Fanatics founder and CEO Michael Rubin at his office in downtown New York on December 7, 2022.
The Washington Post | Getty Images
Fanatics’ $150 million purchase of PointsBet’s US operations isn’t the only gaming deal in recent days — and it could be a harbinger of more deals to come.
Fanatics announced on Sunday that it has agreed to buy PointsBet’s US assets, a long-rumored partnership. Fanatics CEO Michael Rubin has previously vowed to operate sports betting in every legal state except New York.
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The acquisition of PointsBet gives Fanatics access to markets in New York as well as 14 other states, importantly its iGaming or online casino gaming business in Michigan.
For Fanatics, the deal really paid off when it came to the upfront licensing fees it would need to pay in NSW.
“By leveraging the PointsBets footprint rather than adopting a new one, we were literally able to save tens of millions of dollars worth of upfront licensing fees,” Fanatics Betting and Gaming CEO Matt King said Monday.
King also said the cost of entering new markets has dropped by 40% to 50% compared with about three to five years ago.
Now compare that to another blockbuster deal in the industry: the $1.2 billion acquisition of new game go through nobleThe deal announced Sunday was priced at $29.50 per share, a 130 percent premium to NeoGames’ closing price on Friday.
Aristocrat is the world leader in eye-catching slot machines. With the acquisition of NeoGames, it announced its intention to compete in online lotteries, casinos and sports betting.
As Jeffries gaming analyst David Katz wrote in a note Sunday night, “(NeoGames), and the digital gaming group as a whole, is undervalued by the U.S. market at current levels.” Higher valuations are not expected in the future.
Just as importantly, according to Katz, recent deals raise the question of “who’s next?”
With M&A chatter dominating gaming conferences, speculation has emerged that global sports data provider SportRadar is a potential takeover target, as well as Gambling.com, an affiliate that provides media content to lure new depositors into gaming. company operator.
Rush Street Interactiveanother frequent target of takeover speculation of late, is trying to showcase its strength as an iGaming operator, followed by sportsbooks.
At the SBC Summit, the top sports betting conference, last week CNBC asked RSI CEO Richard Schwartz if he would accept an offer.
“We have an obligation to our shareholders to achieve the best return possible. As such, we are always open to evaluating opportunities,” he said, before highlighting why RSI is attractive.
Fanatics’ King agrees that more mergers are likely in the future.
“There’s really no new capital coming into this category,” he said. “Anyone that doesn’t have a sustainable business model is going to be an acquisition opportunity.”
But Kim said don’t expect sky-high prices when it comes to game acquisitions.
“I think people’s price expectations have definitely started to reflect reality,” he added.
— CNBC’s Jessica Golden contributed to this report.