I now kind of think that if Fanatics wants to dominate the American sports betting space, it can.
I realize the above is about as hot a take as one can offer, but after seeing the company in action — namely, at this past weekend’s Fanatics Fest at the Javits Center in New York City — it strikes me as something it can do, if it wants.
I was once at a convention at the Javits Center. For the spa industry. You know, day spas, facials, massage, that world. It was the major convention for the spa industry. Memory is memory, so who knows how close I am to the math on this, but Fanatics Fest was about 3 billion times larger than the spa show.
It was … massive. Crowded. Wall-to-wall collectibles dealers. Giant stage with seemingly every big name in sports, and a few in entertainment, chatting away. Dozens of “fan” experiences, from a WWE entry exhibit to a UFC octagon.
There was a lot.
There was a “museum” featuring over $200 million in collectibles. LeBron James “logoman” rookie card. A T-206 Honus Wagner. Thanos’ glove. Guards everywhere.
The lines for pictures and autographs were … let’s just call them lengthy and move on.
And tucked away in one corner was a tasteful, 21+ area. It was the Fanatics Sportsbook and Casino area. It took up the space of a large downstairs in a split level. A tiny footprint, all things considered.
And they were giving away some $500,000 in FanCash, which can be used on a dollar-for-dollar basis in the sportsbook.
Will the next contestant on Fanatics Is Right come on down!
Small but mighty
As it stands right now, Fanatics is operating online sportsbooks in 22 states and D.C. Matt King is the CEO of what’s called Fanatics Betting & Gaming. He was previously in that role at FanDuel.
Michael Rubin, the boss of bosses over there at Fanatics, also has Ari Borod as chief business officer of the sportsbook, and he used to be the COO at The Action Network. Scot McClintic, who was the GM at Penn National Gaming’s Barstool Sportsbook, is the COO. Ted Moss, the former managing director of Sky Bet, is chief growth officer.
I could go on, but the point I’m trying to make here is that the sportsbook clearly isn’t being thought of as an appendage to the (depending on who you ask) $25 or $31 billion valued company, despite the fact it’s estimated its online sportsbook is responsible for only a little more than 5% of the national GGR. Sportico puts the guestimate at around $300 million for 2024 in revenue for the sportsbook arm of Fanatics.
Obviously not chump change, but clearly not the driving force behind Fanatics’ bottom line, which comes mostly from apparel and collectibles, and was estimated to be $8.1 billion in 2024.
Continuing on with this navel-gazing exercise, this is what I’m thinking: Fanatics basically owns the sports fan when it comes to merch and collectibles. Sports betting is the shiny new third prong to fandom.
And merch, collectibles, and sports betting are the holy (well, not quite holy) trinity of the sports fan experience. Fanatics is the far and away leader in two of those verticals. It seems silly to think the company is in the sports betting space to be an also-ran.
I spun the wheel!
So yes: They were giving away $500,000 in Fan Cash via Spin to Win and FanCash Drop games.
Basically, it was The Price Is Right’s Plinko and the Showcase Showdown wheel, and if you’re telling me you never wanted to try both, then you were never home sick from school in the 1980s.
Seriously: It was fun. And I won $400 in FanCash for my troubles (though, full disclosure, there was a hiccup in my funds post-fest, though it was taken care of by customer service, well done and thank you).
Some people were walking away from these games with $10,000 or $5,000 dollars in FanCash. Could use it on merch, could use it on longshot bets, could use it to bet both sides of the same game and turn FanCash into cash, whatever you want.
Anyway, in this little corner of the massive fest was the sportsbook stuff. Maybe it took up a tenth of a percent of the real estate of the entire convention floor (both levels). Tiny.
Yet, they were handing out shares of a half-million bucks to anyone who was willing to wait in line for a few minutes to spin a wheel. (It was so fun.)
It was a weird dichotomy, though. All this money being handed out, and the sportsbook area had such a teensy footprint.
Again, it made me think: You don’t have a $500,000 giveaway if you’re in this for shits and giggles.
Rise up
I’m pretty sure no one thought Fanatics was going to rise up to be the third most profitable sportsbook in New Jersey, coming to the party so late. It does almost as well in New York, has dabbled in third place in Illinois, has gotten as high as fourth in Massachusetts.
It’s been toppling or competing with bigger names who have been in the game much longer, like BetMGM, Caesars, ESPN Bet.
Clearly, the braintrust is doing a bang-up job turning Fanatics merch customers into Fanatics sportsbook customers. It’s good to have a list of sports fans, as DraftKings and FanDuel have proven.
Oh yeah. DraftKings. Remember when Fanatics and DraftKings almost merged? Seems like a lifetime ago.
It was four years ago.
The companies, according to the New York Post, were neck-deep in talks for a 50-50 merger, with each company valued at $24 billion. According to the reporting, it was Michael Rubin who walked away from the table, which angered DraftKings’ Jason Robins, and that sowed the seeds for their semi-hot war, which has already included the bidding battle for PointsBet and the litigation over Michael Hermalyn and VIP secrets.
Kind of worth noting here, just for kicks: DraftKings accounts for about 35% of the American online sportsbook market share, a tick below FanDuel. FanDuel, of course, is part of Flutter, and contributes about a third of the bottom line to the company. DraftKings is “just” DraftKings.
And as of the time of this writing, it has a market cap of about $20 billion. Not quite an equal of Fanatics anymore.
And golly, remember that semi-holy trinity, and how sports betting is the third leg? Grabbing 35% of the market share, plus DFS and best ball assets … well, I’m talking nonsense, but still: Fun to think about.
Give Fanatics DraftKings, and they’ve got it all.
All this is to say — once again — that after spending a few hours in the middle of the Javits Center, one thing I know for certain is Fanatics is not done growing. Who knows where it leads?
Oh yeah — it was fun
Worth mentioning, before I go: The actual fest part was incredible.
Not joking. If you’re a card collector, I cannot imagine there being another time or place on Earth that had more selection to buy, and more cool stuff to look at.
I mean, I was thisclose to a T-206 Honus Wagner. That’s bonkers.
Celebrities were everywhere, and they were part of the experience. They weren’t exactly mingling, but they were close enough to touch. And they were clearly having a ball.
And then there was Kevin Durant, on stage when he found out he was traded to the Houston Rockets. Crazy.
At the risk of sounding like a shill, it was a pretty awesome experience. A job well done.
And as I’ve laid out above, this show demonstrated to me there is zero — like, actual zero — chance Michael Rubin is in the sportsbook game without plans to rise to the top.
