Fanatics Could Bet Big On BetParx To Enter Maryland Online Sports Betting

Written By David Danzis on January 30, 2023 - Last Updated on February 14, 2023
Fanatics Looks To Acquire BetPARX

In less than five years, legal online sports betting has spread across the U.S., with a handful of companies seizing control of most major markets.

Maryland is one of 32 states offering some form of regulated sports gambling. Even though it is among the newer entrants, MD could become another battleground among the winners and losers in the ultra-competitive online sports betting landscape.

Major shakeups within the legal sports betting industry are rare. However, the industry is still maturing, and most experts believe it’s only a matter of time before the whales start swallowing minnows.

Fanatics Sportsbook, BetParx both MD players — for now

By chance, Maryland online sports betting already found itself amid industry scuttlebutt.

The very day that Fanatics Sportsbook debuted its retail sportsbook inside FedEx Field, CNBC reported that the merchandising and apparel company was exploring the idea of buying a rival operator. According to the story, Fanatics is in the process of purchasing the online sportsbook BetParx from Greenwood Entertainment & Racing.

Both Fanatics and BetParx are licensed to operate online sportsbooks in Maryland. Neither has launched yet.

Representatives for Fanatics and BetParx are not commenting on the reported deal. However, in a recent interview with Pressbox, Maryland Lottery Director John Martin confirmed something may very well be in the works:

“Fanatics is very new to the industry, yet they’re now making an overture to acquire the BetParx sportsbook.”

Some background on Fanatics, BetParx

Fanatics Betting & Gaming, the subsidiary of Fanatics that oversees its sportsbook, is still basking in its milestone of being the first operator inside an NFL stadium. Fanatics Sportsbook originally intended to unveil its online sportsbook in the first quarter of 2023, though an acquisition could skew these plans slightly.

The sportswear and memorabilia company claims to be the world leader in officially licensed merchandise. Its brand recognition and substantial financial resources could make Fanatics Sportsbook a serious player in a crowded market.

Meanwhile, BetParx is the digital brand of a regional gaming operator. Pennsylvania’s Parx Casino is the second-highest-grossing gambling hall in the Keystone State. BetParx is also available in New Jersey, Ohio and Michigan.

Entering the online sports betting arena is like trying to ice skate uphill

How could a first-time gambling operator be in a position to buy out a more seasoned competitor?

Well, BetParx is one of a handful of online sports betting apps that are struggling to keep pace with industry leaders. FanDuel, DraftKings, BetMGM and Caesars dominate the online sports betting space in nearly every legal jurisdiction. Although it varies month-to-month, the four major operators control anywhere from 65%-90% of the legal U.S. market.

Second-tier online sportsbooks, such as PointsBet and Barstool, hover around 5% market share.

More than a dozen others are less than 1%, including BetParx.

Fanatics CEO Michael Rubin, a billionaire with a reputation as an aggressive businessman, likely sees an opportunity to simultaneously shrink the pool of competitors and make an early splash.

Last year, it was reported that Fanatics (not yet licensed to operate in any legal sports betting jurisdiction) was looking to buy Tipico, another operating in the less-than-1%-market share group.

How many are too many online sportsbooks in Maryland?

Maryland’s sports betting law allows for up to 60 mobile licenses. The odds of that many operators successfully operating at any given time are very long.

The intent of the law’s provision is to create more opportunities for small businesses and minority owners to enter the sports betting space.

However, the high cost of player acquisition and retention combined with eventual market saturation means Maryland may have to rethink its goals. Even before Maryland gambling regulators could consider issuing up to 60 licenses, the pool of interested operators will shrink.

Martin, the state’s top gaming regulator, offered his predictions on the industry’s next few years, saying:

“So, I think you’re going to see, certainly over the next 12, 18, 24 months, you may see a further acquisition mode of some of these people trying to gobble up some market share. And eventually, I think that’s the long game.”

The potential Fanatics/BetParx deal is one of several likely upcoming M&A deals where Maryland will have a role. Here’s what Martin had to say:

“I don’t know that you can be sustainable with 15, 20 different sportsbooks in the state of Maryland. I think you’re going to see some acquisition over time. And it’s literally started this week, in terms of making the announcement. But we certainly have a long way to go before that gets resolved.”

How these buyouts and corporate mergers affect the average Maryland sports gambler or the overall market is something to keep an eye on.

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David Danzis

David Danzis is a lead writer and analyst for Catena Media's network of Play sites, appearing on PlayNJ, PlayCA, PlayOhio and PlayMaryland. He is a New Jersey native and an honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. After years of reporting on Atlantic City casinos, NJ online gambling and sports betting, his focus is now on emerging gaming markets. David lives in Mays Landing, NJ with his wife and two children. When not on the beach, golf course, or the slopes, David enjoys watching his beloved New York sports teams — Yankees, Jets, Rangers, and Knicks.

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