PrizePicks Valued at $2.5 Billion in Sale as Gaming Lines Blur

Core Insights - Allwyn has agreed to acquire a majority stake in PrizePicks, valuing the daily fantasy platform at $2.5 billion, amidst a chaotic U.S. gaming industry [1][4] Industry Overview - The U.S. gaming industry is experiencing significant turmoil, making it increasingly difficult to define and regulate sports gambling [1] - Prediction marketplaces like Kalshi are emerging, claiming to enable legal sports betting across all 50 states, while traditional fantasy sports brands are diversifying into conventional gaming and prediction markets [2] Company Performance - PrizePicks, founded in 2015, has become the largest daily fantasy sports operator in North America, operating in 45 states, with an adjusted EBITDA of $339 million for the year ending June 2025, reflecting a 60% increase from the previous year [3] Transaction Details - Allwyn will purchase 62.3% of PrizePicks for $1.6 billion in cash, with potential additional payments based on performance metrics, leading to an implied enterprise value of $4.15 billion [4] - The investment is expected to close in the first half of 2026, with PrizePicks continuing to operate as a standalone brand under its current leadership [8] Competitive Landscape - The current uncertainty in sports betting mirrors the rise of daily fantasy sports a decade ago, where companies like FanDuel and DraftKings transitioned to sports betting, allowing smaller operators to gain market share [5] - Competitor Underdog has recently raised funding, valuing the company at $1.23 billion, and is also expanding into sports betting and prediction markets [6] Allwyn's Strategic Moves - Allwyn, based in Switzerland, has a diverse portfolio that includes lottery games, iGaming, and retail casinos, and has made significant investments in the U.S. gaming market [7]