Fanatics Sportsbook expands into West Virginia as the company enters the sixth state of the ten that is has secured from PointsBet’s grand total of fifteen.
Fanatics Betting and Gaming, a subsidiary of Fanatics Holdings Inc., has continued its quest to take over the US operations of Australian-based sportsbook PointsBet with the launch in West Virginia after the September acquisition of rights to do so. This is also the first time that Fanatics Sportsbook app includes an embedded online casino that features a range of slots as well as table games such as blackjack and roulette.
The Fanatics Sportsbook replaces the existing PointsBet brand in the state of West Virginia. The existing accounts will be seamlessly migrated to the new platform. The migration includes personal details, account balance, rewards points and responsible gaming settings.
West Virginia is the sixth US state in which the Fanatics Sportsbook is live. The others are Kentucky, Massachussetts, Maryland, Ohio and Tennessee.
Fanatics, the sports merchandise giant, valued at over $30 billion, has reached a deal in May to secure the US operations of PointsBet, an online sportsbook operator based in Australia.
In June, Fanatics had to increase its initial offer from $150 million to $225 million to outbid DraftKings, which had made a non-binding offer of $195 million. The increased offer was unanimously approved and recommended by the PointsBet board.
Following the acquisition, Fanatics took over PointsBet’s operations in states of Colorado, Iowa, Kansas, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia. The company also operates sports betting for its existing customers in Tennessee and Ohio and has a retail sportsbook in Maryland, in the FedExField Stadium, home of the Washington Commanders.
In October, Fanatics completed the acquisition of the New York and Wyoming operations. As of now, Fanatics Sportsbook has not yet launched in New York. The company received approval to launch from the New York State Gaming Commission on October 3, 2023, but the exact launch date has not been announced. The sportsbook hasn’t yet launched in Wyoming either.
The takeover is not yet complete. PointsBet will continue to operate in Illinois, Indiana, Louisiana, Michigan and Ohio until Fanatics is able to close on these states individually.
Fanatics’ entry into the sports betting market could be a game-changer. Fanatics, a powerhouse in the North American sports merchandising market, has a massive customer base and an unparalleled understanding of the sports industry. By leveraging its existing relationships with sports leagues and teams, Fanatics are hoping to create a unique and compelling betting experience that appeals to fans.
Fanatics aims to achieve that by focusing on bet placement speed and overall app speed, as well as unique promotions and loyalty programs that span both across merchandise shop and sportsbook. The in-app currency, FanCash, is used to run the platform’s loyalty program. It can be converted into Bonus Bets on the app or can be used to make merchandise purchases on the Fanatics website.
Fanatics CEO Michael Rubin has earlier said Fanatics will operate in every state except for New York, where it’s “impossible to make a profit” due to the competition and the 51% tax. At the time, in late 2022, Rubin also said Fanatics isn’t considering a takeover of PointsBet. In 2021, Fanatics application for a New York sports betting license was rejected.
Fanatics’ entry into the sports betting market could be a game-changer. The company has a massive customer base and an unparalleled understanding of the sports industry. By leveraging its existing relationships with sports leagues and teams, Fanatics could create a unique and compelling betting experience that appeals to fans.
In conclusion, Fanatics’ entry into the USA betting market through the PointsBet takeover is a significant development in the sports betting industry. It not only marks the expansion of a sports merchandise giant into a new domain but also sets the stage for a potential reshaping of the sports betting landscape in the USA if Fanatics Sportsbook is a success.
In January, Fanatics Sportsbook was the first to open a sports betting retail shop inside an NFL stadium. This historic event took place at FedExField, the home of the Washington Commanders.
PointsBet, which operated in 15 states and reportedly ranked as the seventh-largest sports betting operator in the US, struggled to carve out a large enough market share amid stiff competition to become profitable. The increased competition proved to be an obstacle for PointsBet, which believed the company would thrive if it was purchased by another operator that could combine access to an online casino platform, which is exactly what Fanatics has just done in Wyoming.
Despite earning money and cutting costs, the company made a final decision to sell US operations after suffering financial losses for two consecutive years. The changes in the laws in the US allowed multiple sportsbooks to enter the market, which further worsened the situation.
Therefore, in order to maximize shareholder value, PointsBet decided to sell its operations ito Fanatics and focus on its Australian and Canadian businesses. The company hired a New York investment bank to facilitate the sale.
As previously stated, PointsBet continues to operate in Illinois, Indiana, Louisiana, Michigan and Ohio until Fanatics closes on selected states individually. PointsBet previously said subsequent completions in other markets are going ahead as planned.
In the six states where it currently operates, Fanatics is facing tough competition from DraftKings and FanDuel, the two fantasy sports companies, as well as the most recent newcomer ESPN Bet that instantly has total market penetration, some established brands such as BetMGM and Caesars, as well as the British giant Bet365. In these markets, PointsBet wasn’t doing so well at all.