Fanatics is fanatical about sports. The company made its mark selling the fan gear that goes along with the athletic competition. Company CEO Michael Rubin sees expansion in his immediate future under the guise of sports betting.
Let’s be honest here—if a fantasy sports company can go into an online casino business, then a business that sells all things for fans to wear can open sportsbooks.
Speaking at the CAA World Congress of Sports in New York, Rubin insisted the company will launch a sports betting division early next year, in January 2023, in time for the NFL playoffs and the Super Bowl. Rubin expects Fanatics to be live with sports betting in 15-20 states by the 2023 football season.
The entry of Fanatics into the U.S. sports betting industry will give the firm an opportunity to test whether customers will mix multi-leg parlays with the jersey of their choice.
By January, Fanatics plans to launch sports betting operations in every major state except for New York, Rubin said at panel. Last fall, Fanatics appeared close to receiving a nod for a mobile sports betting license in New York, but it missed the final cut. They won’t try again, not with a 51 percent tax on gross gaming revenue.
“We’ll be in every major state other than New York, where you can’t make money,” Rubin said. “We do like to make money, by the way. It’s this crazy concept in business, where we have revenue, we try to have profits that follow it.”
The long-awaited entry of Fanatics into the sports betting space has been largely viewed as a pending threat by its potential sportsbook competitors. Whereas traditional sportsbooks have offered inducements such as boosted bets and free wagers to bring on new customers, Fanatics has another arrow in its quiver. The company views itself as a one-stop shop for fan entertainment inside a stadium, with the objective of becoming a “global digital platform for sports,” Ari Borod, the company’s chief commercial officer for betting and gaming, told Sports Handle this spring.
Speaking at the Saratoga Racing and Gaming Conference in August, JMP Securities analyst Jordan Bender said that Fanatics could utilize its team partnerships inside a stadium environment for customer acquisition purposes.
“I do expect them to get very creative in leveraging that real estate and those relationships into other in-stadium sportsbooks,” Bender said.
Rubin believes that the breadth and depth of Fanatics’ offerings will allow the company to differentiate itself from its competitors, and provide for lower acquisition costs.
Another panelist, David Isaacson of Spectrum Gaming Group, is focused on the customer acquisition metrics that could indicate whether Fanatics is successful. A typical sports bettor places wagers on approximately three distinct apps, according to Betting Hero, with the total fluctuating somewhat based on their state. From the outset, Fanatics will be tested on whether it can convert customers from the top books that have received a head start of several years.
