Online sports retail giant Fanatics continues to emerge into the sports betting discussion as the new year begins.
New Jersey fits squarely into that equation and could see the BetFanatics Sportsbook enter the market later this year after signing a letter of intent to purchase the BetParx sportsbook, which is live in five states, including New Jersey.
According to CNBC, the deal remains unconfirmed, no official price has been announced, and representatives from both parties declined to comment.
The news is not the first regarding Fanatics’ possible sportsbook buyout, either, as rumors last year surrounding separate PointsBet and Tipico Sportsbook purchases never amounted to anything.
Will this deal come to terms, or will it fall through and prove to be nothing more than hype?
The New Jersey market is a crucial one for Fanatics
If Fanatics takes over the BetParx Sportsbook operations, it will gain access to one of the top sports betting markets in the nation. While BetParx is not one of the more prominent NJ sportsbooks, Fanatics would likely rebrand and stand to gain the most from entry into the market, period.
The BetParx sportsbook app debuted last year under the Freehold Raceway license.
Fanatics already has bigger shoes than its predecessor would need filling. It also has deeper pockets, brand recognition through established partnerships throughout all professional sports, and bigger goals to become the long-term industry leader in sports betting.
Last October, the company had a database of 94 million customers, which equates to millions of existing contacts within the Garden State.
Fanatics is looking to integrate its sportsbook into a more extraordinary experience, including merchandise, collectibles and cross-channel promos that incentivize players to use all the app’s features. Players could also use rewards points from the sportsbook to buy merch and vice versa.
All this creates a unique experience for BetFanatics users that no other sportsbook can match. In turn, BetFanatics could become a real threat to even the industry giants in a few years.
Is Fanatics emerging at the right time?
The first retail Fanatics Sportsbook opened last week at FedEx Field, home of the NFL’s Washington Commanders. Beyond Maryland, Fanatics CEO Michael Rubin expressed a desire to grow into 15-20 states before the start of the 2023 NFL season.
What else makes this different than the Tipico deal, which fell through last summer? Timing.
Last summer, Rubin (and the company as a whole) were still getting their ducks in a row. With only a couple of months until the ‘22 football season, the BetFanatics Sportsbook would not have had the time to establish a foothold.
The landscape also looks different this year, with operators like Fubo, MaximBet, TwinSpires and Unibet closing all or some of their sportsbooks in 2022.
As a result, it’s 30 to 40% cheaper to gain licensure now than a year ago.
“So our patience saved us money,” said Rubin. He added, “And by the way, if someone says, hey, we have to make acquisitions. I mean, we’re a pretty acquisitive company.”
Are acquisitions the fast track to rapid expansion?
Fanatics’ possible willingness to acquire established sportsbooks gives perspective toward another way it could expand into 15-plus states before September.
As of now, Fanatics operates in just one state – Maryland. With the addition of BetParx sportsbooks, that would become five:
- New Jersey
- New York
- West Virginia
Even without PointsBet, these markets make up most of the list of prospective states for Fanatics to enter. Others like Arizona, Tennessee, Nevada and Wyoming are also realistic.
If Fanatics is going to grow as quickly as it says, acquiring an established presence seems like the best option. For now, though, let’s take things one step at a time. The first acquisition of BetParx still needs to become official.