For the most part, Tuesday’s Kentucky Horse Racing Commission meeting went exactly as most expected.
The commission approved all seven operator license applications. They also gave the green light to all the service providers vying for a Kentucky sports betting license.
However, the commission announced that Fanatics Sportsbook submitted a service provider application. Service providers are essentially the tracks’ sports betting partners. Fanatics inked a deal with one of the Churchill Downs-owned operators, Ellis Park, to gain market access for its online sportsbook.
But Fanatics’ last-minute application shows the company thinks Kentucky could help launch their optimistic sports betting goals.
Fanatics Sportsbook Not on Original Applicant List
Less than two weeks ago, Gov. Andy Beshear released a list of early applicants. Seven horse tracks applied for operator licenses and seven online sportsbooks submitted paperwork to be service providers.
Beshear listed Bet365, BetMGM, Caesars, Circa, DraftKings, FanDuel, and ESPN Bet KY as potential sportsbooks available to Kentucky gamblers when online sports betting launches on Sept. 28. Given the size of the state, the number of tracks and the limited time left to apply, most believed that list was finalized.
The Florida-based Fanatics somewhat surprisingly bucked the trend. On the other hand, a Kentucky launch is needed to hit the goals stated earlier this year by CEO Michael Rubin.
In April, Rubin told the Wall Street Journal he expected the sportsbook to be available in 12 to 15 states by the start of the NFL season. Furthermore, he said the company expects to invest $1 billion into the sportsbook division. He thinks it will be profitable by 2025 or 2026.
The new brand is only taking bets and offering Fanatics Sportsbook promos in Ohio, Tennessee, Massachusetts, and Maryland. Kentucky puts the company in five jurisdictions.
They will fall well short of their 12-state goal unless the company’s $150 million acquisition of PointsBet is finalized before the end of the 2023 season.
On the other hand, the company just rolled out a new mobile app and loyalty program in those four states. Rubin clearly doesn’t have any signs of pulling back from his plans. Kentucky will be the first state where Fanatics rolls out its current sportsbook at the start.
Kentucky Could Be an Indicator of Fanatics’ Nationwide Success
In the four states where Fanatics is operating, the sportsbook isn’t making a dent in the market.
It garners less than 1% of the market share in Massachusetts, Ohio, and Maryland. Tennessee does not release revenue numbers for specific operators.
But the key difference is that Fanatics will start accepting wagers in Kentucky at the same time as other sportsbooks. Fanatics brought its platform to market in other jurisdictions after the state launched its industry.
It would be a big step in the right direction if Fanatics could obtain serious market share in Kentucky ahead of its PointsBet takeover.
Unanimous Votes, Detailed Answers by Regulators Bodes Well for Kentucky’s Success
Aside from the Fanatics news, there weren’t any big surprises or shocking events. Regulators were on the same page and the entire process went smoothly. The commission voted unanimously to approve operators and their partners.
The vote came just hours after DraftKings announced a partnership with Cumberland Run and its Mint Gaming Hall properties.
Given Kentucky’s short timeframe from legalization to launch, having regulators be in control and prepared is key for the market’s health.
There were very few questions. The commissioners fielded the few questions asked with quick and detailed responses. In other words, it looked like Kentucky regulators knew what they were doing.
It’s incredibly unlikely that either the retail or online betting launch date will get delayed. With regulators making clear and concise decisions, Kentucky’s environment will be easy for operators to navigate.
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