The long-awaited debut of Fanatics Sportsbook in the Keystone State has finally arrived after buying PointsBet for $150 million.
The sports merchandise company has been eyeing expansion within the gambling industry for some time, and has finally made a huge move.
Fanatics had already operated in four states before this latest deal. With the purchase, Fanatics hits the market in an additional 12 states, including PA online sports betting.
The agreement sets up Fanatics perfectly for the start of the 2023 NFL season.
What the Fanatics and PointsBet deal looks like
According to the release, Fanatics bought the US assets of PointsBet Sportsbook for $150 million. In a joint statement, the two parties said:
“Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s US business. While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
Fanatics has acquired the right to PointsBet’s sports wagering, advance-deposit wagering and iGaming operations. It also gets Banach Technology in the deal, which developed PointsBet’s in-play software.
PointsBet is keeping all international business and operations, but exits the US market altogether.
PointsBet Managing Director and Group CEO, Sam Swanell, said:
“Despite the strategic success building a valuable asset in the US, the costs of operating in a state-by-state environment, together with the requirements to build significant scale to compete against well capitalized operators, led us to explore a number of options.”
Fanatics had already been operating in the following states:
With the acquisition of PointsBet, Fanatics is now set to be live in:
- New Jersey
- New York
- West Virginia
Fanatics’ path into the legal gaming industry
Fanatics has always been a sports merchandise company, built by the brilliance of CEO Michael Rubin.
Rubin owned a 10% minority stake of the Philadelphia 76ers since 2012. He sold that stake in June 2022 after making plans to enter the gaming world. It led to a conflict of interest between the Sixers and his sports betting endeavors.
“It got too complicated. We plan to take bets on the Sixers by the end of this year,” Rubin said in August 2022. “It was great when it wasn’t a conflict. When I saw that it was holding back Fanatics it was immediately an easy decision. Fanatics is a massive opportunity. This is a company I think can be the most valuable company in sports. Potentially the most valuable company in technology. I am locked-in and laser-focused.”
As Rubin plans on being a one-stop shop for sports betting, licensed team merchandise, collectibles and tickets, Fanatics had applied for a sports betting license in Pennsylvania back in April 2022. Getting approval from the Pennsylvania Gaming Control Board (PGCB) often takes a while. To speed up the process, back in January, Fanatics had reportedly looked into purchasing betPARX Sportsbook.
Nothing came of the report, however, as Fanatics has now entered a deal with PointsBet. As opposed to waiting for PGCB approval, Fanatics can now jump right into the Pennsylvania market when it is ready.
Fanatics Sportsbook has leg-up on marketing, customers
Fanatics is entering the sports betting industry with a strong customer base already set. The company has 95 million customers worldwide due to the booming sports merchandise industry.
Fanatics plans on tapping into that customer base by using a cross-sell marketing program. Sports bettors have the opportunity to earn FanCash for merchandise by using the sportsbook:
- Straight bet: Up to 1% of the amount bet
- Parlay bet: Up to 3% of the amount bet
- Same game parlay: Up to 5% of the amount bet
FanCash earned through the sportsbook can be turned into bonus bets, discounts, merchandise and collectibles.
PointsBet market share in Pennsylvania and recent activity
PointsBet Sportsbook could never get a foothold in the Pennsylvania sports betting market. In a state dominated by FanDuel Sportsbook PA and DraftKings Sportsbook, PointsBet only commanded 1.7% of market share in sports betting in 2023.
Since online casino revenue is not broken down by operator, it’s tough to gauge the performance of PointsBet’s online casino. The operator is partnered with the Hollywood Penn National, which is the highest grossing licensee in the state. Hollywood Penn National holds a 42% share of online casino revenue, as it also operates others like DraftKings Casino and BetMGM.
Most recently, PointsBet resolved a phishing email attempt that sent a message about cryptocurrency to players. PointsBet said that customers’ information remained safe during the hack attempt.
PointsBet also essentially faked a violent lightning strike on Drew Brees, who was shooting a promotional video for the company back in December. Brees turned out to be fine as PointBet released the promotional video on “lightning bets” about an hour after someone leaked a video of what appeared to be a damaging lightning strike.
After PointsBet’s failed attempt in the US, it’ll be interesting to see how Fanatics gains market share, especially in Pennsylvania.