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With plans to launch its proprietary sports betting platform in about a dozen states around the start of the football season this year, Fanatics Sportsbook on Monday began contacting Ohio and Tennessee customers to offer them access to the company’s platform in those states. Fanatics began beta-testing the platform in Tennessee and Ohio earlier this year and is now moving into a “second phase” by allowing existing Fanatics customers the opportunity to bet.
While most wagering companies go live with an all-in bang on a given day, Fanatics Sportsbook is taking a more structured approach, said a company spokesman, in an effort to work out kinks not only on how the platform works, but how customers interact with it before opening to the general public. Broader access began in Ohio and Tennessee, for example, on Monday, but not every Fanatics customer got a code to check out the site.
Ultimately, some will receive an email code, others logging onto the site to purchase merchandise will be offered a code, some may sign up through a Better Collective property (i.e., Sports Handle, US Bets, Action Network), and still others may be be granted access in a different way. The idea here is that Fanatics Sportsbook can continue to not only control how many people are playing on its site but can also effectively gather customer feedback and continue to massage the current platform to make it more user-friendly.
As the rollout continues, with Maryland and Massachusetts — the other states in which the company is licensed — coming in the next few months, Fanatics Sportsbook has plans to be live in numerous states by the end of the year. The number of live states is a bit of moving target, with CEO Michael Rubin at one point suggesting the number would be as high as 20, but more recently backing down to 12.
In order to really blanket the country, Fanatics Sportsbook first needs market access. To date, 29 U.S. jurisdictions — 27 states plus the District of Columbia and Puerto Rico — have legal digital wagering. Four of those — Kentucky, Maine, Nebraska, and Puerto Rico — haven’t yet launched online betting. With the exception of Puerto Rico, none are likely to be live by Sept. 7, the opening day of the NFL season.
19 states still have licenses available
Sports Handle took a state-by-state look at where licenses are still available, and where Fanatics Sportsbook could potentially get a license outside of the four states it is currently licensed in. Fanatics, like any other operator, could potentially get into a currently “closed” state by purchasing a competitor or making a creative deal. This state-by-state breakdown is strictly a look at where licenses are still available.
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Nine live digital jurisdictions do not have any licenses left, while 15 do. The jurisdictions that Fanatics Sportsbook — or any other operator, for that matter — could not currently get licensed in are Arizona, Michigan, New Hampshire, New York, Oregon, Pennsylvania, Rhode Island, Virginia, and Washington, D.C. All of those jurisdictions either have caps on licenses that are filled or have a deal for a monopoly.
Fanatics CEO Michael Rubin says the sports-merchandising company’s 95 million customers offer an edge over gambling competitors https://t.co/1NejdPAtR8
— WSJ Business News (@WSJbusiness) April 29, 2023
Of the 10 biggest legal sports betting states by population, only five — Illinois, Massachusetts, New Jersey, Ohio, and Tennessee — either have licenses still available or have already granted one to Fanatics. But in Illinois, it will cost Fanatics Sportsbook $20 million to get a license, as it would be considered a standalone sportsbook and eligible for one of three untethered “sports wagering operator licenses,” none of which have been claimed since the state regulator launched sports betting in June 2019.
Beyond those states, Arkansas, Connecticut, Colorado, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska (if it expands to include mobile), Puerto Rico, West Virginia, and Wyoming have licenses available. In some states, the number of available licenses is limited.
For example, a digital sports betting license became available in Connecticut earlier this year after Rush Street Interactive decided to terminate its contract with the Connecticut Lottery. There are only three licenses total available in the state. DraftKings and FanDuel are both live in Connecticut under deals with the state’s two Indian tribes.
In other states, like Colorado, Indiana, or Iowa, the number of available licenses is 35 or more, with no more than 25 being used in any of those states.
Getting the right message out
The challenge for Fanatics Sportsbook has been to avoid creating customer confusion due to its unique approach to launching wagering.
The company is the first non-sports betting entity to cross over into the space and leverage an existing database for wagering. The goal, as Rubin said at a recent conference, is to “give sports fans one place to do everything they want to do digitally.”
What does that look like? It would mean that a Boston Celtics fan, for instance, could buy a team jersey, order a trading card, and lay a wager on the team’s Eastern Conference semifinals series with the Philadelphia 76ers without ever leaving the platform.
Speaking at Tues’ #SBJWCOS, @Fanatics CEO @michaelrubin backtracked from previous estimates that #FanaticsSportsbook will be live in 15-20 states by WK 1 of the @NFL regular season. Rubin placed the number at closer to 12, while adding that it will be the “biggest states.” pic.twitter.com/M1TExH7XLb
— Matt Rybaltowski (@MattRybaltowski) April 18, 2023
Additionally, Fanatics Sportsbook has a “FanCash” feature that appears to allow sportsbook customers to accrue points or “cash” that they can then spend on merchandise.
The technology needed to pull off this seamless experience will likely be cutting edge, and Fanatics could well be writing the playbook for other massive sports-related or technology companies (think Amazon or Apple) to follow suit.
Bennett Conlin contributed to this story.
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