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18 months on from the commencement of legal online gambling in New York and five years since the Supreme Court overturned the ban on sports betting in most of the nation, the first serious disrupter is set to enter the NY scene.
Fanatics, billed as the “Amazon of sports” by its founder Michael Rubin, has now completed a $225 million acquisition of PointsBet’s US assets.
Launch won’t be until September earliest though as the NYS Gaming Commission conducts a review before making a final license decision. The move is seen as the first serious step in a long-predicted consolidation of the New York sports betting industry.
Though it was the seventh-largest sports betting operator in the US, like several others PointsBet was unable to make any dent in the combined 60-per cent market share held by DraftKings and FanDuel.
Despite its attempts to offer a differentiated product, PointsBet just didn’t threaten to even hit the two per cent share mark. Though Pointsbet’s revenues did grow during its foray into Empire State sports betting, continued forecasts of losses meant the sale to Fanatics made sense for its shareholders.
Fanatics is the world’s largest sports gear and collectibles company. Originating in Jacksonville, Florida in the 1990s, Fanatics entered the world of sports betting in 2023 with a retail sportsbook in Maryland.
Since then, Fanatics has tested its beta product in Massachusetts, Maryland, Ohio, and Tennessee before going officially live with a mobile sports betting app in all four states.
Fanatics failed in a bid to land a gambling license in New York in 2022. The acquisition of PointsBet enables the sports brand behemoth to access the Empire State’s enormous betting market - subject to final regulatory approval.
With a huge database of customers already at its disposal, Fanatics will attempt to leverage that key advantage to position itself as a one-stop shop for sports fans. The vision will be to tempt someone browsing merchandise or collectables with the option of placing a wager on their favorite player or team during the same visit.
In terms of promos, we’ve already seen Fanatics offering a cashback program that hands a percentage return on apparel and merchandise purchases plus bets placed. The resulting bonuses can then be accumulated to fund further buying or betting activity.
The Fanatics buyout of PointsBet likely signals the beginning of more structural shake-ups in the New York online gaming industry.
PointsBet was not the smallest sportsbook in the state but it had been accompanied by at least four other betting operators feeding off scraps.
Wynn Resorts has already signaled its intent to exit the gambling arena in several states though the brand will continue in New York. Meanwhile, BallyBet remains closed for business to overhaul its betting platforms.
Fanatics is expected to be able to quickly compete with FanDuel, DraftKings and BetMGM. It’s also predicted that ESPN Bet will be ready to go live before Thanksgiving.
Few of New York’s small fish sportsbooks can compete with the enormous resources and brand recognition of those giants, but will any of them quickly follow PointsBet’s lead at throwing in the towel so soon?
