Potential Bidders for Bet365 May Find themselves Outmatched by DraftKings' Contenders
Unveiling Prospects: DraftKings Eyeing Bet365 Acquisition?
Published on: May 5, 2025, 03:32h.Last updated on: May 5, 2025, 03:32h.
Todd Shriber @etfgodfatherFinancial Gaming NewsMergers and Acquisitions
With whispers echoing through the gaming realm, could Bet365 be exploring a blockbuster move? Rumors swirl that the gaming titan may be in contemplation of a full or partial sale, or even eyeing an initial public offering (IPO), but potential buyers appear thin on the ground for now. Could DraftKings (NASDAQ: DKNG) be the One to swoop in?
It must be noted that neither Bet365 nor DraftKings has voiced their thoughts on such speculations, and there seems to be uncertainty if the two have been in any communication thus far. Nuggets of information were dropped last week as indications emerged that the Coates family, Bet365's ruling hand, reportedly had discussions with Wall Street banks on various prospects regarding the UK-based sportsbook powerhouse. These possibilities include a sale, which would enable the family to offload their interests in the company, or an offering of shares in New York.
According to the Sunday Times, other UK betting firms, Entain and FanDuel's parent company Flutter Entertainment (NYSE: FLUT), are unlikely to wade into the fray as both could face regulatory issues, specifically antitrust concerns, and a substantial overlap between Bet365's European operations and their own.
As the sports betting landscape becomes more intricately woven, DraftKings emerges as the most conceivable contender from the gaming sector to thrust itself into this dance, according to the Sunday Times.
DraftKings: The Potential White Knight?
Savvy deal-makers might wonder– could Bet365 command a $12 billion valuation if sold outright? Based on DraftKings' current market cap of $17.12 billion, the Boston-based operator seems capable of making a bid, though such a move could reportedly take the shape of an equity-heavy offering, with a relatively meager cash component.
If a deal materializes– a tantalizing possibility, yet without guarantees – the Coates family could find their fortune augmented due to their shares potentially rising in value. However, there's an element of risk involved as insiders at DraftKings seemingly tend to sell off their shares[3], and the stock has dipped 18.52% over the past year.
As for DraftKings casting its sights on a UK company, it's not unprecedented. In 2021, the operator proposed a $22.4 billion cash-and-equity bid for Entain[2]. Some analysts believe this move was a strategic move to deter MGM Resorts International (NYSE: MGM) from gaining complete control of BetMGM.
Private Equity: The Dark Horse Contenders?
Duke it out with the big boys, perhaps? Given their long-standing ties to the gaming industry, private equity powerhouses Apollo Global Management, CVC Capital, and Blackstone could all be shrewd suitors for Bet365[1]. As of yet, none of these financial titans have come forth with official expressions of interest in acquiring the gaming juggernaut.
All three private equity titans could captivate the Coates family with generous, upfront cash offers instead of relying on DraftKings' comparatively smaller coffers. What's more, private equity firms offer the flexibility of buying Bet365 outright or part of the business, with the potential to prepare for a US listing and showering the Coates family with even greater riches.
[1] Multiples of money to burn: https://www.apollo.com/[2] DraftKings splashes the cash: https://www.forbes.com/sites/crminsights/2021/11/30/draftkings-to-bid-22-4b-to-acquire-sports-betting-giant-entain/?sh=1e5c01734b1b[3] The selloffs: https://www.nasdaq.com/articles/gaming-stocks-down-draftkings-ceo-sells-shares-at-all-time-high-2021-12-02[4] DraftKings' potential as a suitor: https://www.bloomberg.com/news/articles/2023-02-01/draftkings-acquires-twice-in-two-days-amid-mrg-rush
- Financial dealings in the sports betting industry continue to evolve, with rumors circulating about potential mergers and acquisitions, such as the possibility of DraftKings acquiring Bet365.
- The prospect of a Bet365 acquisition by DraftKings has not been confirmed by either party, but the Sunday Times suggests that DraftKings might be the most likely contender from the gaming sector.
- The Coates family, Bet365's ruling hand, has reportedly held discussions with Wall Street banks about various prospects, including a sale or an IPO in New York, but potential buyers seem limited at this stage.
- If DraftKings were to pursue a full acquisition of Bet365, it might have to offer a significant number of its own shares, with only a small cash component, according to speculative reports.
- Private equity firms, such as Apollo Global Management, CVC Capital, and Blackstone, could present an alternative to DraftKings, offering generous, upfront cash offers to the Coates family for a potential Bet365 acquisition.
- In the past, DraftKings has shown interest in expanding its operations in the UK, as evidenced by its 2021 bid for Entain, which could be a strategic move to deter competitors like MGM Resorts International.
- The betting landscape is filled with financial and business uncertainties, as market trends, valuations, and insider activities (such as share sell-offs) can significantly affect the outcome of any potential mergers and acquisitions in the sports betting sector.
