There are still some hurdles, though, for DraftKings.

A person close to the company said some of those expected costs could be spread out annually and said DraftKings still expects a return on the deal despite anticipated additional spending. Rubin estimated that between the offer price of $195 million, a preexisting financial commitment to NBC upward of $250 million, and losses and liabilities at PointsBet, DraftKings could assume as much as $500 million in costs to close the deal.Īccording to Rubin, DraftKings would be allocating significant cash 'just to try to block us.'ĭraftKings' Robins declined to comment on those specific numbers but acknowledged Fanatics would have a head start on assessing costs through its own purchase process. 'I guess they are more concerned about us than I would have thought.' 'It's a move to delay our ability to enter the market,' Rubin said. The deal with Fanatics would have given the company access to at least 15 states where PointsBet already operates.įanatics CEO Michael Rubin told CNBC after the DraftKings announcement that he's highly skeptical of the deal, which he views as DraftKings attempting to slow Fanatics down. If the deal moves forward, it would be a major blow to Fanatics' sports betting efforts, as the company was looking to expand its reach ahead of the NFL season. Joseph Stauff, analyst at Susquehanna International Group, said the DraftKings bid 'underscores the cheap valuation implied by Fanatics' $150m bid and seems to suggest there's likely to be some bidding competition. The company previously forecast a loss of between $77 million and $82 million for the second half of the year.

PointsBet is the seventh-largest sports betting operator in the U.S., but it's rapidly been shedding cash. 'We do not expect this to have any impact on the path to profitability,' he added. Robins told CNBC that while the deal wouldn't be transformative for DraftKings, it would allow the company to grow market share. 'We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.'ĭraftKings, which is publicly traded, has a market cap of about $10 billion. business,' said DraftKings CEO Jason Robins in a statement. 'While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet's U.S.

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