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Numerous Australian exports have become part of US pop culture. The “Kath and Kim” television series. AC/DC. Marvel movie fans likely can’t imagine Thor or Wolverine being portrayed by anyone other than native Australians Chris Hemsworth and Hugh Jackman.
To date, PointsBet Casino has not become woven into the fabric of US consciousness to the same extent. A recent development might change that.
Over the weekend, Fanatics and PointsBet agreed to a deal that gives the former the US online gambling operations of the latter. It’s still too early to say for sure how soon that will translate into changes for players in those states. For brick-and-mortar casino operators throughout the US potential timelines remain unclear as well.
PointsBet Casino US should soon become Fanatics property
PointsBet Casino currently operates in Michigan, New Jersey, Pennsylvania and West Virginia. Those licenses will become the property of Fanatics in short order. A statement from PointsBet announced that the company has agreed to part with its US operations for $150 million.
A joint statement from Fanatics Betting & Gaming and PointsBet: pic.twitter.com/4sNAWzUmp5
— PointsBet Communications (@PB_Comms) May 15, 2023
The agreement is still pending ratification by PointsBet’s shareholders. The company is publicly traded on the Sydney, Australia, market. That vote should take place in late June. As PointsBet stated, however, that is just one of several legal matters that still need to take place.
It’s important to note this only affects the US portion of PointsBet’s business. PointsBet will retain its operations in its home country and Canada. This also does not mean PointsBet Casino will discontinue operations in any of its four active US states.
Because of the early nature of the transaction, much of the potential impact on the US online casino landscape is speculative right now. That potential is quite broad.
Fanatics expands its footprint with PointsBet acquisition
For Fanatics, the appeal of PointsBet includes the opportunity to expand the reach of its Betting and Gaming division. Right now, Fanatics has a physical sportsbook in Maryland. It also has plans to take its online sportsbook live not only there but in Massachusetts, Ohio and Tennessee in the short term.
Acquiring PointsBet’s sports betting operations gets Fanatics into 12 other markets, in theory. Fanatics will still have to undergo the licensing process in many of those states. The list includes the desirable markets of Illinois, Michigan, New Jersey, New York and Pennsylvania.
Despite its presence in those markets, PointsBet has struggled in the US in terms of online gambling market share. That’s a big part of the reason why the company has parted with its US operations.
In March in Michigan, for example, PointsBet Casino’s $1.6 million in revenue was the smallest such figure for any of the state’s 15 online casino licensees. Despite the low market share, it was still a single-month record for PointsBet Casino in Michigan.
Fanatics sees the potential of the online casino industry not only now but into the future.
Fanatics plans to build out a proprietary online gambling product
Fanatics understands that even a small share of the USA online casino market is worth its investment. For example, even though PointsBet Casino was technically dead last in the revenue race in Michigan in March, the $1.6 million in revenue still represented almost twice the amount of money that the sportsbook won in Michigan for the month.
Due to its other assets and operations, Fanatics has the capital it needs to ramp up an online casino product, likely integrated into the same app as its online sportsbook. If it can grow its market share in its current four-state footprint, the online casino segment could easily and exponentially surpass the value of the sportsbook. At some point, Fanatics may spin the online casino off into its own product.
If more states legalize real-money online casinos, the opportunity only grows for Fanatics in the future. Potential targets in the near future include Illinois, Indiana, Iowa, and New York. Through the PointsBet acquisition, Fanatics should already be in all of those states via sports betting.
Those decisions will be made on the ground over the coming months, with many people playing a part. Among those are the operators of brick-and-mortar casinos in those states. Fanatics will now have more of a relationship with them as well.
Is a physical Fanatics sportsbook coming to a casino near you?
PointsBet operates physical sportsbooks in several states. In most of those cases, the venues are casinos or off-track-betting parlors. Fanatics will now step into those roles with those facility owners.
The news release mentions that PointsBet will retain its proprietary online gambling platform and other assets. That includes the company’s trademarks. For that reason, it’s likely the physical sportsbooks will rebrand to bear the Fanatics logo and name.
How soon that will take place is anyone’s guess right now. With this move, Fanatics has an opportunity to try to become a force in the US online casino business. If it executes a successful strategy toward that end, Fanatics Casino might eventually become as familiar as “The Crocodile Hunter” to US residents.
