Matt King, former CEO of FanDuel and now the head of Fanatics Betting and Gaming, is looking to repeat his success. He’s not looking to follow in the footsteps of his former employers when he takes over Fanatics Betting and Gaming. Instead, Spotify is what inspires him.
Matt King is the chief executive of Fanatics Betting and Gaming. He is not tasked with building a market-leading company. Matt King has already achieved this during his time at FanDuel. The company currently holds a market share that is unassailable in the US. Under his leadership, revenue grew by over $1bn.
His core goal isn’t to create an entity that can compete with a behemoth created by him. The billion-dollar problem is how to create something that can provide a genuine option for consumers.
He wants to grow Spotify in a market that is dominated by iTunes.
Fanatics – Officially licensed everything
The parent company is what sets Fanatics Betting and Gaming apart from other disruptors. You probably own Fanatics products without knowing it.
Fanatics, which is valued at $27bn following a $1.5bn round of funding in 2022 has grown exponentially over the past few years. Media reports claim that Fanatics’ revenue topped $6bn in 2018.
The company’s operations are vast and include trading card specialists Topps, as well as headwear manufacturers Lids, and sporting goods specialists Mitchell & Ness. The tagline, “officially licensed” is not just a slogan. As a result, Fanatics has around 95 million sports enthusiasts in its database.
This would seem to provide a similar edge in terms of competition to the daily fantasy operators who currently dominate US sports betting. It is expected that this will reach beyond the existing bettors and reach a high-volume, low-stakes audience who haven’t engaged in wagering. Only King believes it is possible to create a business that targets a specific cohort.
He says, “I believe it’s a false dichotomy.” “One of our crutches as an industry is the fact that there are people who are used to gambling and people who are not.”
He wants to target the market with something different. Spotify was the obvious inspiration.
King explains that “[They] grew through capturing people who were already streamers.”
They did it because they created a product that was incredibly powerful and intuitive. It was easy to use for those who were familiar with streaming and it was also easier to use for those that weren’t.
A great product is both product and design.
It is certainly helpful to be able to build the core proposition from scratch.
By using Amelco’s source code, Fanatics Sportsbook is available for iOS and Android. The apps are more responsive and take advantage of features that each operating system offers.
A strong product, with the support of an expert trading team and PointsBet US subsidiary Banach’s trading and pricing is not enough. The design of a sportsbook is also a major factor in its success or failure.
King, speaking onstage earlier this month at the SBC North America Conference, said: “We have had a good design since day one.” “Someone explained to me many years ago that a great design is also a product.
“Most product managers are biased towards adding more features. But the best products represent the most simplified way to accomplish what customers want to do.
“That’s the reason Apple works so well. It can do a great deal, but it does it in a simple and intuitive manner. This is a combination of design thinking and a great product. It’s much easier to achieve that balance when you start from scratch.”
New perspectives on sports betting
His top team is made up of a diverse group. There are indeed industry veterans from Sky Betting and Gaming, Sportradar, Sky Betting and Gaming, The Action Network and FanDuel.
Then there are the executives of electric transportation company Lime, MTV Entertainment and meal delivery giant DoorDash. King estimates it to be a 60/40 split with the industry insiders in the minority.
He says that Fanatics Betting and Gaming has the “luxury”, of being the second mover on the US sports betting markets. The company strikes a good balance between the experience of industry and new perspectives from consumer technology companies, giving them new ways to solve problems.
King: “I believe that diversity of perspectives will unlock better thinking and some different thoughts.”
Can new eyes help to break the tension between innovation and speed?
He continues that sports betting requires new thinking as the industry has not had time to breathe since 2018. Currently, 35 states have some type of legal betting. According to H2 Gambling Capital, the market is expected to reach $23.2bn in 2030.
King: “I thought the pace of legislative change was quite fast, probably faster that we anticipated.” “I’m surprised that there is a tension between innovation and moving fast.
When you look at digital categories in the US or other countries, there is a lot more disruption and reinvention. Because sports betting is so established in other countries, I believe that a lot of the innovations we have seen are bringing international best practices into the market and focusing on moving fast.
Innovating will be the key to growth in the future.
He says that the US betting industry’s satisfaction scores are lower than those of other categories. “We, as an industry, have a gap in satisfaction that we need to close if want to be seen as a category on par with consumer technology.”
The ultimate goal of Fanatics is to create something that can compete with the best consumer technologies. King explains that “we’re building a digital sports platform broader than just football.”
“Because we have a larger ecosystem, we can look at things from a longer-term perspective.” We’ve taken advantage of the time-savings that come with being able build a quality product, without worrying about scaling early on, as opposed to a first mover.
Not a gaming brand but a sports brand
It is important to distinguish between a digital sports platform, and a platform for sports betting. Fanatics Betting and Gaming may become the market leader. Many people believe that it already has everything it needs to succeed. But Fanatics, the name on the door, is only a small part of the puzzle.
King believes that Fanatics Betting and Gaming could have the biggest asset. It is a larger ecosystem, of which betting is a part. In the US, many are trying to create a connected ecosystem through media, entertainment, or other consumer products. Fanatics is a leader in multiple categories.
He says, “We are a sports brand and not a gaming one.” “That gives us an advantage with consumers and brand permission to do things other people cannot do.
“I think that it’s more than just being able to create an ecosystem. It’s about having a brand that resonates and allows you to deliver it to consumers in a compelling manner.”
It is certainly helpful to have a database with 95 million sports fans that you can target for little or no cost. It is a very different thing to serve that audience than embed betting in that ecommerce eco-system.
Surprise your senses
Sky Betting & Gaming is the only industry that can be compared, as it has built a thriving company with a mass-market, casual customer base. How? King says that it’s more about segmentation than targeting. They were extremely customer-focused. They were very good at creating a sportsbook for all types of customers.
He adds, “They were then able to build a new acquisition model with Sky that allowed them be profitable even with low-stakes clients.” It’s not that the business is totally focused on casual customers.
They were able build a unique model of business and, more importantly, had a product, and an organization, which was incredibly customer-centric. They built a better experience for their customers.
A large collectibles company is a plus. Fanatics Betting and Gaming will send a signed jersey to a customer who has placed a large bet on a player. King says that it is a relatively low-cost experience for the company, but a game changer for fans. “These are the kinds of experiences that we can only create at scale.”
Every transaction is rewarded with Fan Cash. Every time they wager, they earn Fan cash, which they can use to purchase merchandise or collectibles. Conversations are already underway about adding brands other than the Fanatics to that ecosystem.
We can provide a unique consumer experience because we are part of Fanatics. Our business model is fundamentally different.
Retail Rollout
Retail is still a viable option in this new business model. This is a natural thing for a retailer that operates stores for brands like MLB and NBA. Not to mention, events such as the MLB All-Star Game and NBA London Games.
Fanatics currently operates the only NFL in-stadium betting facility, located at Washington Commanders FedExField (Maryland). King sees retail as “funded marketing”.
He explains, “It is a manifestation and expression of the Fanatics Brand, so it’s very important. And for many customers, that touch and feeling is very important if Fanatics has 50 different retail locations in venues.”
Retail is a key part of the puzzle.
Accelerating Fanatics expansion through M&A
The mobile market will continue to grow, just as it has in the sports betting industry. For existing customers who have an access code, the Fanatics Sportsbook App is now available in Ohio and Tennessee for iOS and Android. Mobile will be available in Maryland and Massachusetts on 5 June.
King’s new ideas will be made available to a wider audience thanks to PointsBet US.
The agreement provides access to licenses for sports betting in 12 states. These include major betting and gaming hubs such as New York City, New Jersey and Pennsylvania.
Banach Technology is a trading specialist that enhances the core product. NBC Sports, a division of NBCUniversal, also has partnered with NBC.
King says that while this certainly speeds up his plans to launch the Sports Betting Spotify, he insists it is not a rush. He says that a second mover can take the time to evaluate what works, and then act accordingly.
“I have been in this business for 10 years.” He says it’s a “long-term game”. “We can launch states whenever we like. “I have all the states at my disposal, and I can roll them out whenever I want.”
We’ve yet to see his approach to online casino. It’s Fanatics Beting and Gaming, after all. King can prove its ability to compete in both verticals by accessing Michigan, New Jersey and Pennsylvania.
King keeps it simple. “I think there will be a lot the same themes,” says King of Fanatics icasino. “[Making] a product that is as powerful and accessible as those already available, but simpler.”
Consumer technology disrupts betting and gaming
King’s entrepreneurial spirit is what drives him to implement these plans. King says that when FanDuel acquired by Flutter his exit was always an option.
He was able to accomplish two things by joining Fanatics. First, he wanted to create something entirely new. Two, disrupting the betting industry with consumer technology.
He admits that a lot of it comes from his experiences at FanDuel, and during his career prior to taking over the business.
“But it’s fundamentally a different approach. It’s an entirely different business model. It’s about figuring out what the new opportunities are and how the world is changing. The idea of building a digital platform that has a wider reach is different.
How do you adjust a strategy based on the lessons learned? We’ve been working with a completely new type of problem. It’s important to have prior experience, but you can’t just copy and paste and do the same thing.
The idea is not to do it all over again. It’s more about the chance to do it in a different way.
