Genius Sports Jumps Into Free-to-Play Games Space with FanHub Acquisition

Posted on: May 3, 2021, 12:39h. 

Last updated on: May 3, 2021, 01:11h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Sports betting data provider Genius Sports (NYSE:GENI) is entering the free-to-play (F2P) games arena with the purchase of FanHub Media Holdings.

Genius Sports
Genius Sports CEO Mark Locke speaking at a conference. His company is buying FanHub Media Holdings. (Image: Twitter)

Financial terms of the deal, which was announced today, weren’t disclosed. London-based Genius didn’t say if the acquisition will add to earnings. The transaction is slated to close in the current quarter.

As part of the transaction, Genius Sports will also acquire FanHub’s suite of F2P games, including fantasy sports, trivia, bracket challenges, pick ’em, and polling games,” according to a statement issued by the companies. “These will complement Genius Sports’ established offering to sports leagues and federations, sportsbooks, media companies and broadcasters worldwide.”

As regulated sports wagering proliferates across the US, operators are looking to leverage F2P concepts to efficiently add more customers and keep fans engaged, and they’re using acquisitions to move into the space. In addition to Genius, Bally’s is among the gaming companies recently notching an F2P transaction. That casino operator announced a deal for SportCaller in February.

Complementary Move for Genius Sports

The FanHub Media buy is the first for Genius Sports following its merger last month with special purpose acquisition company (SPAC) dMY Technology Group, Inc. II.

The purchase could complement Genius partnerships with MLB, MLS, Betway and PointsBet, because the F2P provider is already working with those leagues and operators. The NFL is also part of that roster.

Last month, the data provider inked an accord with the NFL believed to be worth $1 billion in what was viewed as a coup for the upstart company. The objective of that accord is to offer sportsbook operators a superior alternative to current NFL data and live feed, potentially enticing them to pay up for the Genius platform, boosting revenue for the company and the league in the process.

“Building on Genius Sports’ official data capabilities, the business will integrate FanHub’s solutions across its media services, delivering proven content solutions that help drive customer activity, fan engagement, sponsor activation, and lower cost per acquisition,” according to the statement.

More Deals for Genius?

It’s not immediately clear if Genius will imminently pursue more acquisitions. But the company has some firepower if it chooses to engage in further deal-making.

Following the separation from dMY Technology II, Genius has $145 million in cash on its balance sheet and no debt. It could also use shares as currency. That’s a viable option, considering the stock is higher by 43.44 percent over the past month. The company’s current market capitalization is $3.79 billion.

Last week, Genius said 2020 revenue increased 31 percent year-over-year to $150 million, while earnings before interest, taxes, depreciation and amortization (EBITDA) checked in at $18 million, compared with a loss of $6 million in 2019.