The start of legal online sports betting in Ohio has been such a rousing success that the state is welcoming another mobile sportsbook to the fold.
Fanatics Sportsbook, which is owned and operated by Fanatics, Inc., will be launching their own mobile betting app in Ohio at the start of next month. The app, which will also be debuting in Tennessee, will join a robust list of odds providers in The Buckeye State. Its arrival is especially significant because of how much ground it ostensibly needs to make up.
Staggered launches were a concern among operators at the onset of Ohio online sports betting. The Fanatics Sportsbook is now four months behind competitors who debuted their own Ohio sports betting apps at the start of January. This has some wondering whether Fanatics, Inc. could face an uphill climb when it comes to generating their own mobile gaming revenue
Is there enough clientele to go around? Fanatics, for their part, don't appear concerned. Let's go ahead and see whether their confidence is warranted.
Details of New Ohio Online Sports Betting App
A company spokesperson for Fanatics discussed the roll out of their Ohio online sports betting application with Sports Handle's Matt Rybaltowski. He unpacked the full details of their launch, which you can see below:
"Fanatics’ decision to select the two states for its mobile launch should not come as a surprise. Earlier this month, the merchandising giant confirmed that it had beta-tested the app in both states. At the moment, Fanatics is live with retail sports betting in just one state, Maryland. In January, the company opened a brick-and-mortar sportsbook at FedEx Field, home of the NFL’s Washington Commanders.
"Last week, Fanatics CEO Michael Rubin teased the app launch at the CAA World Congress of Sports in Los Angeles. There, Rubin told an assembled crowd that he is confident that the quality of the product will be competitive with industry behemoths DraftKings and FanDuel. Fanatics will look to cut into the market share held by the industry’s top three companies—FanDuel, DraftKings, and BetMGM. In the Buckeye State, that triumvirate commanded a combined market share of 79 percent in February."
Putting the Fanatics sports betting app through a soft opening in Ohio and Tennessee was the right call. It not only allowed the company to beta test their mobile gaming systems, but it gave them insight into the markets they're currently trying to track. That information is invaluable no matter when the app goes live. It is mission critical now that Fanatics will enter an Ohio sports betting market dominated by a trio of other companies.
Challenges Lie Ahead for Fanatics' Ohio Mobile Sports Betting Application
Executives from Fanatics clearly aren't concerned about Ohio having enough business to go around. And there is plenty of merit to this confidence.
While online gambling has only been around for a few months, the Ohio sports betting launch has already been a financial boon for the state's tax revenue. A total of nearly $1.8 billion has been wagered in Ohio over the past three-plus months. Of that betting handle, sportsbooks have reported combined profits of just over $292 million. That's a gigantic number when you consider how many promotions they were running to open the legal sports gambling era in Ohio. Online operators do not have to pay taxes on wagers placed with promotional money.
Anyway, The Buckeye State's cut of that $292 million amounts to $29.3 million—roughly 10 percent of the gross revenue. Judging by these numbers, there's plenty of business to go around for all of the online sportsbooks in Ohio. And remember: Profits could be even higher in the coming months, as the promotional credits settle into a lower normal.
Still, it's not just about the money being wagered in general. Fanatics Sportsbook needs that money to be invested in their operations. Converting clients who have already signed up with other highly reviewed online sportsbooks is going to be a real challenge.
Fanatics believes it has addressed this issue with their new customer loyalty program they're calling "FanCash." According to Rybaltowski, screenshots of the process indicate that "sports betting customers may be able to exchange FanCash for merchandise and other Fanatics commodities."
Fanatics May Lay the Blueprint for Future Additions to Ohio Online Sports Betting Market
You better believe other online sportsbooks not yet operational in Ohio will be watching closely to see how Fanatics fares when entering a more established market. Legal sports gambling in the United States isn't yet old enough to have undergone material transitions and additions to entrenched sectors, but those alterations will come in due time.
In many ways, Fanatics' entry into the Ohio sports betting market sets the stage for how all newcomers will approach the undertaking. If they're successful, their method of beta-testing and soft rollouts will be popularized in the future. If they're unsuccessful, it will impact not only the future of sportsbook operators in Ohio, but across the rest of the United States.
For now, it's best to view Fanatics Sportsbook's Ohio Launch with cautious optimism. Yes, they bring brand recognition and a recent familiarity with the market. Their partnership with the NFL certainly helps, as well. But they have also struggled to generate conversions early in the process. Somewhere between 2 percent and 2.5 percent of first-time users stuck with the app during their beta-testing. However, this was before Fanatics debuted their opening promotions and loyalty program.
Will their conversion rate skyrocket once the sports betting app is open to the general public with all its intended bells and whistles? We'll have to wait and see.
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