Episode summary
Fanatics CEO Michael Rubin: I fundamentally believe in the sports betting business long term
Summary
Michael Rubin said Fanatics is doubling down on sports betting even as the market gets more crowded and the next couple of years look difficult. He said Fanatics now has closer to 10% market share, but the company still sees betting as part of a larger digital sports ecosystem alongside commerce and collectibles. Rubin argued the business makes sense long term because the company can use its 45 million Fanatics One members across multiple products and cross-promote within one platform.
He highlighted two betting features he says give Fanatics an edge: Fair Play, which removes injured players from bets, and Fan Cash, which he said will exceed $2 billion next year and can be redeemed across merchandise, tickets, collectibles and more. Rubin said the broader economics help fund that push, pointing to a collectibles business that he said will be $5.5 billion this year and a commerce business that will be over $7 billion.
Rubin also described the sports betting market as entering a highly competitive phase, with DraftKings, FanDuel, Fanatics, Polymarket, Kalshi, BetMGM and bet365 all competing for customers. He said he is not sure consolidation will come quickly, but believes the business is still fundamentally attractive over five to 10 years. On litigation, Rubin said Fanatics has faced several suits, but he prefers to fight rather than settle and views the disputes as part of scaling the company.
Key takeaways
- Rubin said Fanatics is closer to 10% sports betting market share, but still views the segment as a long-term opportunity.
- He expects the next couple of years in betting and prediction markets to be very difficult because competition is intensifying.
- Rubin said Fanatics will issue more than $2 billion of Fan Cash next year, which he says boosts customer retention.
- He said Fanatics can fund betting losses with profits from collectibles and commerce, which he said are headed to $5.5 billion and over $7 billion, respectively.
- Rubin said Fanatics would rather fight lawsuits than settle, calling the legal battles part of competing aggressively.
Notable quotes
“I FUNDAMENTALLY. BELIEVE IN THE BETTING AND. GAMING BUSINESS. LONG TERM”
“THE NEXT COUPLE OF YEARS ARE GOING TO BE VERY DIFFICULT WITH NOT ONLY THE BETTING COMPANIES, BUT ALSO THE PREDICTION COMPANIES ALL KIND OF COMPETING FOR THE SAME CUSTOMER”
“WE'RE THE ONLY COMPANY REALLY BUILDING A DIGITAL SPORTS PLATFORM. AND THESE BUSINESSES REALLY WORK AS ONE ECOSYSTEM FOR THE CONSUMER”
“NEXT YEAR, WE'RE GOING TO ISSUE MORE THAN $2 BILLION OF FAN CASH”
“I THINK RIGHT NOW YOU'VE REALLY GONE FROM TWO STRONG COMPANIES IN DRAFTKINGS AND FANDUEL TO REALLY FIVE PEOPLE COMPETING FOR THE CUSTOMERS TODAY”
How the episode opens
With me. Yeah fanatic saying recently it's going to increase its marketing spend in the betting business from $350 million this year to up $1 billion to up to $1 billion in 2027, in a bid to compete with other sports books and prediction markets. Joining us now is the founder and ceo of Fanatics. Michael Rubin joins us on set. How are you doing, michael?
Always great to be with you guys. — Let's try to think of your your, your big move into, into sports betting and how what's really the rationale behind it? Is it just a really good business? Did you think because of all your existing businesses that the synergy is really that positive or because you're spending a lot, you're what, 7% market share now? It's so competitive.
And yeah, we're actually more closer to 10% market share now. — Yeah. But I'd say. — I fundamentally. Believe in the betting and. — Gaming business.
Long term. I think it's very unpopular right now. The next couple of years are going to be very difficult with not only the betting companies, but also the prediction companies all kind of competing for the same customer.
But for Fanatics, we're the only company really building a digital sports platform. And these businesses really work as one ecosystem for the consumer. And, you know, look, we have 45 million members as part of Fanatics one today, we start that loyalty program, the biggest loyalty program in sports we started a few years ago.
And everything we do, we say, how do we make it better for the customer? We started the betting and gaming business. We said, what can we do to be materially better than all the competitors?
And we did two things and they're working really, really well.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- sports betting
- marketing spend
- prediction markets
- going public
- private vs public
Companies and tickers mentioned
- Fanatics
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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