Robert Edwards-USA TODAY Sports

Two years ago Fanatics Betting and Gaming was denied a New York online sports betting license.

Rather than wait for additional operators to be granted access to the state, the sportsbook operator took action into its own hands.

Over the weekend, Fanatics agreed to acquire the U.S. assets of Australian-based PointsBet for $150 million, and included in those newly acquired assets is a shiny New York online sports betting license.

When might New Yorkers be able to access Fanatics Betting and Gaming? Can the operator be a major player in the state? ESNY took a look at the upcoming possibilities for the newest sportsbook coming to New York.

Fanatics Betting and Gaming Makes it to New York

So when can New Yorkers expect to see Fanatics Sportsbook live on their phones? When can betting begin? While Fanatics will eventually gain access through the PointsBet deal to New York’s top sports betting market (and the number two market in neighboring New Jersey) it’s unknown at this point when they will actually receive PointsBet’s New York license.

According to the acquisition details shared by PointsBet, Fanatics will begin acquiring PointsBet assets for three states by August 2023.It’s unknown what state assets will first be turned over to Fanatics in August, but the operator will likely want New York access as quickly as possible to be ready for the upcoming football season.

PointsBet will hand over access to three more states on a rolling basis until all U.S. entities are acquired by Fanatics Betting and Gaming by May 2024 at the latest.

Fanatics Betting and Gaming is currently operational in Ohio and Tennessee, just completing beta testing earlier this month, and has plans to be live in Massachusetts and Maryland by mid-June.

While New York market access is definitely a plus, it’s likely not the primary reason for the sale, explained Chris Grove, Co-founding Partner of Acies Investments.

“New York access for Fanatics certainly wasn’t the primary reason to buy PointsBet, but it’s a nice add-on. Tax rates in the state may come down over time. Even operating at a slight loss in the state is probably good for the business overall,” he told ESNY.

New York currently holds the highest online sports betting tax rate at 51%.

Fanatics Failed to Gain NY Access in 2021

New York has always been a target for Fanatics, even if CEO Michael Rubin did say this past October that Fanatics would be live in several major states by the 2023-2024 football season, “other than New York where you can’t make money.”

Despite his comments, Rubin and Fanatics did apply for one of the original nine New York online sports betting licenses offered in 2021.

Fanatics partnered with Kambi and then Penn National Gaming (now PENN Entertainment) in a bid package, with Kambi serving as a platform provider and the other two companies serving as platform operators.

Jay-Z was listed as the Vice Chairman of Fanatics Sportsbook in the group’s bid for a license, providing strategic and creative direction on the expansion and growth of the Fanatics Sportsbook in New York and across the country.

The bid package was not selected as a finalist by the New York State Gaming Commission.

So, Fanatics Betting and Gaming is finally in the Empire State after having its initial access denied, but can it perform as one of the top operators in the top sports betting market in the world?

Valuable Access…if it Can Perform

Fanatics Betting and Gaming does not have a high hill to climb in order to outperform PointsBet in New York.

The Australian sports betting company has struggled to maintain a position as one of the top-five operators in the state, consistently being outperformed on a weekly and monthly basis by DraftKings, FanDuel, Caesars, BetMGM and Rush Street Interactive.

Since launching in January 2022, PointsBet has reported just $568.7 million in total online sports betting handle, paling in comparison to the top-five sports betting operators.

Rush Street Interactive, the fifth-highest performing operator in the state, reported $596.1 million during the same time period. BetMGM, the fourth-highest performing operator in the state, reported $1.8 billion.

Caesars has reported $3.6 billion, DraftKings reported $6.7 billion, and FanDuel reported $9.2 billion since January 2021.

PointsBet has lagged behind, but could Fanatics Betting and Gaming make a run as a top three or top-four performer in the state?

“I don’t see an obvious reason why Fanatics couldn’t challenge for a top-four spot in New York,” Grove told ESNY.

Looking Ahead to iGaming?

But sports betting may not even be the primary prize for gaining access into New York.

Fanatics Betting and Gaming CEO Matt King recently discussed the operator’s 10-year plan at SBC Summit North America, detailing a roadmap predicated on developing a top-line product rather than being first to market.

So, it’s safe to say that the company’s long-term outlook means it firmly has an eye on the future, and that future most certainly includes plans for New York iGaming.

New York iGaming legislation will likely be a top priority of state politicians in the next few years, which could see an approved iGaming bill as early as 2024 with a potential 2025 launch.

With iGaming being a matter of “when, not if” for New York, entering the sports betting market now may mean an easier path to an iGaming license in the future.

“And the view may be that folks who are already operating online sports betting in the state could have an advantage should New York open up for online casino,” Grove said.

iGaming provides operators with better margins than sports betting and is seen as a faster path to profitability than just offering sports betting alone.

Rush Street Interactive CEO Richard Schwartz recently said at SBC Summit North America that iGaming customers are “five-times more valuable” to the company than sports betting customers. Customers participating in both iGaming and sports betting are “14-times more valuable” than just sports betting customers alone, he said.


Covering regulatory developments in online gambling throughout this fine country.