Andrea Ellis has been appointed CFO of Fanatics Betting & Gaming.
Source: Fanatics
Fanatics is getting one step closer to launching its highly anticipated sports-gambling division, nearly five years after the Supreme Court overturned the rule preventing states from legalizing bets on sporting events.
The sports platform and e-commerce company, which has been valued at more than $27 billion, said Tuesday it hired Andrea Ellis to be the chief financial officer of its betting and gaming division. Fanatics CEO Michael Rubin said last week the company expects to launch the unit in January.
Fanatics enters a crowded market in an uncertain economy at a time some executives say is ripe for consolidation. Yet Rubin is betting the company’s e-commerce success will translate into sports-betting customers.
Ellis brings expertise in technology, products and operations to the Fanatics executive team. She worked as CFO at Lime, the largest electric scooter and bike share company, for the past two years. Previously, she worked with Burger King owner Restaurant Brands.
At Fanatics, she will be tasked with scaling the new division and providing strategic and operational leadership, the company said.
She’ll report to Matt King, Fanatics Betting and Gaming CEO, who previously was CEO at FanDuel. “We are thrilled to welcome Andrea to our team as we inch closer to formally launching a new, dynamic online sports-betting and gaming product for fans,” King said.
A January launch would coincide with the very lucrative NFL playoffs. By the start of football season next autumn, Fanatics anticipates being up and running everywhere it’s legal to do business.
“We’ll be in every major state other than New York, where you can’t make money,” Rubin said at a Sports Business Journal World Congress of Sports event. Last fall, Fanatics applied for a mobile-betting license in New York, but was not selected.
Rubin predicts sports betting and Fanatics’ other business segments “could be $8 billion, even in the next decade, in profits.”
With more than 50 sports-betting operators emerging in recent years, led by Flutter-owned FanDuel, DraftKings, Caesars and BetMGM (co-owned by MGM Resorts and Entain), Fanatics is late to the party. The fight for market share is intense and the first sportsbooks to get licensed frequently say they see first-mover advantage.
FanDuel CEO Amy Howe told CNBC at the Global Gaming Expo this month that she thinks it’s only a matter of time before the industry consolidates.
“It’s not inconceivable to think that the top two or three [operators] will drive somewhere between 60, potentially 70% of the market,” she added.
DraftKings co-founder and CEO Jason Robins said size will matter.
“I do think that you’ll continue to see that the advantages of having scale the way Amy’s [Howe] company does and mine are more and more apparent as more states roll out and more revenues coming through the industry,” he told CNBC at the gaming industry conference.
Size and scale make Fanatics a formidable future competitor, even in the eyes of the current market leaders. Thanks in large part to his wide business network and Fanatics’ 94 million customer database, Rubin was able to raise an additional $1.5 billion in March with investments from Fidelity, BlackRock and Michael Dell.
Fanatics plans to tap into its network by using a loyalty program across all of its businesses, according to Rubin: “You buy merchandise? You’re incented to game. You gamble? You’re incented to get a collectible.”
“So our patience saved us money,” Rubin said. “I’d rather let everyone spend their brains out and then have to make money, then I come in with a big checkbook and I’m spending money when nobody else can.”
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