Somewhat lost among the big news in NY sports betting is the uncertainty over when Fanatics Sportsbook will be available in New York and elsewhere in the United States.
Fanatics purchased PointsBet’s U.S. assets earlier this summer, but that doesn’t necessarily mean the company can simply assume operations in states where it was licensed.
Last week, PENN Entertainment announced a mammoth 10-year agreement with ESPN worth nearly $2 billion that will result in a sportsbook called ESPN Bet. Late last week, WynnBET revealed that it will cease operations in eight states, and evaluate its business in two others, including New York.
While Barstool and WynnBET exit or fade away in the marketplace, Fanatics is poised to enter the fray. But, one New York regulator says the state can’t simply rubber stamp the shifting of the PointsBet license to cover Fanatics Sportsbook.
“While the [Fanatics purchase of PointsBet NY], a corporate buyout, does not require a transfer of licenses, the commissioners here today are convinced that since its effective control of a license has transferred to a new entity, that increased scrutiny of this license holder is necessary,” says New York State Gaming Commission Chairman Brian O’Dwyer.
When the NYGS will decide to grant or transfer a sports wagering license to Fanatics is unclear, but it could occur in September.
Fanatics Sportsbook launch uncertain in many states
Any new sports betting app wants to be online for the beginning of football season. The National Football League and college football seasons start around Labor Day. But, it’s difficult to see how Fanatics Sportsbook could be vetted, approved and launched by then.
According to Chairman O’Dwyer, New York sports betting regulators will “require Fanatics to undergo a thorough examination of character and fitness to operate the license.” He went on to say in a recent meeting that his commission would likely take up a decision during its September session, which typically occurs later in the month. That means Fanatics Sportsbook probably won’t be on the list of New York sportsbooks in time for Week 1 of the NFL or college football seasons.
Given the likelihood that ESPN Bet will be in New York, perhaps as early as November, it’s probable that Fanatics wants to wade into the New York sports betting market. The possibility for success is enticing: New York passed the $25 billion mark in total handle quicker than any state in history.
However, doing business in New York is expensive. Each sportsbook must pay $25 million simply to apply for a license, and the tax rate on adjusted revenues is 51%. That’s great for Albany and the state coffers, but may not be sustainable for the operators long term.
Given the comment from O’Dwyer which indicates that the NYSGC may not vote on a Fanatics license application or transfer until September, we can’t be sure when the new sportsbook will be available in the Empire State.
What does this mean for PointsBet NY customers?
With PointsBet NY to be replaced by Fanatics Sportsbook, it’s natural to wonder when and how customers of that sports betting app will be handled.
PointsBet’s U.S. business will cease to operate by late-fall, according to that company and Fanatics. Undoubtedly, PointsBet account holders will be given a deadline for withdrawing funds. Typically, if funds are not emptied from an online account, checks will be mailed to customers. Fanatics will likely also issue a final date when wagers can be accepted.
If the PointsBet to Fanatics transfer happens like other similar mergers and acquisitions, we’d expect users to have to create new accounts with Fanatics Sportsbook when it’s available. Often, a trial period will be used to test the new sportsbook before it’s available to the entire public.
It’s notable to point out that Fanatics previously applied for but was denied a sports wagering license for New York. In neighboring New Jersey, regulators are preparing a transfer process to move the PointsBet license to cover Fanatics.
The only states where the Fanatics sports betting app is available are Maryland, Massachusetts, Ohio and Tennessee. In those cases, it’s available to limited customers.