Yesterday, we all read about how Fanatics jump started their sports betting business by acquiring PointsBet and the 15 state licenses that come with it. Michael Rubin is clearly a man of his word - he stated that they will have 15 states by football season and sure enough, they will have that or more. And we're talking about markets generating billions in handle including New York (after getting shut out as Fanatics), New Jersey and Pennsylvania added to the existing markets Fanatics has in Maryland, Tennessee and Ohio.
The question becomes how will this move shape the sports betting landscape going forward. Will Fanatics jump ahead of any of the incumbents in terms of market share? How does this affect bet365's plans for US expansion? Will Fanatics have to spend as much on marketing and promotional?
I believe this was a shrewd acquisition for Fanatics as it gives them instant market share and a database of actual bettors (not just from previous merchandise purchases) to whom they can promote their FanCash product (not to mention cross-selling the full range of Fanatics products and services).
In addition, the promotion and marketing spend from Fanatics will be lower than competing sportsbooks simply because their purpose for promotion is completely different. When a sportsbook enters a state, they need to make their presence known and spend to promote their brand in the state to acquire new users. Fanatics is buying the access to 15 states so all they need to do is (a) cross-sell from their existing database and (b) reshape any existing campaigns to align with the Fanatics brand, which will be minimal due to their already strong brand name.