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Fanatics to buy PointsBet U.S. assets

Fanatics logo is seen on the dugout wall before the game between the Pittsburgh Pirates and the Milwaukee Brewers at PNC Park on July 3, 2022 in Pittsburgh, Pennsylvania. (Photo by Justin Berl/Getty Images)

Justin Berl | Getty Images

Fanatics has agreed to acquire the U.S. operations of PointsBet, marking the sports giant’s first major leap into U.S. sports betting.

The deal is worth about $150 million in cash and will be announced as soon as Sunday night, according to people familiar with the matter who asked not to be named. Fanatics will gain access to at least 15 states with the deal.

Only PointsBet’s U.S. assets are part of the deal, said the people. Fanatics will plan to fund some of the remaining cash flow burn from PointsBet, which has had to spend heavily on marketing to compete with larger rivals DraftKings and FanDuel. PointsBet forecast a loss of between $77 million and $82 million for the second half of the year.

NBC Sports acquired a 4.9% equity stake in PointsBet in 2020.

Fanatics has been in talks with a number of different sports betting companies over the past year as it has plotted its path forward in mobile gambling.

“This is a 10-year journey,” Matt King, the CEO of Fanatics Betting, said at the SBC Conference earlier this month. “We’re going to move very methodically through that 10-year journey. And by doing that and taking that approach, it allows you to be a bit more considered in your decisions. You can kind of move slower, slightly slower today, in order to move fast later.”

Fanatics is a sports platform company with a private valuation of $31 billion. The company has forecast 2023 revenue of $8 billion.

Fanatics owns commerce assets, a sports trading card business, and is building out a sports betting division. The company acquired legendary trading card company Topps for $500 million last year.

Disclosure: NBCUniversal is the parent company of NBC Sports and CNBC.

This story originally appeared on CNBC

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