Andrea Ellis has been appointed CFO of Fanatics Betting & Games.
Fanatics is moving a step closer to launching its long-awaited sports gambling division, nearly five years after the Supreme Court struck down a rule preventing states from legalizing betting on sporting events.
The sports platform and e-commerce company, which is valued at more than $27 billion, announced Tuesday that it has hired Andre Ellis to be the chief financial officer of its betting and gaming division. Fanatics CEO Michael Rubin said last week that the company expects to launch the unit in January.
Fanatics are entering a crowded market in an uncertain economy at a time some executives say is ripe for consolidation. Still, Rubin is betting that the company’s e-commerce success will translate to sportsbook customers.
Ellis brings technology, product and operations expertise to the Fanatics executive team. For the past two years, she worked as a financial director at Lime, the largest company for the sale of electric scooters and bicycles. She previously worked with Restaurant Brands, owned by Burger King.
At Fanatics, she will be tasked with growing the new division and providing strategic and operational leadership, the company said.
She will report to Matt King, CEO of Fanatics Betting and Gaming, who previously served as CEO at FanDuel. “We are thrilled to welcome Andrea to our team as we move one step closer to officially launching a new, dynamic online sports betting and gaming product for fans,” said King.
A January launch would coincide with the highly lucrative NFL playoffs. By the time football season starts next fall, Fanatics anticipates being up and running everywhere it’s legal to do business.
“We’re going to be in every major state except New York, where you can’t make money,” Rubin said at the Sports Business Journal’s World Sports Congress event. Last fall, Fanatics applied for a mobile betting license in New York but was not selected.
Rubin predicts that Fanatics’ sports betting and other business segments “could be $8 billion in revenue, even in the next decade.”
With more than 50 sports betting operators popping up in recent years, led by Flutter-owned FanDuel, DraftKings, Caesars and BetMGM (co-owned by MGM Resorts and Entain), Fanatics are late to the party. The battle for market share is intense and the first sportsbooks to receive a license often say they see a 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 is not inconceivable to think that the first two or three [operators] will control somewhere between 60, potentially 70% of the market,” she added.
DraftKings co-founder and CEO Jason Robins said size will matter.
“I think you’re going to continue to see the benefits of expanding the way Amy’s [Howe] company is doing and mine are becoming more apparent as more states develop and more revenue comes through the industry,” he told CNBC’s Gaming Industry Conference.
The size and scale make Fanatics an unlikely future competitor, even in the eyes of the current market leaders. Thanks in large part to his extensive business network and Fanatics’ database of 94 million clients, 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 his network by using a loyalty program across all of its businesses, according to Rubin: “You’re buying merchandise? You’re incentivized to play a game. You’re gambling? You’re incentivized to get a collectible.”
“Patience saved us money,” Rubin said. “I’d rather let everybody waste their brains and then have to make money, then come in with a big checkbook and spend money when nobody else can.”
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