US fantasy sports and betting provider DraftKings has today (June 16) announced that it has made a $195-million bid for the US arm of Australia-based international online bookmaker PointsBet.

The unsolicited all-cash bid is for $45 million more than the deal digital sports platform and e-commerce giant Fanatics has already agreed with PointsBet.

That agreement, announced on May 14, is worth $150 million and would give Fanatics its first significant move into the US sports betting space.

However, it has not yet been approved by PointsBet’s shareholders, who were due to vote on the Fanatics deal on June 30.

Fanatics chief exec Michael Rubin has dismissed the DraftKings bid as an attempt to slow down the takeover by his company, for which a failed attempt now would be a major setback in its efforts to enter the US betting market.

PointsBet is continuing to recommend the Fanatics offer until the DraftKings offer has been reviewed.

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By GlobalData

Its US business has struggled financially in recent months and has forecast a loss of between $77 million and $82 million for the second half of the year.

In a statement, it said: “The directors of PointsBet are committed to acting in the best interest of all shareholders and are considering the DraftKings proposal alongside its advisers subject to the outcome of the review being undertaken of the DraftKings proposal, the board continues to recommend that shareholders vote in favor of the (Fanatics) transaction.”

Rubin commented: “We are skeptical of the DraftKings proposal, which seems like a desperate move to slow down Fanatics and PointsBet from completing a deal. The purchase price and other financial commitments will total more than $500 million – so they are using the majority of their projected year-end cash just to try to block us.”

DraftKings put forward the indicative offer to the non-executive chair and chief executive of PointsBet Holdings, noting that it represents a 30% premium compared to PointsBet’s agreement with Fanatics.

In the letter, it said the structure of its offer would be “substantially consistent” with that of Fanatics and that it “would be in the best interests of PointsBet and its shareholders and other stakeholders.”

DraftKings added that, from its own perspective, it was “uniquely positioned” to make the superior offer due to the synergies it sees with PointsBet’s US business. It said the acquisition would allow it to enhance its existing product with additional functionality, improve in-house capabilities thereby reducing costs, and deliver synergies through “improved customer acquisition and monetization, marketing efficiencies, and fixed cost rationalization.”

DraftKings does not suggest that the acquisition would deliver an immediate improvement in its bottom line, with its co-founder and chief executive Jason Robins telling CNBC it would more readily allow the company to grow market share. Indeed, DraftKings already operates in many of the same US states as PointsBet.

Robins said in DraftKings’ announcement: “While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s US business. We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.”

Jason Park, chief financial officer at DraftKings, added: “We expect this transaction to increase our Adjusted EBITDA potential in 2025 and beyond and not impact our expectations of achieving positive Adjusted EBITDA in 2024.

“We are excited about the potential synergies available by acquiring PointsBet’s US business, including offering our customers interesting new bet types and accelerating our roadmap of bringing in-house more of our mobile sports betting technology.”

The US sports betting market continues to undergo major maturation after the country's Supreme Court ruled in 2018 that states should have the right to legislate on the activity.