Fanatics Will Purchase PointsBet US Operations, When Will It Come To Michigan?
This past weekend, Fanatics agreed to acquire the U.S. operations of PointsBet for $150 million.
The two companies announced the deal Sunday night.
The transaction is subject to PointsBet shareholder approval and regulatory approvals. The shareholders will vote on the proposed transaction in late June.
As part of the deal, Fanatics gains access to the states where PointsBet is operational. That includes Michigan, which is one of four states to have PointsBet operating an online sportsbook and online casino.
When will Fanatics go live in Michigan?
According to the CNBC report, Fanatics expects to be operating in the majority of states where PointsBet exists by the start of the 2023-24 NFL season.
Fanatics currently has access to four states but has yet to go live anywhere in the United States. They have access to Maryland, Massachusetts, Ohio and Tennessee. With the PointsBet purchase, it will give Fanatics more than a dozen more states to establish its brand in.
“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business,” the companies said in a joint statement. “While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
In order for Fanatics to operate in Michigan, it will have to acquire a gaming license for both its online sportsbook and online casino. With PointsBet already a regulated operated in Michigan, it can continue to operate until Fanatics is ready to launch and regulated.
PointsBet is the online operator for Northern Waters Casino Resort in Watersmeet. That is owned by the Lac Vieux Desert Band of Lake Superior Chippewa Indians.
Attempts to reach Northern Waters for comment on the Fanatics purchase have not been returned as of this writing.
Fanatics has a private valuation of $31 billion. The company has an $8 billion 2023 revenue forecast.
Along with jumping into the iGaming industry, Fanatics owns commerce assets and a sports trading card/memorabilia business. Fanatics acquired Topps for $500 million in 2022.
PointsBet Michigan steady in sports betting, last with online casino
PointsBet has had steady performance in Michigan’s online sportsbook market. The same can’t be said for its online casino performance.
Through March 2023, PointsBet Michigan has amassed $313.7 million in online sports betting handle. That is 3.1% of the state’s sports betting market share. That puts them sixth of Michigan’s 15 operators.
When it comes to online casinos, PointsBet sits last of Michigan’s 15 operators. Its $20.2 million in revenue accounts for just 0.6% of the state’s market share. Overall Michigan has produced nearly $3.2 billion in online casino revenue.
The Australian-based company has forecasted a loss of $77-82 million for the second half of 2023. The company has cited challenging market conditions.
“In view of the US market in which the company has significant operations, the Board has explored and considered a wide range of strategic alternatives over an extended period of time,” PointsBet Chairman Brett Paton said in a release. “Having considered all of the options potentially available to the company, the board believes the Fanatics Betting and Gaming proposal optimizes value for shareholders.”
Fanatics, Pointsbet not first operator switch in Michigan
Fanatics taking over the Pointsbet operations won’t be the first transition we have seen here in Michigan for online gambling in the last year.
Last summer, TwinSpires announced it would stop its online sportsbook and casino operations in early September.
Unlike PointsBet, which is being purchased by Fanatics, TwinSpires was simply ceasing its operations and not selling them off to another company. That forced the Hannahville Indian Community, operators of Island Resort & Casino, to go back on the market.
Despite a multi-month transition, SI Casino has shown promising results early on. In its first full month of operation in March, it generated $2.1 million in revenue, passing the likes of PointsBet and FireKeepers online casino.
Pointsbet crypto scam hits Michigan customers last week
It’s been a rough go for PointsBet as of late.
Its struggles to get off the basement floor of Michigan’s online casinos haven’t been aided by a recent increase in television advertising in the state.
Last Thursday, a scam cryptocurrency promotion email was sent to PointsBet customers. The email was sent by a third-party provider that didn’t have authorization from PointsBet. Despite that, the email looked like an official promotion from the operator.
PointsBet also sent out an email following the incident to assure customers that there was no breach of account management or internal systems.