Connecticut Lottery Picks Fanatics as Next Sportsbook Partner
Posted on: December 1, 2023, 04:57h.
Last updated on: December 9, 2023, 02:11h.
The Connecticut Lottery Corporation (CLC) has selected Fanatics Betting and Gaming as its next sports betting partner.
The CLC said it fielded several bids for its sports betting partnership and the presentation from Fanatics was deemed the best offer.
Fanatics is the only true sports brand in the gaming space and has established itself as an innovator in the industry,” said Greg Smith, CLC president and CEO. “We have been impressed with the Fanatics team, their aggressive entry into the US sports betting market, and we are excited to see how they redefine the sports betting customer experience here in Connecticut.”
Connecticut legalized sports betting in March 2021 in part of a gaming expansion package that reworked the state’s Class III gaming compacts with the Mohegan Tribe and Mashantucket Pequot Tribal Nation.
The tribes were afforded iGaming and both retail and online sports betting privileges. In exchange for the expanded gaming, the tribes conceded control of their gaming monopoly to allow the Connecticut Lottery to partner with a third-party sportsbook operator to conduct in-person and online sports gambling.
Rush Street Exit
When the CLC held its first competitive bidding round for its sports betting opportunity in 2021, the newly liberalized gaming vertical was still the talk of the US gaming industry. Numerous legacy casino companies and startup firms were battling for market entry and share, and that led to the CLC fielding a rather rich offer from Rush Street Interactive.
The Chicago-based digital gaming unit of Rush Street Gaming won the Connecticut Lottery sports betting competition over 15 rival bids by guaranteeing the lottery a minimum revenue share of $170 million for the 10-year partnership. Connecticut lawmakers set the gross tax rate on sports betting income at 13.75%, meaning Rush believed it could win a minimum of $1.23 billion during the life of the contract.
Sports betting went live in Connecticut on Oct. 19, 2021. The tribes’ sports betting partners, Mohegan Sun with FanDuel and Foxwoods with DraftKings, quickly snatched up the majority of the market and left little for Rush’s SugarHouse Sportsbook.
Million Dollar Revenue
Between December 2022 and October 2023, the SugarHouse Sportsbook generated online sports betting revenue of just $9.17 million. The Connecticut Lottery’s retail SugarHouse Sportsbook locations added $11.6 million in gross revenue.
Rush’s $170 million tax revenue pledge suggested it would win $123 million a year in gross income. Less than two years into operations, it was apparent that the projection was massively off, as it was over $100 million short in its most recent 12-month period.
In April, Rush announced it was severing its sports betting partnership with the Connecticut Lottery. A separation cost wasn’t disclosed.
Rush isn’t the only firm to over-project sports betting revenue. Several others have also realized how razor-thin of an industry sports betting is. Many operators have folded, with a few notables being WynnBet, FoxBet, and MaximBet.
Conversely, Fanatics remains bullish on sports gambling and is on a market entry spree. The company owned by the American apparel manufacturer that has licensing agreements with the NFL, MLB, NBA, NHL, Formula 1, and NASCAR entered Virginia earlier this month — its seventh state along with Kentucky, Maryland, Massachusetts, Ohio, Tennessee, and West Virginia.
Fanatics founder and CEO Michael Rubin is on a mission to make Fanatics one of the largest sportsbooks in the US. The Connecticut Lottery was apparently won over during his company’s pitch.
“CLC anticipates notable market share growth as a result of this partnership,” Smith concluded.
Along with the online sportsbook, Fanatics will now run the self-service kiosks at the CLC’s 10 retail sportsbook locations. The lottery’s retail sportsbook business is highlighted by the recently opened XL Center Sports Bar & Sportsbook in Hartford.
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