Fanatics Won’t Run Apparel Bonus Promo in Massachusetts Following Ohio Flap

Posted on: May 20, 2023, 08:35h. 

Last updated on: May 22, 2023, 02:07h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Should it launch mobile sports wagering later this month in Massachusetts as expected, Fanatics won’t offer clients promotional bets tied to apparel. That’s after a similar gambit drew the ire of Ohio regulators earlier this week.

Fanatics RSI
A Fanatics advertising image, above. The company shut down an apparel promo bet scheme in Ohio this week. (Image: Sportico.com)

In Ohio, Fanatics offered buyers of sports apparel and merchandise bonus wagers equivalent to the purchase price. For example, a $30 baseball cap buyer could have received a $30 bonus bet. The marketing ploy was limited to one bet per new Fanatics sportsbook account. The marketing language contained a link to a terms and conditions site and a phone number to a helpline for problem bettors.

It’s not clear exactly what Ohio guidelines Fanatics ran afoul of. But the Ohio Casino Control Commission noted earlier this week it knew of the marketing plan and was working to have it pulled. The company swiftly complied with that request.

Ahead of an expected launch in the burgeoning Massachusetts sports wagering later this month, Fanatics won’t deploy the Ohio plan, and the Massachusetts Gaming Commission (MGC) overtly told some media outlets that the sportsbook operator’s promotions must be in-line with state regulations.

Nifty Approach by Fanatics

A new entrant to the regulated sports betting fray, Fanatics’ primary business line is selling officially licensed apparel and merchandise of college and professional sports teams and leagues. It’s also a growing player in the sports collectibles arena after announcing its $500 million acquisition of Topps Sports & Entertainment in early 2022.

That implies that sports wagering and iGaming will be smaller pieces of the privately held company’s revenue stream for now. On a related note, Fanatics Betting & Gaming CEO Matt King pointed out at a recent gaming conference that the industry’s future will be partially tied to customer loyalty and rewards.

Rivals such as BetMGM and Caesars Sportsbook, among others, are keenly aware of that, having moved to tie their popular casino loyalty programs to sports wagering platforms. Clients of those sportsbooks and others can accrue points redeemable at land-based gaming venues.

Fanatics doesn’t have the benefit of casino ownership and probably doesn’t want to explore that avenue simply in the naming of juicing its promotional offerings.

The Old-Fashioned Way

While Ohio regulators clamped down on it, Fanatics’ marketing effort there was nonetheless unique and potentially more cost-effective for the operator than the traditional model of free bets.

That’s a costly approach, and it’s one that established sportsbook operators are actively reducing, though not eliminating. It’s done in a bid to attain profitability and cut down on exposure to bonus-hunting that usually displays no brand loyalty.

Fanatics may have to adhere to the standard promotional bet methodology that’s so pervasive in the industry. Or the company could break new ground with a different client-focused marketing plan that regulators approve of.

Fanatics aims to offer mobile sports betting in at least a dozen states by the start of the 2023 football season.