Sports merchandise leader Fanatics is closing in on a deal to acquire a sports betting company as part of its expansion plans.
Fanatics officials refused to comment on the issue but industry sources say that meetings with Rush Street Interactive (RSI) and Swedish gaming company Betsson had positive results and Fanatics is likely to end up buying one of the two.
Rush Street Makes Sense
For Fanatics, Rush Sense makes sense. Despite having presence in 10 states including Illinois, New Jersey, and Pennsylvania and being among the Top 5 online revenue grossers, RSI has the weakest brand among companies of the same size. This means that they can change their name to an acquiring company like Fanatics.
There are also rumors that RSI is in the driver’s seat to land the rights to ESPN’s name in sports betting. The Wall Street Journal recently reported that ESPN was looking to sell its name to a sports betting package for $3B. That is supposedly one of the reasons why RSI worked to get the third skin in partnership with the Connecticut Lottery after DraftKings and FanDuel partnered with the state’s two Native American tribes.
On the other hand, Betsson has an excellent iGaming product but it does not operate in the United States and would be more of a back-end technology for Fanatics.
Fanatics Has Tripled its Value
Last month, it was reported that Fanatics had tripled its value to $18B over the past year. The company was valued at $13B last March before receiving a $325M funding from its existing owners while also adding funds from new investors like Jay-Z’s Roc Nation, SoftBank, Silver Lake , Eldridge, TWG Sports & Entertainment, MLB, and Insight Partners.
The company said that the additional funding would be used to transition from a vertical commerce company to an international digital sports platform while expand its technological and consumer databases to integrate new markets such as NFTs, gaming, media, and sports betting.
Before venturing to other businesses, Fanatics acquired some assets, inventory, and college licensing rights of Vetta Brands, including the Top of the World division. Last year, Fanatics also purchased the licensed sports merchandise company WinCraft.