Sports apparel conglomerate Fanatics is diving headfirst into the sports betting business. On Monday, Fanatics founder Michael Rubin filed for a sports betting license in New York alongside multi-platinum recording artist Jay-Z.
The partnership between the two sets up Fanatics Sportsbook to be very successful in the legal betting industry. Fanatics has become the authority for sports apparel, but Rubin has wanted to make the company a destination for all things sports.
Partnership between Fanatics and Jay-Z
Sports betting is the latest goal for Fanatics. This is not surprising because Rubin hired former FanDuel CEO Matt King earlier this year to explore pathways in the gaming space. King helped FanDuel rise to success in the legal sports betting industry, which is why Rubin brought him to help lead the gaming division of the company.
Jay-Z, who was already an investor in Fanatics, will also work with Rubin to start the sportsbook. Jay-Z is a world-renowned rapper, but he is also a very successful businessman, so his expertise should help the company.
Major League Baseball is another investor in Fanatics, which has helped the company rise to prominence in the past year. Forbes estimates that the company is worth $18 billion, nearly tripling its value in a year.
Jay-Z saw this as a tremendous business opportunity and a chance to regain a spot in the sports betting space. The 51-year-old Brooklyn native held gaming licenses in Nevada and New Jersey through his 40/40 clubs before they were closed.
The documents filed by the New York State Gaming Commission showed that Jay-Z would be the vice chairman and on the board of directors for the company’s new Fanatics Betting & Gaming division. Rubin will be the CEO of the gaming side and work alongside many other prominent betting industry leaders.
Next steps for the sportsbook
The sportsbook documents were filed to the New York State Gaming Commission, but they must be approved. Fanatics has partnered with Kambi to be the technology provider for the sportsbook. Kambi is a worldwide leader in the betting technology industry, so this elevates the sportsbooks’ status.
Fanatics is not expected to have any issues securing market access in New York. Operators must agree to a 50% tax rate to launch in New York, which is astronomical relative to other legal states.
Fanatics will have to directly compete with the largest sportsbooks in the country, including FanDuel, DraftKings, BetMGM, and Caesars. This will not be an easy task, but Rubin has established a team, technology provider, and business framework to win in the legal betting industry.
Following the announcement, he said, “We’ve realized we have this incredible opportunity…to really transition from a leading e-commerce company to building the leading digital sports platform. That means, as a sports fan, you go to Fanatics and get any sports product that’s important to you.”
If Rubin is successful in launching a sportsbook, he will successfully reach this goal. Fanatics is becoming a sports empire, and launching a sportsbook is the next step in the process.