Fanatics is finally entering the sports betting market with speculations running wild that it plans to acquire Rush Street Interactive. Fanatics, which has been primarily involved in sports merchandise, is not looking to get a taste of the lucrative sports betting pie and a partnership is the only strategy that will accelerate Fanatics’ move into the burgeoning market.
The internet chatter may have been inspired by Draftkings’ latest move to purchase Golden Nugget Online Gaming for an estimated $1.6 billion. Owing to this partnership, DraftKings will be able to leverage GNOG’s well-known brand, as well as its popular iGaming product. Now that GNOG is out of the picture, the only other options that make sense of the brand are RSI and Swedish Gaming Giant Betsson.
In line with its mission to take over the iGaming space in the US, Fanatics hired Matt King. If you might recall, Matt King used to be the CEO at FanDuel before he stepped down in May this year. Draftkings also hired Tucker Kain to oversee the brand’s entry into the sports betting space. Kain is also the president of business enterprise for the Los Angeles Dodgers.
The other possible partnership for Fanatics is Betsson, which is currently enduring shareholder revolt. Betsson group announced not too long ago that its CEO Pontus Lindwall was leaving the company, which was followed by the chairman Patrick Svensk’s exit soon after.
888 Holdings would have been a great partner for Fanatics. However, 888 Holdings is currently unable to forge any new partnerships moving forward as it recently took over William Hill’s non-US assets. Any plans for taking over PointsBet would also have to involve Penn National Gaming, which has a 6.7% stake in the Australian Gaming giant.
Rush Street Interactive enjoys a heavy presence
As such, for now, Rush Street Interactive appears to be the most appropriate option for Fanatics. Not only is it an affordable option for the new entrant but it is also going to give Fanatics the multi-state market access that the new brand needs to succeed. At present, Rush Street Interactive operates under the BetRivers.com and PlaySugarHouse.com brands.
It is also accessible in 10 states namely New York, West Virginia, Colorado, Virginia, Illinois, Pennsylvania, Indiana, New Jersey, Michigan, as well as Iowa. Just recently, Rush Street acquired a minority stake in Boom Entertainment, one of the most sought-after mobile games developers in the market. As a result of this partnership, Rush street now has access to Mississippi, New Mexico, as well as Louisiana.
If Fanatics successfully acquires Rush Street, it will also gain market access to Colombia. Rush street launched its first-person product range in Colombia for its brand RushBet. RushBet now offers an array of first-person games including Lightning Roulette, Dream Catcher, Baccarat Blackjack, and Mega Ball. Because of its work in Colombia, Rush Street was recently shortlisted for 3 awards by the SBC Latinoamérica Awards 2021.
Rush Street, which is a Chicago-based gaming and wagering company, has been nominated for the titles of ‘Sponsorship of the Year’, ‘Sportsbook of the Year’, and ‘Casino Operator of the Year’. Colombia was the first region in which Rush Street launched its RushBet product thus making the brand the 1st regulated online gaming operator from the US to debut its sports betting services in Latin America.
The Colombian regulated market has become a critical component of Rush Street’s long-term plan for international success. As the Latin American market continues growing to become an iGaming and sports betting industry leader, Rush Street will be present to dominate and become the top performer in the Latin American market, a fact that Fanatics will be keen to explore.
Rush Street recently shared its results for Q2 reporting an increase of 89% to reach $122.8 million. In addition to the growth, Rush Street recently also announced that it had gained market access to Connecticut, as a result of the brand’s partnership with the Connecticut Lottery Corporation. Under this partnership, Rush Street will be one of only 3 operators offering sports betting products in the state.
The Fanatics brand will likely keep growing
Over the last few years, the Fanatics brand has grown exponentially to see its valuation more than double in under a year. As of March, the brand’s valuation went from $6.2 billion to $12.8 billion. Fanatics is already serving customers that have an interest in sports betting, which will make it so much easier for the brand to enter the sports betting market.
As one of the most popular sports merchandising brands available, the Fanatics brand already enjoys a vibrant presence in the US. Just last month, the brand secured trading card rights for all the major leagues namely the National Football League, the National Basketball Association, and Major League Baseball.
Fanatics’ new partnership with MLB ended the league’s decades-long partnership with competitor Topps. Thanks to its partnership with the NFL and NBA, Fanatics also caused Panini to lose its trading card licenses. Apart from sports betting, Fanatics also plans to expand beyond sportswear and collectibles into broadcasting. Fanatics is also planning on building its brand name in the NFT collectible market through its partnership with Candy Digital.
Fanatics has a lot to prove if they want to succeed in the sports betting game. That’s because it will be pitted against established brands such as FanDuel, DraftKings, and BetMGM, which currently enjoy a significant market share in the sports betting industry in the US. According to data, FanDuel currently holds about 40% market share in the states where it offers its iGaming products.
Earlier this year, Fanatics made headlines when it announced that it plans to enter the New York sports betting market. If the brand successfully leverages its 80 million customer base and ties its sports merchandising brand into its new sports wagering offering, then the brand will have an easy time luring sports bettors into its new platform. It is also expected that Fanatics will be able to offer up its merchandise catalog as rewards for loyal customers.