Fanatics Betting Details Future Expansion After $150M PointsBet US Purchase
After announcing its agreement on a $150 million purchase of Australia-based PointsBet’s US sports betting division earlier this month, Fanatics betting division CEO Matt King has given some detail on the company’s plans and expectations for the future.
Fanatics is a $31 billion merchandise and collectibles retailer with more than 95 million registered users. It has been talking a big game in the media since mid-2022 about its sports betting intentions, with a stated aim of offering services in 12 legal states by the end of 2023.
With the expected purchase of PointsBet US, Fanatics has moved closer to that goal. Despite struggling for market share nationally against FanDuel and DraftKings, PointsBet had licenses to operate in 14 states.
But King remains level-headed about the time line.
“Our first priority is to make sure consumers in the state have a good experience,” he told Sports Business Journal. “So, we’re working with the PointsBet team on the integration plan and the consumer-facing view of that.”
Fanatics Betting has already partly launched in two legal states, Ohio and Tennessee, and it will continue those over the coming months. It also plans to launch later this month in Massachusetts.
As for new markets opening up via the PointsBet license, don’t expect swift progress.
“Once we have a plan, we’ll go to regulators and talk to them about it. That’s the way we’re approaching the migration. But there’s work to do on the details,” King said.
Should PointsBet’s shareholders seal the deal on the acquisition as expected in a late July vote, three new states will see Fanatics sportsbooks by August 31.
It hopes to have sportsbooks open for business in all of PointsBet’s currently licensed states by May 2024.
That’s one year from the announcement of the deal, which would put it on a similar time frame to competitor Caesars’ acquisition and relaunch of William Hill US in 2021.
Further and Faster
King also highlighted the value of PointsBet’s software and platform, including behind-the-scenes tech.
The Australia-based operator had “built a good product, really with limited resources compared to the competition,” he said.
“There are places we’ll be able to incorporate into the platform that we’re building. And it will help us get further faster, in terms of the betting offering that we can put out there.”
Fanatics is taking the long approach with its soft launches in Ohio and Tennessee. King says they will continue to do so in the future.
As much as it obviously wants to leverage its huge brand presence and customer base in the sports market, problems may be encountered with regulators along the way.
Regulators in Massachusetts were reportedly unimpressed with its initial attempts to offer free bet promotions tied to Ohio customer purchases from the Fanatics merchandise store.
Fanatics has been told they won’t be allowed to offer such promotions in Massachusetts when it launches its sportsbook. Ohio regulators swiftly suggested it cancel the promotion there, too, once the news broke.
As that demonstrates, the company needs to be careful with the integration of the two sides of the business.
“We’ve been in this for 10 years, so there’s no rush to say, ‘Hey, let’s turn on paid marketing’… It was the idea of let’s just do this as a beta launch for a while and really focus on opening up to Fanatics customers first, which is what we’ve done,” King said.