In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about Fanatics' purchase of sports book PointsBet and the possible implications and trends from the deal.
You can read the full column below.
Fanatics’ deal to purchase PointsBet has the potential to be an industry game changer. For the most part, sports betting companies and sports books have been kept separate from apparel or media companies. There is now and has been since the Murphy decision in 2018 to consolidate industries.
Fanatics is an apparel company that has significant involvement in collectibles and gaming (e.g., trading cards, NFTs, and iGaming). Fanatics is also a manufacturer and distributor for other companies on uniforms for professional sports leagues. Essentially, Fanatics serves as a supplier for other brands, but with other brand names on their products.
PointsBet is a Colorado-based sports book and online casino platform. PointsBet operates in fourteen states currently, although their business is strategy is to operate in all states where sports betting is legalized and potentially even globally-focused. PointsBet at one point had sports sponsorship with the University of Colorado at Boulder, which was discontinued in March 2023 because of the potential and look and feel of impropriety between a university and a sports book.
With over half of the United States legislatures passing or already having some form of legalized gambling post-Murphy, Fanatics is looking to capitalize on the connection between sports, betting on sports, and playing sports. Specifically, the fans who bet on sports are more likely to watch sports and in turn purchase sports apparel for their favorites teams and players. Fanatics is also looking to diversify its business interests so that it can compete beyond apparel. For example, it is highly unlikely at this point that Nike or Adidas would buy a sports betting company. It also helps that Fanatics is not individually focused on athletes, but leagues as apparel providers so that the athletes who are playing do not receive compensation from a betting company. Again, impropriety issues. One question to consider is whether a professional sports league like Major League Baseball would allow a sports betting company to sponsor a patch on a jersey. It is one step closer now with Fanatics.
Fanatics did have to pay millions of dollars more ($225 million total) when DraftKings made an unsolicited offer for PointsBet, but ultimately Fanatics paid an increased fee and a seemingly fair price to now have presence in fourteen states for sports betting and other collectibles interests.
About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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