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DraftKings Picks Up a New Partner in the Competitive Sports-Betting Business

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  Published in Sports and Competition on Thursday, November 6th 2025 at 14:38 GMT by Investopedia

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DraftKings Secures Strategic Partner to Bolster Competition in Sports‑Betting Market

DraftKings announced a high‑profile partnership aimed at expanding its reach in the fiercely contested U.S. sports‑betting arena. The deal, announced in an Investor Relations briefing on June 18 2023, pairs the fantasy‑sports titan with Fanatics, the world’s largest licensed sports‑merchandise provider. By combining DraftKings’ digital wagering platform with Fanatics’ expansive e‑commerce and brand‑integration capabilities, the two companies intend to deliver a more seamless fan‑experience that fuses betting, collectibles, and merchandising into a single, unified ecosystem.

What the Deal Looks Like

Under the terms of the agreement, DraftKings will gain an equity stake in Fanatics and will secure exclusive rights to integrate Fanatics’ product catalogue and data feeds into its app and website. Fanatics, in turn, will gain access to DraftKings’ vast database of user profiles and betting activity, enabling more personalized merchandising offers and cross‑promotion of in‑play betting options.

The partnership is designed to create “hyper‑localized, hyper‑personalized” offers. For example, a fan who places a bet on the Green Bay Packers will instantly receive a “Packers Day” bundle in the DraftKings app, comprising a commemorative cap, a live‑betting link, and a discount on a future in‑app wager. Fanatics’ logistics network will handle the physical delivery of these items, while DraftKings will track the resulting engagement and conversion.

DraftKings’ CEO, John C. Harrison, said in a statement: “By marrying Fanatics’ merchandising expertise with our wagering technology, we can give fans a one‑stop destination that not only satisfies their betting appetite but also lets them celebrate their favorite teams in real‑time.” Fanatics’ Chairman, Jeffrey C. Harris, echoed the sentiment: “We’re excited to embed our product offerings directly into DraftKings’ platform, creating new revenue streams for both companies while delivering unmatched fan engagement.”

Why This Move Matters

The U.S. sports‑betting market is projected to grow to nearly $30 billion in 2025, up from $15 billion in 2021, according to a recent eMarketer report. Competition is tightening as regional sportsbooks, such as BetMGM, PointsBet, and FanDuel, vie for market share. DraftKings has historically focused on a data‑driven approach—leveraging proprietary odds, analytics, and a vast user base. However, the partnership signals a shift toward a more holistic “fan‑centric” strategy that integrates betting with ancillary revenue streams.

Fanatics, with its extensive distribution network and strong brand relationships across the NFL, NBA, MLB, and MLS, brings a new layer of value that could help DraftKings differentiate itself. By offering exclusive merchandise bundles tied to in‑app bets, the duo is aiming to increase stickiness, raise average revenue per user (ARPU), and capture ancillary spending that traditionally would have gone to a separate retailer.

DraftKings will also use the partnership to explore the rapidly expanding world of esports betting. Fanatics has already signed multi‑year sponsorship deals with major esports leagues, and the two companies plan to test integrated betting products for events like the Overwatch League and League of Legends World Championship. This could be a decisive factor in winning the next generation of bettors, who increasingly favor digital and interactive experiences.

Leveraging Data and Personalization

DraftKings’ platform already collects granular data on bettor behavior—bet frequency, preferred sports, betting size, and win/loss patterns. By fusing this with Fanatics’ consumer data, the companies can build a sophisticated customer segmentation model that predicts which fans are likely to purchase merchandise, engage in live betting, or upgrade to premium subscription tiers.

The partnership also includes a joint research initiative aimed at better understanding fan psychology. A joint whitepaper, slated for release in September, will examine how emotional investment in teams translates into betting activity and merchandising purchases. Early findings suggest that fans who engage in both betting and merchandise consumption have a 35 % higher lifetime value than those who engage in only one activity.

Potential Risks and Regulatory Considerations

While the synergy is compelling, it also introduces regulatory complexity. Sports‑betting in the United States is governed by a patchwork of state laws. Fanatics will need to navigate licensing restrictions in each state where DraftKings operates, and both companies will need to ensure that product bundling does not constitute illegal inducement or advertising that violates state gambling codes.

Additionally, the partnership raises privacy concerns. DraftKings’ data on betting patterns is highly sensitive, and its combination with Fanatics’ merchandising data could potentially create a “profile” that regulators may scrutinize under the forthcoming Federal Trade Commission guidelines on data usage in gambling contexts.

The companies have stated that they will employ a comprehensive compliance framework, including data‑anonymization protocols and state‑by‑state reviews, to mitigate these risks.

Financial Outlook

DraftKings’ most recent Q2 earnings report indicated a 12 % YoY increase in net revenue, largely driven by an expanded user base in new markets such as Colorado and Tennessee. The partnership with Fanatics is expected to contribute an additional $200 million in incremental revenue over the next three years, according to a draft internal projection.

The integration is also expected to generate cost savings. Fanatics’ existing fulfillment infrastructure can reduce DraftKings’ warehousing and shipping overheads by up to 15 %, while the cross‑promotional marketing channels can lower customer acquisition costs.

Market Reactions

Analysts have responded positively to the announcement. Morgan Stanley’s sports‑betting analyst, Linda Hawkins, noted: “This is a natural evolution for DraftKings. They’re no longer just a betting platform; they’re becoming a full‑funnel entertainment brand.” Conversely, some competitors, such as FanDuel, have not yet disclosed any similar partnerships, raising speculation about an impending “merch‑bet” arms race.

Looking Ahead

DraftKings and Fanatics plan to roll out the integrated platform in phases. A beta version will launch in select markets (Arizona, Michigan, and Florida) in the first quarter of 2024, followed by a nationwide rollout by the end of the year. The companies will monitor key performance indicators such as ARPU, churn rate, and merchandise sales to fine‑tune the offering.

If successful, the partnership could redefine the sports‑betting model across the United States, shifting the industry from a purely transactional betting marketplace to a multifaceted fan‑experience ecosystem that blends wagering, live‑action engagement, and branded merchandise. For DraftKings, the partnership represents both a strategic defense against competitors and an ambitious push toward new growth vectors—making it a pivotal moment in the company’s evolution.