Fanatics is launching a casino app as it pushes beyond sports. Here's its plan to fight rivals in a cutthroat market.

Business Insider

02-05-2025

On Friday, the company is launching a stand-alone casino app in four states as it expands beyond its bread-and-butter commerce and collectibles businesses. It's also rolling out a web version.
Fanatics entered the gambling fray a few years ago with sports betting and has been adding online casino games like slots, blackjack, and roulette. Its trajectory is familiar in the gambling world, where FanDuel, DraftKings, and others have moved from sports betting to online casinos.
The industry widely views Fanatics as a potential disruptor to FanDuel and DraftKings' market dominance, even as a latecomer to the US market, which has exploded since 2019.
It's competing not only with fantasy sports giants but also with casino brands with Vegas roots, such as BetMGM and Caesars Entertainment, and upstarts like Bet365 and ESPN Bet.
"We've got a big task on our hands," Conor Grant, president of gaming for Fanatics' betting and gaming arm, exclusively told Business Insider. "We're a challenger brand, but the owner of this company loves nothing more than a fight and to prove people wrong."
Fanatics has relied on its brand and database of over 100 million people who have bought jerseys, apparel, or other memorabilia for an edge. Grant called the company's loyalty program its "secret weapon." It gives Fanatics a direct line to potential bettors.
Grant said the casino player Fanatics is targeting now is a bit different from the traditional sports bettor, who is typically more male and mid-to-late 30s. Casino players tend to be female and late 30s or 40s.
However, the company said its database is diverse in terms of demographics and is roughly half men and half women, with a slight male skew.
"What is unique about Fanatics' position is that they have a good product, and they are able to reward people outside of just giving them promotional credits or money to play with," Macquarie analyst Chad Beynon said.
To plug the casino app, Fanatics is running a sweepstakes promotion in May and June to give away $2 million in FanCash. It can be redeemed for casino credits, bonus bets, or merch.
Fanatics said it doesn't have to spend a lot of money on TV ads like others because of its database, though Grant said it also plans to market the casino app on TV, through online ads, and through audio.
Can Fanatics disrupt the new gambling order?
As Fanatics expands its casino business, the gambling industry will be watching to see if it lives up to the hype.
Data from Eilers and Krejcik Gaming presented at a gambling conference in March showed that Fanatics made 2024 year-over-year market share gains in online sports betting and, to a lesser extent, in online casinos. Its growth outpaced challenger brands in the US like ESPN Bet and Bet365, but its overall market share doesn't measure up to established players led by FanDuel and DraftKings.
"At this point, I would say they're slightly below expectations," Beynon said of Fanatics. "I know originally, Michael Rubin had mentioned that he wants a top-three position in the space, which would kind of warrant 10% market share. They haven't been able to achieve that this year or any year so far."
Fanatics said its sportsbook is at or very close to that goal in states where it operates.
Grant said part of the reason Fanatics is launching the stand-alone casino app is to build awareness for the brand beyond sports.
"We want to be the preferred destination for slot players and the US casino players," Grant said. "We want to give them a really special experience with really compelling rewards and unrivaled loyalty."
Steven Ruddock, a gambling industry analyst and consultant, said Fanatics' biggest challenge and opportunity could be its ability to "not just peel off customers" from rivals but also win over new players who haven't gambled before.
So far, Fanatics has mainly focused on cross-selling casino games to sports bettors, who Grant said tend to be more into table games and live dealers. As such, table and live make up roughly two-thirds of the amount wagered on Fanatics' casino games, a metric known as handle, he said. Slots make up the rest.
The company expects that ratio to change with the new app and its growing focus on recreational slot players.
The casino app will include a mix of games, including slots, blackjack, roulette, jackpots, and video poker. It will have both licensed and original games.
Grant, who previously ran Flutter's business in the UK and Ireland, said he's been surprised by how price-sensitive US casino players are compared to those in Europe. He said the company needs to be "really clever and targeted" with whom it's going after.
He said his two biggest priorities for 2025 are establishing Fanatics Casino as a real alternative to the dominant market players in the states where it operates and making the loyalty program appealing to casino players.
"We're an entertainment business, and we want to really entertain customers when they come and they choose to invest their leisure time and their spend with us," Grant said. "We want to make sure we give them a good experience for that."