Wave 2: Does Fanatics Have What It Takes?

Part 1 of a three-part series on the second wave of US sports betting operators looks at Fanatics early performance and future outlook. Part 2: ESPN Bet. Part 3: Bet365.

DraftKings and FanDuel are the top dogs in the US sports betting market, with BetMGM rounding out the podium in the bronze medal spot. But as I’ve been highlighting, three sports betting companies are looking to push their way onto the medal stand: ESPN Bet, Fanatics, and Bet365.

Every move these three companies make has been and will continue to be picked apart, and their performance in 2024 will be closely monitored and compared with their peers.

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Initially, this column was going to touch on all three, but it quickly became apparent this was destined to be a series as each of the three companies deserved its own column (and to avoid a 3,000-word column that is too long for a Substack email).

In this series, I’ll examine:

• Each entity’s approach (thus far).

• How successful has that strategy been to date?

• Their chances of getting on the podium in the future.

• And ask (and possibly answer) one big question.

First up is Fanatics.

Fanatics at a Glance

Fanatics has been on the sports betting radar since the Supreme Court overturned PASPA in May 2018. The sports apparel company was immediately pegged as an exciting possibility in a sea of casino companies and daily fantasy sports operators.

Of interest, Fanatics is a privately held company, which is an extreme rarity in the gambling space. That status will only add to the intrigue as it doesn’t need to abide by the same reporting requirements that its publicly traded competitors must follow.

The company’s sports betting designs were the industry’s worst-kept secret. Still, Fanatics didn’t unofficially enter the fray until 2021, when it scooped up former FanDuel CEO Matt King and created Fanatics Betting & Gaming as part of its plan to expand beyond apparel.

Once it was official, the big unanswered question became tech: What platform would Fanatics Betting and Gaming settle on? Would it acquire a company? Would it build something from the ground up? Would it ink a deal with a B2B company?  

Fanatics started with a combination of option #2 and option #3, confirming it would build a product using source code from B2B supplier Amelco in January 2023.

Fanatics quickly shifted to option #1 with its acquisition of PointsBet, which was sealed in late June.

With PointsBet, Fanatics didn’t have to fret about market access or having its tech stack tested and approved by regulators. Instead, Fanatics could simply transition the brand, as PointsBet was already live in 14 states.

Fanatics Early Results

If you’re familiar with the “I Survived” overturned lawn chair meme, it’s a good representation of Fanatics’ early results. The much-hyped launch hasn’t been as impactful as the company hoped. At least not yet.

The company had some solid app download numbers soon after launch, but considering how quickly the download numbers fell off and what ESPN Bet accomplished on that front just a couple of months later, Fanatics’ download numbers look far less impressive.

Fanatics went live in four states in mid-August:

• Maryland

• Massachusetts

• Ohio

• Tennessee

Let’s look at three of these locales (Tennessee doesn’t break out its numbers by operator) to see how Fanatics is faring.