Fanatics is making its long-awaited push into sports betting at the start of next year.
“We’re going to start launching in January,” said Fanatics CEO Michael Rubin at the Sports Business Journal World Congress of Sports.
- Rubin said Fanatics would be in around “15 to 20 states” by the start of the 2023 NFL season.
- “We’ll be in every major state other than New York, where you can’t make money,” Rubin added. Sportsbook operators are required to pay a 51% tax rate in New York for 10 years. Fanatics applied to operate there last year and was rejected.
- Rubin added that sports betting and Fanatics’ other business segments “could be $8 billion even in the next decade,” in profits.
In March, Fanatics raised $1.5 billion at a $27 billion valuation.
Fanatics will leverage its database of millions of customers, a source with knowledge of Fanatics’ sports-betting efforts told Front Office Sports, and its patience getting into the space would likely lead to 30% lower costs overall.
Fanatics is planning to implement a crossover loyalty program between its ecommerce and sports betting.
Industry insiders had speculated that Fanatics would have to acquire an existing betting company, but the source said the purchase of a company like PointsBet — which currently operates in 12 states — isn’t expected.
“They’re a digital company with a good brand,” said Chad Beynon of Macquarie Capital. “But as we have seen, it’s not an easy business to even get 5% market share.”