May 15, 2023
Sports apparel giant Fanatics, the company led by former 76ers minority owner Michael Rubin, is acquiring the U.S. division of Australia's PointsBet to gain access to sports betting markets in at least 15 states, including Pennsylvania, New Jersey, New York, Illinois and Michigan.
The two companies announced the deal Sunday night, saying several steps remain before the deal is closed. The deal is valued at about $150 million, CNBC reported.
Fanatics expects to have sports-betting access in most of the states where PointsBet operates by the start of the NFL season in September. Those states include Louisiana, Colorado, Iowa, Indiana, Kansas, Virginia and West Virginia.
The deal comes after PointsBet forecast an $80 million loss in the second half of this year due to challenging market conditions, including difficulties competing with FanDuel, DraftKings and BetMGM. PointsBet would retain its business in Australia and Canada with the deal.
Fanatics, valued at $31 billion, is the world's largest sports apparel and collectibles company. It entered the sports betting market in January with its first retail sportsbook in Maryland and launched beta versions of its mobile sportsbook in Ohio and Tennessee. PointsBet is the seventh-largest sportsbook in the U.S., where sports betting has been legal since the Supreme Court's landmark decision in 2018.
Fanatics has been on a buying spree lately, acquiring trading card company Topps in January and vintage apparel company Mitchell & Ness a month later. The latter continues to operate as a distinct brand.
On Monday, The Athletic reported Fanatics is expected to leverage its wealth of data on sports fans and use its apparel division as a gateway to market its sportsbook. According to Front Office Sports, the PointsBet deal includes software that will be integrated into the Fanatics betting app.
Rubin, a native of Lafayette Hill, Montgomery County, created the apparel company Global Sports Incorporated in 1998. That company later grew into GSI Commerce, giving Rubin the capital to purchase Florida-based Fanatics from its founders in 2011. Rubin sold GSI to eBay and bought back the sports e-commerce business, calling it Fanatics, Inc. Since then, the company's growth has included acquisitions of Fans Edge and Majestic. Fanatic also has deals with Nike to produce fan gear for both the NFL and MLB.
Rubin stepped down as a limited partner for the 76ers last year, citing possible conflicts of interest connected to the growth of Fanatics.
