There has been a $195 million bid by DraftKings to acquire PointsBet's U.S. assets, which is 30% higher than the previous offer from Fanatic. This may come as a desperate attempt by DraftKings to slow down the deal between Fanatic and PointBets as DraftKings has to pay a premium of 30%. Nevertheless, if DraftKings receives regulatory approval and completes the transaction, it will fundamentally undermine Fanatics' effort to expand sports betting in the 15 states where PointsBet does business. Through licencing, PointsBet’s "points betting" product and Banach risk and trading platform are added to DraftKings, giving it access to some distinctive technology.
There are possible synergies that could be achieved by purchasing PointsBet's U.S. operations, such as providing our consumers with intriguing new bet kinds and hastening the process of bringing more of our mobile sports betting technology in-house. In their letter to PointsBet, DraftKings emphasised the investment case for the transaction which are improving its product, expanding its internal capabilities, and providing "considerable synergies." Hence, DraftKings can drive sustainable organic revenue growth in the United States.
In spite of some concerns that customers might be cutting back, the DraftKings-PointsBet partnership was announced as fresh data showed that Q2 sports betting patterns are healthy. Notably, for the states that have reported, U.S. sports betting handle has exceeded projections for April and May, and Q2 gross gaming revenue predictions have been increased to over $2B. The profitability has benefited from increased sector-wide promotional spending, lower overall marketing expenses, and a switch to more effective national advertising, according to analysts.
Most importantly, management of DraftKings anticipates that the deal will boost the company's potential for positive adjusted EBITDA in 2025 while having no negative impact on those projections for 2024.
The question is whether PointBets would choose Draftkings over Fanatics.
https://igamingbusiness.com/strategy/ma/draftkings-enters-race-to-acquire-pointsbet-us/
[link] [comments] https://www.reddit.com/r/stocks/comments/14jacqx/is_draftkings_on_point/
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