Fanatics CEO Michael Rubin has revealed plans to spend as much as $1bn on US gambling marketing in 2027, almost three times this year’s $350m, as the operator tries to close the gap on US market leaders DraftKings and FanDuel.
In an interview with Bloomberg, Rubin admitted Fanatics Betting & Gaming is still “a distant number three” in the US, although its market share has grown to more than 10% since launching its sportsbook in 2023.
“We’re going to spend a lot more money in marketing next year than we had thought we were going to spend because we’re saying, ‘how do we close the gap, and how do we really grow our market share?’” he said.
He noted the figure could land between $800m and $1bn.
The increase comes as Rubin conceded the US online betting market has become far tougher. He pointed to three “very negative dynamics”:
- Revenue per state has hit a wall in mature markets such as Pennsylvania, New Jersey and New York
- New states are regulating more slowly than expected
- Prediction markets such as Kalshi and Polymarket have grown rapidly
“Is it much harder today than it was a year ago? Absolutely,” he said. “FanDuel and DraftKings competed with themselves two years ago. Now they have Fanatics, Kalshi and Polymarket. All the marketing costs are up.”
Fanatics launched its own prediction markets platform, Fanatics Markets, in December, but Rubin warned of “a very tough road ahead for everybody”, from traditional sportsbooks to event contract platforms. He speculated the regulatory environment is “unlikely to be as it is today”.
Rubin said being a private company is a key advantage, as Fanatics can channel profits from its merchandise and collectibles divisions into its betting unit, which is still losing money.
The group expects revenue to rise 40% to around $14bn this year. Roughly $2bn of that will come from betting and gaming, $7bn from licensed merchandise and $5bn from collectibles and trading cards.
It also expects $2bn in free cash flow this year, with around $1bn in net cash and no debt.
Rubin partly credited the sportsbook’s growth to its FanCash loyalty scheme. Customers earn ‘FanCash’ on every bet, win or lose, and can spend it across the Fanatics ecosystem. He said the betting business alone will generate more than $1bn in FanCash this year.
Cross-selling is still at an early stage. CFO Glenn Schiffman, who also spoke to Bloomberg, said about 3% of the group’s 22 to 23 million annual customers buy from more than one Fanatics business.
“Those customers spend five times as much as a single business customer, and they repeat anywhere from one-and-a-half to three times as much. We’re really seeing the network effects kick in,” the finance chief said.
Rubin, who owns 31% of Fanatics, ruled out a stock market listing in the near to medium term. “I want to be number one in everything that I’m doing,” he said. “And we have the cash flow generation from other businesses to fund any of these new things we’re doing.
“We don’t think there’s another company thinking about building a digital sports platform for hundreds of millions – or over time billions – of sports fans globally. We’re the only company in the world that’s maniacally focused on it,” he added.
A recent investment saw Fanatics launch an “all-in-one” app that houses all its product offerings. Fanatics Sports & Casino combines Fanatics Betting & Gaming’s sportsbook, casino and prediction markets platform “coast to coast” in states including California, Florida, New York and Texas
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CEO Michael Rubin admits the US market is “much harder” than a year ago, but says Fanatics’ other businesses give it the funds to chase DraftKings and FanDuel
The post Fanatics aims to nearly triple gambling marketing spend to $1bn in 2027 first appeared on EGR Intel.