.

PointsBet is operational in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, West Virginia, and Virginia.

It’s unclear when the Fanatics product will be available in these new markets. The deal, as the companies indicated, is not yet finalized. PointsBet said in an announcement that its shareholders will vote on the transaction in late June.

Fanatics sports betting lead Matt King, former FanDuel CEO, said last week at the SBC Summit North America conference in Secaucus, N.J., that the company is focused on “sustainable scalability.”

King said Fanatics is aiming to deliver a user experience and rewards program that other operators can’t match.

Fanatics, believed to be valued at around $31 billion, has a mailing list of about 95 million sports fans that can be reached at almost no cost. King talked at the conference about integrating merchandise and collectible rewards programs with the company’s sportsbook (think earning points for merchandise when depositing into the sportsbook).

Rubin, who grew up in Lafayette Hill, sold his ownership stake in Harris Blitzer Sports & Entertainment last year, citing potential conflicts of interest — Fanatics’ sports betting business likely being at the top of that list.

The big question for the sportsbook and iGaming arm of Fanatics moving forward is how much it can cut into the market share being dominated by FanDuel and DraftKings.

In Pennsylvania, PointsBet was ninth in total sportsbook handle (the amount of money wagered) for the month of March. The $11,998,397 bet through PointsBet in March represented just 1.7% of the market in Pennsylvania, where FanDuel (39%) and DraftKings (26%) make up a majority of the state’s monthly handle.