With the hiring of investment bank Moelis & Co., Atlanta-based PrizePicks has the gaming industry wondering what its end goal might be.
Moelis & Co. has a history of assisting high-profile corporations in identifying merger and acquisition targets. As such there were disparate rumblings that the DFS player could be looking to sell or else expand–possibly into the online sports betting market.
PrizePicks not interested in selling, source says
A source close to the conversations, however, has expressed that PrizePicks is indeed actively engaged in merger and acquisition opportunities, but does not have any intention of a full or partial sale of the business.
With millions of daily active users, PrizePicks has maintained its status as one of the giants of Daily Fantasy Sports. However, like other DFS operators before it, PrizePicks has not taken the next step into offering sports betting.
So, what could a merger or acquisition entail, potentially? If you follow the template laid by the top DFS platforms–namely DraftKings and FanDuel–they utilized their userbases in the DFS space to easily transition into online sportsbooks in states with legal sports betting. PrizePicks, touting an outsized share of users in California and Texas, would be uniquely positioned to enter the legal gaming market should either state move forward with a sports betting launch.
Georgia sports betting legalization has generated momentum in recent years but ultimately to no avail. As an in-state brand, PrizePicks would also benefit tremendously from gambling expansion should it expand into the OSB market.
Laying the groundwork for expansion
In a hypothetical M&A scenario, PrizePicks could begin laying the groundwork for a shift into legal sports betting or a further evolution of the DFS+ industry.
The company launched the PrizePicks esports lab in June, an educational resource for people interested in esports DFS. In a press release, PrizePicks noted that one million users had built an esports lineup (as of June 2024). It also identified that Counter Strike 2 “ranked fourth in entry fees and lineups built among all sports on PrizePicks, trailing only professional basketball, football, and baseball.”
PrizePicks has already invested in an esports data provider, Bayes esports. The hiring of Moelis & Co. could help the brand further solidify its place in the DFS esports market. It could also mean an attempt to make the jump into sports betting, perhaps with a focus on niche markets like esports.
This is all hypothetical, of course, but the notion that the company has no interest in selling any aspect of its business means that it’s only seeking to build upon its dominance in DFS and competition should take note.
