The fate of Prime Sportsbook is set to be determined at a court-approved bankruptcy auction scheduled to take place Tuesday, January 13th at 10 a.m. EST. The deadline for qualifying bids is 4 p.m. EST on Tuesday, January 6.
AuctionAdvisors has been retained to conduct the bankruptcy auction. Prime Sportsbook is a turnkey digital gaming operation that legally operates in the New Jersey, Kentucky, and Ohio markets. Operated by Out the Gate Inc., the brand has tried to differentiate itself from competitors by offering reduced-juice pricing, a sharp-friendly platform, and strong customer retention.
Companies looking to get a piece of the U.S. sports betting pie without having to worry about building a platform from scratch might be intrigued by what Prime Sportsbook offers. Joshua Olshin, managing partner of AuctionAdvisors, called the bid opportunity “an extraordinary chance to acquire a proven, licensed, and operational sportsbook with a loyal customer base and strong brand positioning”
According to the press release, Prime Sportsbook has a customer account base of 17,500 across its three markets.
“Strategic operators and investors increasingly look to acquisitions as a faster, more cost-effective way to enter or expand within newly opened markets, making this sale a timely opportunity to secure an established platform with existing regulatory approvals and an active customer base,” Olshin said.
Parent Company Out the Gate Inc. filed for Chapter 11 bankruptcy to reorganize its balance sheet and conduct a sale process after failing to achieve profitability. According to the bankruptcy filing, the company entered Chapter 11 with roughly $51 million in secured debt.
Plannatech USA, Prime Sportsbook’s tech stack provider, holds about $4 million in first-lien debt. It has been previously reported that Plannatech USA has a pending deal to acquire Prime Sportsbook. The company agreed to provide up to $6.5 million, some of which is being used to fund the restructuring or sale.
Which company ends up owning Prime Sportsbook will be determined next month.
Out of the three markets where Prime Sportsbook is available, New Jersey is the most mature. Legal online sports betting launched during the summer of 2018, months after the Supreme Court overturned the Professional and Amateur Sports Protection Act. DraftKings and FanDuel sportsbooks were among the early market arrivals.
Prime Sportsbook, on the other hand, didn’t join the NJ mobile sports betting space until 2024, giving those early arrivals a six-year headstart. Additionally, the product lacks the brand recognition due to its limited availability and marketing spend.
The latest sports betting revenue results from the New Jersey Division of Gaming Enforcement paint a clear picture of the challenges Prime Sportsbook faces. Market leader FanDuel has reported nearly $420 million in sports betting revenue through November. DraftKings is a distant second at $291.3 million.
Prime Sportsbook sits at the bottom of the list, accounting for just $1.5 million out of the $1.03 billion year-to-date total. It amounts to a 1.4% market share. From an individual NJ operator perspective, Prime Sportsbook is seeing a 106.1% year-over-year increase.
