New York, NY. – December 7. Portrait for a profile on Fanatics founder and CEO Michael Rubin in his office in downtown New York.
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Fanatics is in talks to acquire bookmaker BetParx as the sports merchandising company seeks to take a bigger position in sports betting, according to people familiar with the matter.
A deal has not been reached, although Fanatics has signed a letter of intent to buy the bookmaker, said the people, who were not authorized to speak publicly on the matter. A transaction price has yet to be learned and talks may not result in an agreement, the sources added.
Representatives for Fanatics and BetParx declined to comment.
The BetParx app was launched last year by Greenwood Gaming & Entertainment, the parent company of Parx Casino in Pennsylvania, and Playtech, an online gambling software provider. BetParx is also available in New Jersey, Pennsylvania, Maryland, Michigan and Ohio.
Fanatics considered an initial public offering, but sought to complete a gambling acquisition, among other possible transactions, before going public, the people said.
The company would enter a crowded market. Dozens of sports betting operators have sprung up in recent years, including Beat-belonging to FanDuel, DraftKings, Caesars and BetMGM, which is co-owned by MGM Resorts and hear. As the space has become more competitive, smaller players have struggled with some, like MaximBet, having recently gone out of business.
Fanatics has been looking for a deal in sports betting for some time. Last year, he had discussions with small gambling operator Tipico, CNBC previously reported.
The company is opening Fanatics Sportsbook at FedExField, home of the NFL’s Washington Commanders. Fanatics also said it received a temporary license to operate in Massachusetts and plans to partner with Plainridge Park Casino, which is owned by Penn National.
In October, Fanatics said it hired Andrea Ellis as chief financial officer for its betting and gaming division.
Last year, billionaire Fanatics executive chairman Michael Rubin sold his 10% stake in Harris Blitzer Sports Entertainment, the owner of the Philadelphia 76ers and New Jersey Devils, allowing the Fanatics to enter the space of the game. NBA rules prohibit team owners from operating a gaming platform.
Fanatics raised $700 million in capital late last year, which the company planned to use for potential mergers and acquisitions in the collectibles, betting and gaming sectors, CNBC previously reported.
The new round raised Fanatics’ valuation to $31 billion.
Rubin’s company has grown rapidly recently, moving beyond just being an online sporting goods company. The company estimates that its revenue for Fanatics, including its Lids segment, will be approximately $8 billion in 2023.
The company has grown through acquisitions. Last year, it expanded its footprint in the collectibles sector with a $500 million acquisition of Topps. He also bought the clothing brand Mitchell & Ness in partnership with LeBron James and Kevin Durant.
–CNBC Jessica Dore contributed to this article.