As a triumvirate of three major sportsbook operators tighten their grip on U.S. market share, the much-ballyhooed debut of a prominent sports retailer has widely been viewed as a game-changing moment for the sports betting industry.
Last week, Fanatics completed its most critical step yet in launching an online sportsbook by filing a trademark for its sports betting brand with the U.S. Patent and Trademark Office. The company is seeking to trademark its sports betting operations under the brand “BETFANATICS,” according to the filing, discovered by trademark attorney Josh Gerben on Monday.
Coming soon: "BetFanatics" 👀
— Front Office Sports (@FOS) May 23, 2022
With a valuation of $27 billion, Fanatics is primed to disrupt the U.S. domestic sports betting industry from the moment it begins accepting online wagers. In March, Fanatics CEO Michael Rubin boldly declared that he expects the company to become the largest sportsbook in the nation over the next 10 years. While DraftKings’ market capitalization is still in the billions, its valuation hovered around $5 billion on Tuesday as persistent concerns over inflation continue to batter the sector. DraftKings had a market capitalization above $20 billion this time last year.
Shares in MGM Resorts and Flutter Entertainment have also fallen sharply over the last six months. MGM Resorts owns a 50% stake in BetMGM, while Flutter is the owner of FanDuel Sportsbook. Collectively, the three sportsbooks maintain a share of at least 60% of the U.S. sports betting market, according to various estimates.
Founded in 1995, Fanatics has become one of the nation’s largest retailers of team sportswear and merchandise. In 2012, Rubin formed Kynetics with the acquisition of Fanatics from eBay and the purchase of majority stakes in the e-commerce sites Rue La La and ShopRunner. Later that year, Fanatics completed a $150 million funding round led by two venture capital firms, with a valuation of $1.5 billion.
By 2016, Fanatics had agreed to a long-term partnership with the NFL to operate the league’s online store, NFLShop.com. Two years later, Fanatics raised the stakes with a 10-year deal with the NFL that gave the company exclusive rights to distribute all Nike NFL jerseys.
The company also has a vibrant presence in the digital collectible space through its Fanatics Collectibles division, along with Candy Digital, its non-fungible token (NFT) business. And in January, Fanatics made another splash with the acquisition of the Topps sports card brand for $500 million.
14 years old: Michael Rubin uses $2,500 in bar mitzvah money to open a retail ski shop.
49 years old: Fanatics raises $325 million at an $18 billion valuation, bringing Michael Rubin's net worth to ~$10 billion.
Fanatics will also expand into sports betting, iGaming & media. pic.twitter.com/CqddMN5Ly3
— Joe Pompliano (@JoePompliano) August 10, 2021
Consequently, Rubin views Fanatics as a one-stop shop for sports fans eager to purchase a jersey, invest in an NFT, and get a bet down — all from a common wallet.
“Long term, my goal for Fanatics is very simple,” Rubin said on The Bill Simmons Podcast in March. “I want billions of sports fans globally looking at Fanatics as a beloved brand and use us to do most things digitally. That’s the long term.”
Rubin, who is part-owner of the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils, has a net worth of about $8 billion, according to Forbes.
Last June, Fanatics hired outgoing FanDuel CEO Matt King several weeks after the executive announced his departure from the latter company. King now heads Fanatics’ sports betting and gaming division.
Litany of sports betting and casino offerings
In its 623-word filing, Fanatics disclosed that the brand will serve as a downloadable mobile application for sports betting, online gaming, and fantasy sports contests, among other forms of entertainment.
The app, according to the filing, may feature “video clips of sports competitions,” player and game forecasting through predictive analytics, and “web cam feeds” of various sporting events. From an online gaming perspective, BETFANATICS could offer a litany of casino games not limited to online poker, blackjack, solitaire, roulette, slots, bingo, keno, baccarat, and craps, the company disclosed.
Fanatics filed the trademark weeks after reports surfaced that it had acquired source coding from Amelco that enabled it to begin the process of constructing a sports betting platform. Though multiple outlets confirmed the original report from Eilers & Krejcik Gaming, Fanatics denied that it had a deal in place regarding the source code. There are also rumblings that Fanatics is pursuing a sizable market access deal as part of its quest to develop a sports betting technology platform, a financial industry source told Sports Handle.
Last November, Fanatics narrowly missed out on receiving a a mobile sports betting license in New York. Since then, New York Assemblyman J. Gary Pretlow has questioned why the company — which counts Jay-Z among its board members — was not included in the market.
Fanatics has not said publicly whether it intends to go live with sports betting by the start of the NFL regular season, and a Fanatics spokesman did not immediately respond to a request for comment from Sports Handle on Tuesday.