Bet365’s exit from the unregulated Chinese gambling market has fueled speculation about the company’s future, including the possibility of a sale, with DraftKings as the most likely potential buyer. Although China has historically been considered a “gray” market by the gambling industry, operations there have become increasingly risky from a regulatory perspective, and most publicly-traded operators have withdrawn from it voluntarily. Some analysts have, therefore, speculated that bet365‘s exit is intended to eliminate that wrinkle from any potential merger.
As a private company, bet365’s true value is a matter of speculation. However, estimates as high as $10 billion have been floated, meaning any potential buyer would need to be both ambitious and well-funded. However, while it’s easy to see the strategic logic for a combination with DraftKings, it’s still entirely a matter of speculation whether bet365’s owners—the Coates family—are interested in selling and whether DraftKings is prepared to pursue such a major acquisition. DraftKings CEO Jason Robins recently implied to investors that the company is not in any big rush to pursue major expansions this year.
Bet365’s withdrawal from China
Earlier this month, bet365 notified users that it would cease operations in China on March 27. Gambling is illegal in China, except in Hong Kong and Macau. However, given the economy’s size (second largest in the world after the US), many offshore operators, including bet365, have targeted Chinese consumers. It’s important to note that you should avoid offshore casinos or sportsbooks as they carry significant risks.
China was once a key market for bet365. According to Regulus Partners, in 2014, it was the operator’s second-biggest market after the UK. Regulus estimated that China accounted for 20% of bet365’s revenue at the time. However, that share has dropped below 5% due to various factors, including growth in other markets and state disruptions.
Given these shifts, bet365’s decision to exit China makes sense. It allows it to focus elsewhere, including Brazil, which launched its legal online market on January 1, and the US.
Analysts point at DraftKings as a potential suitor
Regulus estimates that over 90% of bet365’s revenue comes from domestically regulated markets after leaving China. Industry insiders suggest that operators distancing themselves from gray markets become more attractive acquisition targets.
According to the Earnings+More newsletter, if bet365 were to consider a sale, an IPO is unlikely, leaving only a handful of potential buyers. Among them, DraftKings stands out, with one industry source calling it the “only real buyer” capable of acquiring a company of bet365’s scale. Valuations of the UK operator suggest a potential price of at least £7.2 billion ($9.3 billion), with some experts estimating $10 billion.
The assessment is based on an 18x multiple of Flutter Entertainment’s (FanDuel’s parent company) current LTM adjusted EBITDA. That’s the company’s earnings before interest, taxes, depreciation, and amortization across the trailing twelve months. In its latest financial reports, bet365 generated £3.7 billion ($4.78 billion) in revenue, up 9% year-over-year. It posted an operating profit of £396 million ($511.4 million).
But while DraftKings could be a suitor, it’s unclear whether it would pursue an acquisition. CEO Jason Robins recently stated that mergers and acquisitions in 2025 are a “big if.” He added that international expansion is not an immediate priority. Financially, DraftKings holds $788 million in unrestricted cash, $490 million available through an existing credit facility, and $500 million raised from credit markets.
Analysts suggest that DraftKings’ US listing gives it a financial advantage, as it has the cash if the price is right. If a deal is to happen, it would likely be a mix of cash and equity, with cash meeting the Coates’ valuation expectations and equity for synergy value and market premium.
DraftKings and bet365 have similar businesses
If DraftKings were to pursue an acquisition, it would make sense. The two companies share a similar business approach: prioritizing sports betting while maintaining a strong online casino vertical. Geographically, the deal would also be complementary, as bet365 is a dominant international brand. At the same time, DraftKings holds a leading position in the US, where only FanDuel (and BetMGM for iGaming) rival its market share.
Despite its global presence, bet365 is not yet a major player in the US market. It has taken a cautious approach, which is unsurprising, as several European operators have failed to gain traction in the US and ultimately left. Bet365 entered New Jersey in 2019 but didn’t expand to another state for three years. However, it has since accelerated its US rollout, and the sportsbook is available in 13 states. Meanwhile, bet365 Casino launched in Pennsylvania last summer, its second US state.
In contrast, DraftKings is heavily US-focused. Its only international market for real-money gaming is Ontario, Canada. Also, it offers daily fantasy sports (DFS) in the rest of Canada. DraftKings also had DFS in several European markets but has exited all of them in the past two years.
It’s unclear whether bet365 would be for sale
While speculations of a sale are circulating, there’s no indication that the Coates family is looking to sell. Part of bet365’s success is contributed to its private ownership. That doesn’t force the company to chase short-term targets by investors. While some analysts suggested that the company’s 9% yearly growth was off-pace in a double-digit growth environment, bet365 appears to be in a healthy financial situation. Without financial strain, a sale would likely only happen if the Coates family “fell out of love with the game.”
Rather than preparing for an exit, bet365 seems focused on expansion, particularly in Brazil and the US. Last fall, it opened a US headquarters in Denver, with plans to employ up to 1,000 people. It also recently expanded with a launch in Illinois. Furthermore, it signed a partnership with the MLB’s St. Louis Cardinals. Missouri approved sports betting last fall and it’s expected to launch this year.
About the Author
