DraftKings Could Emerge in Thin Field of Bet365 Bidders

• Neither company has commented about the possibility of a marriage
• Bet365 rumored to be shopping itself or positioning for IPO
• Private equity looms large

Rumors are fresh that Bet365 is considering a potentially transformative transaction, including a full or partial sale or a US initial public offering (IPO), but the pool of credible buyers is already viewed as shallow. Among other gaming companies, it could be DraftKings (NASDAQ: DKNG) and no one else.

To be clear, neither Bet365 nor DraftKings have commented on that speculation and it’s not clear if the two sides have been in touch. News surfaced last week that the Coates family, which controls Bet365, has held discussions with Wall Street banks on a variety of possibilities for the UK-based sportsbook giant. Those include a sale, which would allow the family to monetize its interests in the company, or perhaps selling shares in New York.

As reported by The Sunday Times, fellow UK betting firms Entain and FanDuel parent Flutter Entertainment (NYSE: FLUT) are unlikely to bid for Bet365 because regulators there would likely raise antitrust concerns. Plus, there is significant overlap between Bet365’s European operations and those of Entain and Flutter.

That could leave DraftKings as the most logical remaining suitor from the gaming industry for Bet365, according to The Times.

DraftKings Has Resources to Bid for Bet365

Rumors indicate that if Bet365 were to sell itself outright, CEO Denise Coates would like to fetch a $12 billion valuation.

Based on DraftKings’ market capitalization of $17.12 billion at the close of US markets today, the Boston-based company has the resources to bid for the British company, but it’d likely be an equity-heavy offer with a small cash component.

As for the possibility of DraftKings bidding for a UK company, there’s precedent. In 2021, the operator floated a $22.4 billion cash and equity proposal for Entain, though some experts believe that was a performative exercise designed to drive up the price of Entain to prevent MGM Resorts International (NYSE: MGM) from acquiring full control of BetMGM.

Private Equity Firms Make Sense as Bet365 Suitors

As Casino.org reported last week, given their established ties to the gaming industry, private equity firms Apollo Global Management and CVC Capital could be sensible suitors for Bet365. The Times added Blackstone to that list, though none of those three have publicly expressed interest in acquiring the gaming company.

All three asset managers are credible prospective buyers because they can present the Coates family with more upfront cash than DraftKings likely could.

Additionally, the private equity companies can offer the family more flexibility than a gaming-specific buyer. A private equity buyer could acquire Bet365 outright or part of the business and do that while preparing for a US listing that would further enrich Denise Coates and the family.