Fanatics Cream of Crop Among Tier 2 Sportsbooks, Says Analyst
Posted on: September 3, 2025, 03:26h.
Last updated on: September 3, 2025, 03:26h.
- Fanatics emerging as clear leader in second tier of sportsbook operators
- Bet365 spending pullback could be sign of readying for a sale, says analyst
In the US online sports betting (OSB) industry the pecking order in terms of market share and popularity among investors is Flutter Entertainment’s (NYSE: FLUT) FanDuel, DraftKings (NASDAQ: DKNG), and everybody else.
The duopoly controlled by those two operators arguably obfuscates a second tier comprised of credible competitors, including Bet365, BetMGM, Caesars Sportsbook, ESPN Bet, and Fanatics, among others. While DraftKings and FanDuel don’t long for competitors, one analyst argues that Fanatics is emerging as the clear leader in tier 2.
Our analysis shows OSB handle share momentum for T-2 operators is limited mostly to privately-held Fanatics, given a clear #3 betting product and sustained above-market promo spend,” notes Stifel analyst Jeffrey Stantial.
The analyst’s perspective jibes with other recent data points indicating closely held Fanatics, and to a lesser extent Bet365, have been gaining sports betting market share. Helped by above-average promotional expenditures — something older operators have largely abandoned — Fanatics has made headway in both iGaming and sports wagering.
“Combined with better execution on OSB product from Fanatics, this has translated to bifurcated market share performance with Fanatics improving handle share with continued sequential momentum,” adds Stantial.
Bet365 Moves Could Be Sale Preparation
Some data points confirm that Bet365 joins Fanatics among the privately held operators making OSB market share strides, but the UK-based company has reined in promo spending in the US this year, along with other moves adding to speculation CEO Denise Coates may be readying her shop for a sale.
“While not exactly clear why (bet365 management is notoriously tight-lipped), media reports & corporate actions (China exit) earlier this year suggest the Coates may be considering a sale — with sudden deceleration in promo spend potentially reflecting margin ‘window-dressing,” adds Stantial.
In May, rumors surfaced that Bet365 was in talks with US investment bankers regarding a possible sale that would value the company at $12 billion. It’s possible the operator is taking a more prudent approach to US spending to make itself more attractive to prospective suitors.
Other options being considered include a US initial public offering (IPO) or a partial sale to a private equity company that would ready Bet365 for a US IPO, allowing the Coates family to cash out in the process.
iGaming Deconsolidation Phase Afoot
iGaming, which is the industry’s fastest-growing segment, is proving to be more competitive than OSB. Internet casino leaders are BetMGM, DraftKings, and FanDuel, but Stantial sees momentum building for Caesars Entertainment (NASDAQ: CZR) and Penn Entertainment (NASDAQ: PENN).
“Structurally, we see the iCasino market share landscape more at risk of deconsolidation with DraftKings/FanDuel/BetMGM’s product lead compressed meaningfully T2Y,” wrote the analyst. “We observe iCasino net gaming revenue share momentum for omnichannel operators PENN & CZR.”
The analyst added that if market share losses are incurred in the internet casino space, it’ll be the top three operators doing the losing with the likes of Caesars, Fanatics, and Penn benefiting.
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