Just recently, Fanatics announced a major deal to acquire PointsBet U.S. allowing it access to the sportsbooks leading online gambling markets in the country. This also includes New York, which is the leading jurisdiction for online sports betting in the U.S. It was announced the company will not need to transfer licenses to begin legal operations in the Empire State’s digital sector.
Earlier this month, Fanatics Betting and Gaming announced that it has entered into an agreement to purchase PointsBet’s U.S. assets for US$150 million. If finalized, the Fanatics will be able to join leading markets in the country such as the New York one. It opened in January 2022, and for its first year generated US$700 million in tax revenue for the state’s coffers.
Commission Provide More Details
Executive Director of the New York State Gaming Commission, Rob Williams, revealed that the company will not need to transfer a license to continue its operations in the Empire State. At last week’s meeting, he also said that the transaction required staff review, and now the staff will start the process with a background investigation of Fanatics and its related assets.
Mr. Williams reminded that the regulator’s staff has already been in contact with Fanatics to provide licensing documentation. He also shared staff has also disseminated opening requirements prior to license consideration. Now, the process will most probably require a complete review of the company’s technology platform which be utilized to offer mobile sports wagering in the state.
For its operations in the state, the company has outlined several marketing advantages that should help it succeed. Starting off with its well-respected brand which touts far-reaching digital and retail assets and its large budget and acquisition model. Then there are its multi-platform retention program and strategic marketing partnerships to make it stand out among the competition.
Lastly, Mr. Williams recommended consideration of the transfer at the commissioner level instead of the staff level which was backed by the regulator’s Chair Brian O’Dwyer. However, the commission did not provide a time period for the approval. The first phase of the transaction should be completed around August 31, 2023. At that time, the company will most likely have obtained the entities that own and operate PointBet’s activities in at least three states.
Tough Time Penetrating the Market
However, it should be noted Fanatics will have a tough time making its way into the market, which is dominated by FanDuel and DraftKings. In March 2023, the two operators generated wagering volumes of US$740 million and US$590 million, respectively. This was a major portion of the total for the month’s handle of US$1,785,952,977 in the Empire State.
April was no different, as the two operators captured more than half of the betting volume in the state. For the month, the state recorded US$1.5 billion in online wagers on sports. With FanDuel handling US$626.3 million of it, and DraftKings US$516.4 million. They had US$71 million and US$44.9 million in revenue before tax, respectively.
Source: Rybaltowski, Matt “No License Transfer Required as Fanatics Begins Move Into New York” Sports Handle, May 26, 2023