Fanatics Casino & Sportsbook CEO says he is “absolutely” confident in brand’s industry potential. Sitting alongside CNBC ‘Squawk Box’ hosts, Rebecca Quick, Joe Kernan and Andrew Ross Sorkin, at a roundtable in the heart of New York City, Fanatics CEO Michael Rubin outlined unwavering confidence for the firm’s sportsbook brand.
Rubin’s conviction is evident from the outset; when asked whether a hypothetical 1999 version of himself would have believed that his organization could become a modern sports betting titan, the 53-year-old replied in no uncertain terms:
“Yeah, absolutely.”
Such unabashed favor for his still-fledgling US sports gambling operator is to be expected. Having founded Fanatics as an apparel group in 2011 to pronounced success, Rubin stands as a firm backer of sportsbook-focused expansion.
Using results throughout “the rest of the world” as a signal for today’s triumphant US sports betting scene, Rubin maintains that a marriage between competitive sports and online gambling was virtually inevitable.
“I think it was only natural that a market that was big and vibrant, but illegal here, would migrate to a much legal and safer approach. I’m honestly surprised how long it (legal sports betting) took.”
Fanatics now “third-biggest” sportsbook in the US
On the nation’s failure to legalize sportsbooks while other regions flourished during the 1990s, Rubin steadfastly believed in its domestic potential: “It’s (sports betting) got to make sense. It’s got to come to the US.”
Now, according to Rubin, Fanatics stands as America’s third-largest sportsbook enterprise – only lagging behind behemoths FanDuel and DraftKings. And, without being prompted for figures, he announced that “we (Fanatics) are the fastest growing sportsbook in the US.”
Rubin accuses rivals of “copying” Fanatics products
Ingenuity represents a core facet of the Fanatics Sportsbook product – and the firm’s ‘Fair Play’ innovation has received plaudits for allowing wagers to remain open even if a player involved in a prop bet drops out of the game.
That facility saw Fanatics lose $1.5m within one week, says Rubin, who stands behind a player-first mantra.
But creativity in the 2025 market is not without commoditization – a fact for which Rubin is all too aware: “Now, competitors are copying us. DraftKings, they copied us.”
Not one to hold bitter grudges, Rubin affirms that both DraftKings and FanDuel have assembled “great” franchises.
Market share is on the up, but significantly short of competitors
Fanatics has made rapid headway since debuting its sportsbook product two years ago and now holds 8% of the US market. In comparison, FanDuel and DraftKings dominate – gripping a cumulative 70%.
But only Fanatics boasts a 100% year-on-year market share increase. For context, in 2024, the operator’s domestic coverage stood at 4%.
Much of this incline has come by virtue of pinching customers from smaller organizations, says Rubin: “I think some of the smaller competitors have been easier to take from.”
“Different and better” central to Fanatics’ vision
Entering a new market as an existing entity always carries significant risk. Fanatics addresses this issue by delivering a unique value proposition to all players: Fan Cash.
As outlined by Michael Rubin during his Squawk Box interview, “Every time you bet with Fanatics, win or lose, we give you Fan Cash that you can use to make other bets, you can get merchandise, you can get trading cards.”
This specialized currency system encourages player acquisition and retention – and the financial hit to Fanatics is worth it, for the time being.
“We’re going to give out about $1bn of Fan Cash next year,” says Rubin, who acknowledges that “we (Fanatics) run at a little bit of a lower margin” when it comes to customer acquisition cost.
Rubin also confirmed that more than half of Fanatics’ 120 million players “know about the sportsbook” – implying healthy cross-product impact.
Is profitability a concern?
As sports betting continues to find its feet in the US, operators push to uncover new pathways toward profitability. Even for the nation’s most prominent sportsbooks, the road has not always been smooth.
Rubin uses both DraftKings and FanDuel as prime examples of the industry’s capacity for tangible yield: “DraftKings, you know, two years ago they were losing half a billion or a billion dollars. This year, they’re going to make $900m. I think FanDuel is going to make $1.25bn this year.
“These companies have very quickly swung from tough businesses to very good businesses.”
So, what is the realistic outlook for Fanatics’ sports betting vertical?
The answer resides within the platform’s decision to launch in 2023, some two years after Rubin suggested joining the fold. In 2021, Rubin says operators fell victim to an “illogical” and “ridiculous” market.
Biding its time, Fanatics chose to onboard former FanDuel figurehead Matt King as CEO for Betting and Gaming; a monumental hire for an up-and-coming brand.
Patience gave license to enhanced market opportunities – and Rubin believes that the current scene is more logical than ever before. Doubling down on this point, the longstanding Fanatics CEO expresses that “the market is just getting going.”
The same is true for Fanatics itself, as Rubin explains that the operator’s five-year plan includes significant sports betting strength: “When we look at our five-year plan, we have gaming being 40% of our profits. We are very bullish about that.”
Short-term pain for long-term gain…
As things stand, Fanatics Sportsbook is not a profitable endeavor. Michael Rubin verified as much while speaking to Squawk Box – disclosing that the company has spent $1.5bn since launch.
On specific losses, Fanatics expects to operate at a $300m deficit this year and endure a $150m bleed in 2026.
But, in 2027, Rubin anticipates making “several hundreds of millions of dollars.”
Expenditure must not be ignored when evaluating Fanatics’ road to profitability. In-house forecasts showcase that the operator will put down $2bn before entering the black; according to Rubin, FanDuel and DraftKings exhausted $6bn to $7bn to become viable.
“They built great businesses, but they spent a lot more to do it.”
Fanatics’ sports betting roadmap has now been set, and whether the operator meets its relatively low-investment-to-high-profitability target remains to be seen.
All will become clear within two years.
