Fanatics Closes in on Acquiring a Sports Betting Company
Mike Coppola/Getty Images for Fanatics.
Fanatics, the $18 billion conglomerate that is the leader in sports merchandise, licensing and recently trading cards, is expected to soon close on a deal to buy a sportsbook operation.
Sources say meetings with Rush Street Interactive (RSI) and Swedish company Betsson have been productive and the company might buy one of them soon.
After Fanatics hired FanDuel CEO Matt King and The Action Network Chief Operating Officer Ari Borod, they began to build out a team, but sources said it would be impossible for them to start from scratch. Initial talks were with DraftKings in a mega deal, but things faltered.
Rush Street makes a lot of sense. While they are in 10 states including Illinois, Pennsylvania and New Jersey and are top five in online gross sports betting revenues — they have the weakest of brands for a company of their size.
In other words, they can easily change names to an acquirer like Fanatics or even be rebranded ESPN Sportsbook.
Sources say RSI is in the lead for the rights to ESPN’s name in gambling, one of the reasons why Rush Street worked to win the third skin in Connecticut with the lottery after DraftKings and FanDuel partnered with the two Native American tribes. It was recently reported by the Wall Street Journal that ESPN was looking to sell a sports betting rights package for $3 billion.
Both Fanatics and RSI have no comment on the talks.
RSI stock popped 6.6% in the first hour of The Action Network’s reporting.
Betsson would be more of a backend technology acquisition and a further leap for Fanatics. While it has an impressive iGaming product, it does not yet operate in the United States.
Fanatics has been making moves of late, most notably shaking up the sports trading card world by acquiring the future rights to make MLB, NFL and NBA cards. By acquiring the future licenses, and cutting the leagues and the unions in on an equity stake, they have effectively rendered current rights holders like Topps and Panini a lame duck.
After Fanatics pulled off the MLB deal, Mudrick Capital, which was less than 24 hours from a vote to take Topps public in a SPAC roll up, nixed the plans.