Fanatics Climbing The Betting Ladder
Fanatics market share is growing in the US market, surpassing rivals and closing in on a podium spot, thanks to an improved app and strategic moves.
The Bulletin Board
THE LEDE: Fanatics is challenging for the #3 spot in the US market.
ROUNDUP: HI sports betting bill passes House; Jackpocket exits NM; Digital poker games approved in ME; BetMGM cuts New Jersey workforce.
NEWS: Nevada regulators give Kalshi 10 days to exit the state.
VIEWS: Are sweepstakes direct competitors of online gambling?
AROUND the WATERCOOLER: More Perfect Union tackles Ban or Bankrupt.
STRAY THOUGHTS: It’s all about the journey.
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The Lede: Fanatics Grows, Now Above 5% Market Share
Fanatics is making steady progress in the US market. According to Eilers & Krejcik Gaming (a newsletter sponsor), Fanatics leapfrogged Caesars and finished barely behind BetMGM in December.
STTP first reported on Fanatics’ growing market share in October and November. As I wrote in November:
Fanatics, one of STTPs’ four “Challenger” brands, is suddenly getting a lot more attention as the company has steadily increased its market share throughout 2024.
“Early October data reports show that Fanatics is making a strong play for podium positions in its US online sports betting state markets,” Vixio’s (a newsletter sponsor) Daniel Stone tweeted. “Fanatics captured third place in the massive New York OSB market and settled marginally behind 3rd-placed BetMGM in Maryland during October.”
Last month, I noted that Fanatics had shot to the #3 spot in New York and “is also gaining steam in Massachusetts, where it ranks fourth behind DraftKings and FanDuel and is nipping on the heels of BetMGM for third place.” In May, Fanatics was dead last in the Massachusetts market.
According to EKG, Fanatics improved its app (which now ranks third in EKG’s proprietary app testing) and had the best-in-market uptime for the NBA in January, per trading analytics firm Bettormetrics. EKG credited its acquisition of Banach Technology, which was part of its PointsBet deal, for the #1 ranking in its latest US Sports Betting Market Monitor.
Allan Stone (STTP Talking Shop Podcast episode #39) has also been tracking Fanatics’ rise and cites its acquisition strategy as the secret sauce.
“While everyone else was copying FanDuel's old marketing playbook, Fanatics brought their DTC mindset to sports betting,” Stone wrote on LinkedIn. “Skip the cash-burning top-funnel marketing. Focus on what they already do better than anyone: leveraging first-party data and mid-funnel engagement.”
STTP has mentioned the foolishness of that strategy (copying FanDuel and DraftKings), noting, “Too many are trying to beat FanDuel and DraftKings at their own game instead of carving out a unique niche. They are trying to beat a stronger opponent with strength or trying to overcome strength with finesse when the only option is some combination of both.”
In his LinkedIn post, Stone went on to say:
“Everyone trying to copy FanDuel's 2020 strategy is fighting for yesterday's customers… Fanatics proved you don't need to burn cash on national TV spots to win. You just need to understand your customers better than anyone else.”
Roundup: HI Sports Betting Bill; Jackpocket Exits NM; Digital Poker in ME; BetMGM Cuts Jobs
Hawaii House of Representatives passes sports betting bill: A sports betting bill has passed the Hawaii House and will now move to the Senate, where it is expected to run into a brick wall. As STTP noted on Monday: “Despite momentum in the House, the effort is likely dead in the Senate. The Senate version was deferred in committee, after more than 150 pages of negative testimony were submitted.”
Jackpocket exits New Mexico: Following its dismissal from Texas, there is some more bad news for Jackpocket, as New Mexico Attorney General Raúl Torrez issued an opinion saying, “The Memorandum of Understanding between the New Mexico Lottery Authority and Jackpocket constitutes the authorization of internet gaming in New Mexico. As such, it triggers the renegotiation required by Section 17 of the Indian Gaming Compact between New Mexico and the Tribes.”
Digital poker games are coming to Maine: Per the Action Network: “Casinos in Maine now have the option of adding no-dealer poker tables to their floors after Jackpot Digital Inc. received license approval from the Maine Gambling Control Unit (MGCU).” I first encountered Jackpot Blitz at G2E 2017, and was already impressed. It appears the product has only gotten better over the years.
BetMGM cutting 83 jobs in New Jersey: BetMGM is set to layoff 83 employees at its headquarters in Jersey City, according to reporting by NorthJersey.com. "The flurry of jurisdictions legalizing and launching sports wagering has slowed," said Jane Bokunewicz, an associate professor with Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism. "The initial flurry of activity as patrons transitioned from existing (often illegal) sportsbooks or discovered sports betting for the first time (accelerated by the circumstances around the COVID-19 pandemic) has likely eased in recent months." This is obviously anecdotal, and is likely just redundancy. Still, this story is not going to help the “iGaming saves jobs argument.”
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Why Catlin remains an Entain shareholder
Why there’s still hope for an Entain turnaround
Listen to the episode here.
News: Nevada Regulators Send Cease-and-Desist to Kalshi
The cease-and-desist train is still rolling along, with the latest recipient being Kalshi. The Nevada Gaming Control Board called the prediction market site unlawful without an approved gaming license in a press release:
“The Nevada Gaming Control Board (NGCB) today issued a cease and desist order to KalshiEX LLC, dba Kalshi, notifying the company that offering "event-based contracts" on sporting events and election outcomes "is unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Commission."
The press release also mentions election betting markets, noting that even licensed sports polls in Nevada are prohibited from offering election markets:
“Regarding event-based contracts on the outcome of elections, the letter informs Kalshi that even licensed sports pools in Nevada are prohibited from accepting wagers on such activity. The letter therefore advises Kalshi that its actions are in direct violation of Nevada's public policy.”
Kalshi has 10 days to cease operations in Nevada.
You can read Straight to the Point’s deep dive on the brewing battle between regulated gambling operators and prediction markets here:
Views: Do Sweepstakes Compete with Regulated iCasinos?
The Social & Promotional Games Association (SPGA) has released a statement about new research from Eilers & Krejcik Gaming’s Social Sweepstakes Gaming Monitor 4Q24, with the SPGA saying the research indicates, “Social casino games are an entertaining, interactive, and social experience enjoyed by millions of American adults alongside other popular casual mobile games like Clash of Clans and Candy Crush.”
The statement goes on to say that EKG’s past and present research indicate social casinos do not directly compete with traditional real-money online casinos:
“When asked to describe their motivations in their own words, social sweeps players cited general entertainment value and excitement/thrill more frequently than winning real money… That's not surprising, as the majority of players at social sweeps sites never spend money.”
STTP Thoughts: This is going to be a hotly debated claim on par with “does online gambling cannibalize brick-and-mortar gambling,” which I discussed with the Innovation Group’s Brian Wyman in a recent podcast episode.
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Around the Watercooler
Social media conversations, rumors, and gossip.
A new 26-minute video from the YouTube channel, More Perfect Union (1.4 million subscribers + another 280k on X) tackles the rise of legal sports betting in the US and the “ban or bankrupt” moniker that is being attached to the industry.
The video features David Hill, Isaac Rose-Berman, and Richard Schuetz.
From the video summary:
“Draftkings and Fanduel have changed sports betting — and made it much worse for you. The odds are worse than ever and the enticements to lose more money are aggressive. And if you win too much, they'll cut you off.”
Stray Thoughts
Very few people sign up for martial arts classes thinking they are embarking on a 5, 10, 50 year journey. Most adults think of it like joining a health club or starting yoga classes, something practical, maybe for health or a vague sense of safety. Parents see it as a sport for their kid, like soccer with better discipline.
So why do people sign up?
If it’s an art with a belt system (traditional karate or Brazilian Jiu Jitsu) it’s a quest for a black belt — a quest most abandon when they realize the time and commitment.
The beauty of martial arts is that for the people who stick to it for a while, they discover the journey is way more fulfilling than the belt, and they don't want it to end, because no matter how skilled you get, you barely scratch the surface.