PrizePicks Sells Majority Stake to Allwyn for $1.6 Billion
Deal with Allwyn International builds on sports gaming and prediction boom
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Popular fantasy sports operator PrizePicks announced that England-based lottery operator Allwyn has purchased a majority share of the company.
As part of the agreement, Allwyn received 62.3% of PrizePicks. The deal valued PrizePicks at $2.5 billion. However, if PrizePicks meets certain performance metrics over the next three years, additional cash considerations under the agreement could raise the implied value of the company to $4.15 billion.
CEO Mike Ybarra will stay on to lead the brand and PrizePicks will continue to operate as a standalone brand within Allwyn. The move gives Allwyn, which operates lotteries in Europe and North American, more of a presence in the U.S. market.
“This is a significant European investment, and Allwyn’s biggest in the United States to date,” Allwyn CEO Robert Chvatal said. “PrizePicks is an entrepreneurial company that is empowering a new generation of fans who want to engage with their favorite sports and athletes, not just spectators. PrizePicks has created an intuitive platform that simplifies the process of making skilled predictions. I look forward to partnering with Mike and the PrizePicks team to support the growth of the business.”
More Details On The Deal
PrizePicks uses a player statistic prediction model, similar to player prop bets in traditional sports betting. Players can compete against each other in tournaments and other contests.
Chvatal told the Wall Street Journal that the social aspect of gaming like that found on PrizePicks helps reach players, including younger gamblers.
“It’s not about the best bets, but that you feel you are part of a community,” he said.
PrizePicks doesn’t offer traditional sports wagering and thus doesn’t have to adhere to most state sports betting laws. The company has found a niche in the market and become one of the most popular fantasy sports operators in the country.
Could Allwynn be planning to harness some of that to enter the traditional sports betting market? That remains to be seen, but industry heavyweights like FanDuel and DraftsKings operate both daily fantasy sports and traditional sports betting platforms.
In other sports betting-related news, international online gaming giant Flutter Entertainment recently purchased Boyd Gaming’s remaining 5% stake in FanDuel. The deal closed after Flutter agreed to pay Boyd gaming $1.755 billion for the final few percentages and now owns 100% of the company.
https://www.wsj.com/business/media/prizepicks-sells-majority-stake-to-lottery-operator-for-1-6-billion-f2f75cc8