Andrea Ellis has been appointed CFO of Fanatics Betting & Gaming.
Fanatics is one step closer to launching its much-anticipated sports betting division, nearly five years after the Supreme Court overturned the 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 Andrea Ellis as 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 when some executives say it’s ripe for consolidation. Still, Rubin is betting that the company’s e-commerce success will translate into sports betting customers.
Ellis brings technology, product and operations expertise to the Fanatics leadership team. She has worked as CFO at Lime, the largest electric scooter and bike sharing company, for the past two years. She previously worked with the owner of Burger King restaurant brands.
At Fanatics, she will be tasked with scaling the new business and providing strategic and operational leadership, the company said.
She will report to Matt King, CEO of Fanatics Betting and Gaming, who was previously the CEO of FanDuel. “We are very pleased to welcome Andrea to our team as we move closer to the official launch of a dynamic new online sports betting and gaming product for fans,” said King.
A January start would coincide with the very lucrative NFL playoffs. By the start of the football season next fall, Fanatics expects to be operational wherever 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 an event hosted by the Sports Business Journal World Congress of Sports. Last fall, Fanatics applied for a mobile betting license in New York but was not selected.
Rubin predicts that sportsbook and Fanatics’ other businesses “could generate $8 billion in profits even over the next decade.”
With more than 50 sportsbooks that have sprung up in recent years, led by flutter-own FanDuel, DraftKings, Caesars and BetMGM (jointly owned by MGM Resorts and Contain), Fanatics is late to the party. The battle for market share is intense and the first sportsbooks to be licensed often say they see the first party advantage.
FanDuel CEO Amy Howe told CNBC at this month’s Global Gaming Expo that she believes it’s only a matter of time before the industry consolidates.
“It’s not inconceivable to think that the first two or three [operators] will be somewhere between 60% and possibly 70% of the market,” she added.
DraftKings co-founder and CEO Jason Robins said size will matter.
“I think you will continue to see the benefits of scaling like Amy [Howe] Business and mine are becoming more apparent as more states are formed and more revenue comes through the industry,” he told CNBC at the gaming industry conference.
The size and scale make Fanatics a formidable future contender, even in the eyes of the current market leaders. Thanks in large part to its broad 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.
According to Rubin, Fanatics plans to leverage its network by deploying a loyalty program across all of its stores: “You buy goods? you want to play you play?
“So our patience has saved us money,” Rubin said. “I’d rather let everyone spend their brains and then have to make money, then I’ll come in with a big check book and spend money when nobody else can.”
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