Fanatics Debuting Sports Betting App In Tennessee And Ohio Monday

Fanatics is making its long-awaited move into the sports betting space Monday next week with the unveiling of its betting app.

According to the Wall Street Journal, the launch will be official in Tennessee and Ohio. Fanatics recognizes that it is a late entrant into an overflowing gambling market and one that has proven tough to create a lane in but had confidence that its robust following will give it a launching pad.

The company said that it plans to spend one billion dollars investing in its new legal sports betting platform.

Fanatics is built for the fans of sports—just like its name implies. It manufactures and sells apparel and memorabilia such as jerseys, trading cards, and even NFTs. Its expansion into the world of sports betting gives it a chance to become a one-stop shop for sports followers.

“[Fanatics will] connect gamblers to its rewards program for deals on merchandise, signed collectibles and access to athletes and games,” according to the WSJ.

Only Fanatics customers will have access to the betting platform upon the first launch. However, the company has ideas of expanding that and also expanding its reach, with Maryland and Massachusetts becoming early targets for the app’s next jurisdictions.

The company also hopes to be operational in at least 12 states by football season to capitalize on NFL betting, which gets underway on September 7.

Fanatics already partnered with the Washington Commanders, based in Landover, Maryland, to erect a first-of-its-kind in-stadium sportsbook that will allow game-attending fans to place bets in a dedicated gambling lounge. That development led to the NFL overriding a previous rule that said sportsbooks could be inside teams’ stadiums but could not be used during home game days.

Chairman and CEO Michael Rubin is expecting the company to become profitable by 2025 or 2026. It has already had conversations about expanding internationally to help reach that target date, even if it means suffering a larger initial deficit because of the resources required to set up shop and grow a customer base.

Company estimates revealed that Fanatics is expecting roughly $8 billion in revenue in 2023 and excludes the rights to trading cards that should come to fruition in the next few years.

Rubin was forced to sell his 10% stake in Harris Blitzer Sports Entertainment, which owns the Philadelphia 76ers and New Jersey Devils, to enter Fanatics into the world of sports betting. NBA bylaws prevent team owners from also being in charge of gambling entities.

As optimistic as Rubin is for Fanatics, he can expect a great struggle. PointsBet sportsbook was a recent victim in the fierce competition for a share of the market in the American gambling ecosystem and ultimately decided to sell its North American operations.

FanDuel, DraftKings, Caesars and BetMGM specifically present roadblocks for up-and-coming gambling entities. In March, FanDuel’s parent company, Flutter Entertainment, revealed that FanDuel had reached a 50% share of the American audience.

Fanatics’ gambling division will enter the congested market under the guidance of ex-FanDuel CEO, Matt King, who was instrumental in elevating the company once sports betting was legalized nationally in 2018.

It also brought on Meta’s head of investor relations, Deborah Crawford, to lead an IR group. Fanatics has no immediate plans to go public but expects to do so in the future.

Sports betting is a couple of months away from what is traditionally a dead period because of the lack of ongoing sports events and their lower magnitude. The NBA and NHL playoffs are all in progress but will soon wrap up, and the MLB will become the main show. Participation typically picks back up in September when college football and the NFL return to center stage, and shortly thereafter, when the MLB playoffs commence.