Fanatics CEO Michael Rubin is planning to more than double advertising spending for the company’s sports betting unit, committing nearly $1 billion to take on established market leaders.
The aggressive push targets DraftKings (DKNG) and FanDuel parent Flutter Entertainment (FLUT), both of which have dominated the online sports betting landscape for years.
Rubin told Bloomberg that success in Fanatics’ sports merchandise and collectibles business will help push total company revenue to $14 billion.
Of that projected revenue figure, approximately $2 billion is expected to come from the sports gambling unit, which Fanatics entered relatively recently in 2023.
The betting expansion arrives against a complicated cultural backdrop, with growing public concern about gambling addiction, particularly among younger people.
Despite those concerns, the broader industry shows no signs of slowing, with prediction markets also entering the fray and adding to what analysts are describing as a wave of betting activity.
Rubin, whose company remains privately held, pushed back on any suggestion that competitive pressure or public scrutiny should deter further investment in gambling.
When pressed by an interviewer on why he would increase spending in such a difficult space, Rubin offered a straightforward answer: “I like going somewhere someone’s like, that’s a bad spot to go in. He’s like, I like to go in those spots.”
Rubin also acknowledged the intensity of the competitive environment directly, saying on the betting and gaming side, “that business is the most competitive business we play in today.”
On the question of prediction markets, he offered a cautious but telling observation, saying “we think the regulatory environment is unlikely to be as it is today,” signaling expectations of regulatory change ahead.
Rubin also stated he is under “zero pressure, less than zero pressure” to take Fanatics public, giving him unusual flexibility to absorb losses in a high-risk market.
The regulatory landscape remains one of the most pressing concerns for the entire industry, with several major states still navigating the boundaries of legal sports gambling.
Florida and California, states that many industry insiders believed would never open their doors to legal betting, have both moved in that direction, though some efforts to walk back that access are reportedly underway.
The core Fanatics merchandise business, which commands significant market share in jerseys, t-shirts, and hats, continues to perform strongly, raising questions about the strategic logic of entering one of the most competitive sectors in consumer finance.
