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Fanatics CEO Michael Rubin plans to significantly increase spending on the company’s betting and gaming business as he looks to turn the sports merchandise and collectibles powerhouse into the largest U.S. sports betting operator.
Unlike its top competitors, FanDuel and DraftKings, Fanatics has the advantage of a large, profitable business outside gambling that can help fund its expansion.
Ad spending could rise to $1 billion from $350 million
In an interview with Bloomberg this month, Rubin revealed that the company plans to increase spending on its sports betting unit, with advertising expected to rise to as much as $1 billion in 2027, compared with $350 million this year. The increased spending is part of Rubin’s effort to make Fanatics the top player in every business it enters.
“We’re very focused on being number one in everything that we do,” Rubin said.
Rubin said Fanatics currently ranks third among sports betting operators behind DraftKings and FanDuel, though he admitted that is a distant third.
Success in other businesses gives Fanatics leverage
Fanatics launched sports betting in 2023 and now has about 10% of the market. The company expects to generate about $14 billion in revenue in 2026, approximately 40% more than a year earlier. About $7 billion is expected to come from its licensed sports merchandise business, $5 billion from collectibles and trading cards, and roughly $2 billion from gambling.
Rubin says that success across its other businesses gives Fanatics an advantage in the gambling sector. The company has built a large ecosystem around sports with merchandise, trading cards, and tickets and offers a rewards currency called FanCash that can be redeemed for merchandise and sports bets. He expects to generate about $2 billion in free cash flow this year, has roughly $1 billion in net cash and no debt.
While its gambling business remains unprofitable, Rubin pointed out that because Fanatics is private and he owns 31% of the company with a super majority, he can direct cash generated by its profitable businesses into long-term opportunity areas. As a result, Fanatics doesn’t have the same pressure as public companies to deliver results every quarter.
He also reiterated that he has no interest in taking Fanatics public in the near or medium term.
A tough road with prediction market companies in the mix
While Rubin is prepared to spend heavily on ads in hopes of increasing Fanatics’ share of the sports betting market, other players have also entered landscape, most notably prediction market companies offering sports event contracts. The evolving legal environment around prediction markets is also a factor with several court cases pending on the federal level.
“It’s going to be a very tough road ahead for everybody,” Rubin told Bloomberg. “It’s going to be a tough road ahead for the traditional betting companies, like FanDuel, DraftKings and MGM. It’s going to be tough roads ahead for Kalshi and Polymarket.”
