It appears Fanatics is targeting New York sports betting for one of its early PointsBet acquisitions.
At Monday’s New York State Gaming Commission meeting, Executive Director Robert Williams told commissioners that staff members have been working with the online retailers regarding the steps the company needs to take before state regulators can consider granting a transfer of PointsBet’s license to Fanatics.
New York officials will need to review not just its sportsbook operations but other divisions of the company and key individuals within the organization.
“Given that Fanatics is new to New York, and the gaming market, when the ownership transfer is complete, I would recommend consideration of the transaction at the commissioner level,” Williams said.
Fanatics Road to New York
Fanatics Sportsbook NY sought a license in New York back in 2021 when the NYSGC released its online sports wagering solicitation. It was a partner with Penn Sports Interactive and Kambi on an application that ultimately was not selected as a finalist for consideration.
PointsBet is one of nine operators active in the state. The others are Bally Bet, BetMGM NY, BetRivers, Caesars Sportsbook, DraftKings, FanDuel, Resorts World and WynnBET.
Fanatics is currently conducting a soft launch of its mobile sports betting app in Ohio and Tennessee, with plans to launch soon in Massachusetts.
Long rumored to be a suitor for PointsBet’s U.S. operations, Fanatics and the Australian-based operator officially announced their $150 million deal late on May 14 (May 15 in Australia).
Under the terms of the sale, the two sides expect to divide it into two separate transactions. Both sides expect the first part to be completed by Aug. 31, with Fanatics taking over PointsBet operation in at least three states. That portion will be worth $100 million.
The remainder of the deal is expected to be completed by next February, although both sides might extend the closing by three months.
Both agreements are contingent on the approval of PointsBet’s shareholders and state gaming authorities.
As of the week ending May 14, PointsBet NY ranked sixth in handle among the nine operators with a total of $576,912,640.
Why the Rush?
Given that Aug. 31 is just a week before the official start of the NFL season, it makes sense that Fanatics would seek to include New York in the first round of acquisitions.
New York, by far, is the top U.S. sports betting market, even with its 51% tax rate on operator revenue. And NY NFL betting is the biggest driver.
During the state’s 2022-23 fiscal year, which wrapped up in March, New York bettors wagered $16.4 billion and operators collected nearly $1.5 billion in revenue.
New York also would serve as an indicator of how Fanatics will measure against FanDuel NY and DraftKings NY, the two giants in the industry. Combined, those two accounted for more than 72% of New York’s handle in the last fiscal year and generated nearly 80% of the operators’ gross revenues.
Fanatics has said it plans to rely on its consumer database of 95 million people who have purchased products from the company’s online stores to grow its sports betting operation. It’s a similar strategy as DraftKings and FanDuel employed in leveraging their fantasy sports databases to become the dominant players in the market over the last four years.
