It was a packed house for the opening keynote of SBC Summit North America, and understandably so given the interest around Fanatics Sportsbook. While not still officially live in any state, the brand is already getting lumped in with the biggest players in the space and expectations are high that they can be a successful second-mover in sports betting.
Fanatics Betting and Gaming CEO Matt King spoke about just that with Sportico’s Eben Novy-Williams during his keynote but also spoke with SBC Americas one-on-one after his presentation. He offered details on the prolonged beta period for the app, answered questions about market access, and explained how the rewards program and existing Fanatics ecosystem do set up huge potential for the brand to make waves when it goes live later this year.
SBCA: Fanatics has been doing its beta launch in Ohio and Tennessee. It’s a bit atypical for beta launches we’ve seen, can you tell us more about that?
King: It was atypical for our industry, right? So most consumer technology you launch with a product and then you test it and get it out there. For us, it was the idea that we think we have a great product it tested extremely well when we were doing research, but we wanted to put it out there in the wild. Then what we saw was incredible feedback to both where the product is and where it’s going. For us, we’re in this for 10 years, so there’s no rush to say, hey, let’s turn on paid marketing. Let’s do this or that. It was the idea of let’s just this as a beta launch for a while and really focus on opening up to Fanatics customers first, which is what we’ve done. Really any fanatics customer can now sign up for the beta and we think it works really well because it allows our teams to really focus on getting the product the best it can be.
SBCA: Normally when we talk about soft launches and beta in sports, it is a 48-hour window before launch and it isn’t about changing the product. Are you really taking this beta period to continue to change and fine-tune the app?
King: We’re trying to do some different things. We have a bunch of ways that we’ve kind of structured the product that we think are intuitive for users, but slightly different for our category. A lot of it’s about getting feedback on how those things are working in the real world and tweaking them and making them better. To your point, there’s been a lot of products that have been launched in this industry, particularly by new entrants, that weren’t quite ready for primetime. And then they market those products. Our view is we’re fortunate enough to have this long-term perspective, so there’s no rush to get to that moment of telling consumers that we’re ready. We’re frankly telling customers it’s a beta, cause it is the truth. And so it’s a helpful way for customers to set their expectations correctly. It’s also catalyzed a really good set of conversations directly with customers about “What do you like, what do you not like?” and gives us the time to make actually incorporate those changes back into the product versus saying we’ll get to that a year from now.
SBCA: This has to be such a relief for you compared to when you were at FanDuel and you just had to retroactively go and fix things?
King: Well, it’s really how you mean relief, right? It’s just different. FanDuel was very much an amazing team kind of working very hard. And the right strategy then was to leverage first mover, so what’s been refreshing here is this idea that we can really solve and make the sports fan’s life better. This broader digital sports platform, to me, is an amazing opportunity to do something truly unique in sports. Because nobody else is positioned to do it. You have to have a sports brand. You have to have the trust in leagues, and frankly, you have to have access to some of the categories like merch and collectibles in order to deliver that comprehensive experience. For me, I’m just incredibly energized by building this kind of digital storefront.
SBCA: Can you tell us a little bit about the reward program for Fanatics? It seems like something that, almost as much as product, will compel people to bet with Fanatics.
King: We’re just getting started on that. If you think about FanCash, it is the currency of sport. You can buy so much what you want in sports with it. Casino rewards are great for casino players. Not everybody either goes to Vegas or goes to Vegas that often, whereas we have 100% overlap with people that use our product and want to do other stuff in sports. So we think we can deliver a loyalty currency that has a perception and a reality that it’s much more relevant and much more useful. It’s gonna be a lot more like Amex membership rewards than it will be a traditional program.
Then the other thing is for VIPs and higher, we just create really unique experiences. We can create experiences that money can’t buy, you can do them at scale given our relationships, and we think we can truly be a place for the most premium sports fan and they feel like our platform is much more rewarding because it offers better access to the teams and the players they love.
SBCA: Rewards are almost as important as product, but product is important and that’s kind of the big question around Fanatics. For those who haven’t seen the product, what do you think of your product and what do you think are going to be the highlights and standout?
King: I think you’ll see a couple of things. One is, I think at its core, and partly because we’ve been second-mover. we’ve been able to address friction points that were good ideas in 2018 but you weren’t good ideas in terms of how you do KYC or how you log in. A lot of these friction points are challenges, so we’ve been able to do our ground-up build of the product with a clear understanding of where the friction points are and try to address them. Another thing is, from a design UX perspective, it’s clean. It’s simple. From an architecture perspective, it’s fast. We’ve benchmarked it and it is the fastest and most responsive product in the market. And we think we’ve built it in a way where we can be leaders and things like virtualization, which is really what consumers come to expect.
SBCA: You’ve revised down a bit the number of states you want to be live in before football season. We’re getting closer to football season. Tennessee, it seemed like that was just an easy process to get into and that was the motivation behind that but do you have a plan of how these state rollouts will go and which states you will be in?
King: We have access everywhere, with the exception of states like Connecticut, that are super-limited access. We have access to 90 plus percent of the parts of the market.
SBCA: What about New York?
King: We look at it as what percent of the profit pool and we access to and that certainly is 90% When we go into those markets, it’s our choice. Each incremental state is a little bit of work, so what I’ve told the team is focus on delivering a better and better customer experience and add states as we go. We’ll be in most of the major markets by football, and certainly by the end of the year, but again, it’s our emphasis to get the product right. One of the things we found now we’re in beta is it unlocks so many new ways we can activate the Fanatics ecosystem that we will prioritize exploring those over getting into the next market state.