Fanatics Secures Connecticut Lottery Sports Betting Partnership

David Weir Article ByDavid Weir

December 4, 2023

Fanatics Betting & Gaming has clinched a deal with the Connecticut Lottery Corporation (CLC) to become its exclusive provider for mobile and retail sports betting in the state.

The sports merchandise company’s gambling operation is fast-growing, with this agreement expanding Fanatics sportsbook’s reach to 15 states. The app is expected to launch for Connecticut online sports betting in mid-December.

It will pit Fanatics against established competitors FanDuel and DraftKings, who have been dominant in market share across the U.S. in recent years.

The previous Connecticut Lottery sports betting partner, Illinois-based Rush Street Interactive, has now wound down its operations in the state.

“We are excited to be working with the CLC to bring the Fanatics Sportsbook to customers in Connecticut,” said Ari Borod, chief business officer at Fanatics Betting & Gaming, in a company press release.

“We are looking forward to bringing the Fanatics experience to the ten retail locations throughout Connecticut, and more importantly, adding our innovative mobile app to the online choices available in Connecticut.”  

Connecticut’s Evolving Sports Betting Landscape

The shift in Connecticut’s sports betting landscape began with the legalization of sports betting in March 2021.

This change was part of a gaming expansion package that reworked the state’s gaming compacts with the Mohegan Tribe and Mashantucket Pequot Tribal Nation, allowing them to form online and retail sportsbooks in Connecticut.

In turn, the Connecticut Lottery was permitted to partner with a third-party sportsbook operator for conducting sports gambling activities in-person and online.

Prior to Fanatics’ entry, Rush Street Interactive had secured that deal. It pledged to deliver a minimum revenue share of $170 million for a 10-year partnership.

However, the projections fell short, as the SugarHouse Sportsbook could not match the expected revenue, leading to Rush Street Interactive ending its partnership with the Connecticut Lottery in April.

Rush Street’s exit reflects the challenges faced by various operators in the highly competitive and often unpredictable sports betting industry. Casualties in 2023 have included WynnBet, FoxBet, and most recently, Unibet, which is set to depart all U.S markets in October.

Rush Street partly blamed its inability to compete with Connecticut online casinos offered by other sportsbook operators in the state, as the Lottery’s partner is restricted only to sports betting.

Fanatics Impresses Connecticut Lottery Execs

However, as one door closes, another opens – and Fanatics has clearly not been put off by the lack of online casino opportunity under the deal.

Fanatics’ emergence as a sports betting partner follows the CLC’s rigorous bidding process, where its offer was deemed the best among several bids. The Lottery’s decision underscores the company’s growing reputation in the sector.

With Connecticut now added to the states Fanatics sportsbook launched in throughout 2023, and the surprise launch among online casinos in Virginia, it has been a busy year for the operator.

“Fanatics is the only true sports brand in the gaming space, and has established itself as an innovator in the industry,” said Greg Smith, Connecticut Lottery president & CEO.

“We have been impressed with the Fanatics team, their aggressive entry into the U.S. sports betting market, and we are excited to see how they redefine the sports betting customer experience here in Connecticut. CLC anticipates notable market share growth as a result of this partnership.”

Fanatics Secures PointsBet US Operations in Seven States

Fanatics Betting and Gaming, the sportsbook arm of the sports merchandise operator Fanatics, has completed the takeover of PointsBet US sports betting operations in seven states.

These states are Colorado, Iowa, Kansas, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia.

With this move, PointsBet will undergo a rebranding process in the acquired states, transitioning to “PointsBet, a Fanatics Experience.”

The rollout of the full Fanatics sports betting app in these new states, as available in Massachusetts and Ohio right now, will be coming in the next few months.

Fanatics acquired PointsBet US in June 2023 for $225 million. However, regulatory hurdles have kept it from transferring operations over until now.

“We are excited about what we are building at Fanatics Betting and Gaming, and this acquisition accelerates our plans,” said Matt King, CEO of Fanatics Betting and Gaming, in a company press release.

Road to Launch

Fanatics first announced it was moving into the sports betting market in 2022.

The acquisition of Australian operator PointsBet’s U.S. operations was the first step. Fanatics initially bid $150 million, which was at first accepted by the PointsBet board.

However, one of the two market leading sportsbooks, DraftKings, attempted to derail the plan with a $195 million bid of its own.

That led Fanatics to counter with its eventually successful $225 million offer.

Since securing the deal, Fanatics launched its own sportsbook for beta testing earlier this year in Ohio and Tennessee, and then Massachusetts and Maryland joined in May.

Earlier this month, all four states launched the fully operational Fanatics online betting app.

With PointsBet’s operations now secured in seven more states, the full Fanatics sportsbook could soon be available in 11 markets.

Earlier this year, Fanatics Betting boss King spoke in an interview about his company’s plans after the PointsBet acquisition.

He revealed the company was aiming to be operation in 14 states by the end of the year.

That goal is not far off. However, King continued to emphasize the company would take things slow with a long-term vision. It’s something he has often stressed over the past year’s beta-testing rollout.

“We have a ten-year plan that focuses on the customer and not market share,” King said in the latest press release.

“We are going to acquire customers efficiently, allowing us to return savings to customers by investing in the customer experience at Fanatics Sportsbook and PointsBet, a Fanatics Experience.”

Approvals Required

Further enhancing its platform, Fanatics also revealed it plans to incorporate Banach Technology’s risk management platform and trading models into the Fanatics Sportsbook app.

This integration aims to elevate its live in-game betting capabilities, a feature that has been growing in popularity among sportsbooks and U.S. bettors.

While the current acquisition covers eight states, Fanatics has broader aspirations.

Regulatory challenges persist, as transferring licenses from PointsBet to Fanatics requires state approvals. In states like Indiana and Illinois, the PointsBet platform will continue its operations until Fanatics obtains the necessary permissions.

The future of PointsBet’s top executives post-acquisition has also been a topic of interest.

It’s confirmed that Johnny Aitken will retain his role as the CEO of PointsBet USA.

Despite parting with its U.S. assets, PointsBet will maintain its operations in Canada, with plans to reach a financial break-even point by mid-2024.