Nearly two weeks have ed since Fanatics announced its intent to acquire PointsBet’s U.S. assets, a move that could enable the nascent sportsbook to gain access to some of the nation’s top markets.
On May 14, Fanatics Betting and Gaming entered into a binding agreement to acquire New York. Earlier this week, gaming regulators in the Empire State provided more detail on the process needed for the sportsbook to gain entry into the state.
Under the process, no license transfer between PointsBet and Fanatics will be required, New York State Gaming Commission (NYSGC) Executive Director Rob Williams said at Monday’s meeting. Rather, the transaction itself requires staff review, according to Williams. The staff will begin the process with a background investigation of Fanatics and its related entities, he added.
The commission’s staff has already been working with Fanatics to provide licensing documentation, Williams explained. The staff has also disseminated opening requirements prior to license consideration, according to the regulator. The process will likely include a thorough review of Fanatics’ technology platform that will be used to facilitate mobile sports wagering.
A tax rate of 51% on mobile wagering gross gaming revenue has deterred many operators from marketing heavily in New York. The rate is tied with New Hampshire‘s for the highest in the nation.
Gaining market access to NYC d5b25
Two years ago, Fanatics was one of several companies that mobile sports betting operators, it did not recommend the Jay-Z backed bid from Fanatics for licensure.
Nevertheless, the public gained access to some of Fanatics’ data, as the NYSGC released the applications of every bidder (with confidential information redacted). At the time, Fanatics noted that its vast database contained approximately 81.7 million sports fans. The figure has since increased to about 95 million, the company disclosed recently. Fanatics’ ability to turn e-commerce and NFT customers into sports bettors will be closely watched by the industry in the coming months.
Besides its robust database, Fanatics identified several other competitive marketing advantages that could differentiate the company from its rivals:
- A well-established brand with far-reaching digital and retail assets
- An aggressive budget and acquisition model
- A multi-platform retention program
- Strategic marketing partnerships
Converting customers is key 5q463j
In addition, Williams recommended consideration of the transfer at the commissioner level rather than at the staff level. Williams’ recommendation was later seconded by NYSGC Chair Brian O’Dwyer. The commission did not set a timetable for approval.
A stock and equity sale agreement released by PointsBet this month indicates that the first phase of the transaction should be completed around Aug. 31. At that time, Fanatics is expected to acquire the entities that own and operate PointsBet’s business in at least three states, according to the agreement.
Joe Stauff, an equity analyst with Susquehanna International Group, expects Fanatics to be live in about six states by the start of the Tennessee.
In Massachusetts, beta testing on the Fanatics Sportsbook app has begun ahead of the company's previously indicated schedule, in time for a must-win Celtics home game.
(via @EricRaskin)https://t.co/68xfWFoBuP
— Sports Handle (@sports_handle) May 25, 2023
Questions still remain about whether Fanatics can wrestle market share from industry leaders BetMGM, generated revenue of $12.8 million and $7.1 million, respectively.
Fanatics CEO Michael Rubin has set an ambitious goal of becoming the nation’s top sportsbook over the next 10 years. One industry expert, who spoke to Sports Handle on the condition of anonymity, thinks Fanatics can become one of the top five national operators in about three years. Still, he doesn’t see another sportsbook catching the two industry leaders anytime soon.
