ports merchandise and licensing giant Fanatics is allegedly close to acquiring a sports betting company, with sources familiar with the matter saying meetings with Rush Street Interactive (RSI) have been productive.
The company could potentially launch a takeover of RSI, as part of Fanatics’ plans to enter the lucrative world of sports betting. Other sources also report Swedish company Betsson as another potential business for acquisition, according to Action Network.
Speculation on the matter surfaced on Tuesday, prompting RSI shares to spike: the iGaming company closed the day up 6.6% on volume, more than quadruple its daily average. Both Rush Street Interactive and Fanatics have not commented on the alleged talks so far.
Fanatics has begun preparing for its eventual sports betting endeavors throughout the year, having hired former FanDuel CEO Matt King and Action Network Chief Operating Officer Ari Borod.
It also hired Tucker Kain, president of business enterprise for the Los Angeles Dodgers, who will oversee entries into new business areas. The company aims at building out a specialized team, which could be reinforced by this alleged RSI acquisition.
Rush Street is currently live in 10 states and is top five in online gross sports betting revenues. The company is also focused on internet casinos and came to market last year following a merger with a SPAC.
Sources familiar with the company claim RSI to be in the lead for the rights to ESPN’s name in gambling, as Wall Street Journal recently reported ESPN was looking to sell sports betting rights for an estimated $3 billion.
The iGaming market has recently seen big acquisitions turning from rumors to reality, including the Golden Nugget Online Gaming purchase by DraftKings in a $1.56 billion all-stock deal. RSI has been at the center of speculations about also looking for a similar deal for a while now.
Florida-based Fanatics is currently valued at $18 billion following latest funding round in August, which opens many acquisition possibilities for the company: RSI is valued at $3.61 billion, while Betsson is at $1.3 billion, meaning both options could be affordable.
In addition, an RSI takeover would grant Fanatics market access to multiple states in the US for iGaming and sports wagering. On the other hand, Betsson does not year operate in the country.
Last month, Fanatics broke the hold Topps had on the MLB trading card market for 70 years, securing an agreement with the league. The company also holds rights to NBA and NFL cards. The news further increased the company’s valuation.