Ohio regulators say they are trying to put the kibosh on a Fanatics Sportsbook promotion that raised some eyebrows on social media.
Using its merchandise operation to drive business to its sportsbook (and vice versa) is a big part of the strategy for Fanatics, an up-and-coming operator of sports betting apps.
“What you'll see us do more and more as people are shopping on Fanatics.com, or in our ecosystem, at the right moments in time... you'll see an offer to try out the sportsbook,” said Matt King, CEO of Fanatics Betting and Gaming, during last week’s SBC Summit North America in New Jersey.
An eye-catching offer
But King’s comments at the conference came before a Fanatics Sportsbook promotion similar to what he described was posted on Twitter on Wednesday, generating some chatter on social media. According to the promo, Fanatics was offering to match the $29.99 purchase of a baseball hat with a $29.99 "Bonus Bet" for use on the Fanatics Sportsbook app.
The promotion said it is for new Fanatics Sportsbook accounts, in Ohio only, and for those 21 and older. The text of the promo also included information about the 1-800-GAMBLER national problem gambling helpline.
Nevertheless, the promotion is apparently not sitting right with the regulator of Ohio sports betting.
“The Commission is aware of the promotion and is working to get it removed,” said Jessica Franks, the Ohio Casino Control Commission's director of communications, in an email.
Franks did not say exactly which advertising rules the promotion violated or why the commission wanted it taken down. A spokesperson for Fanatics, meanwhile, did not immediately respond to a request for comment.
So, @Fanatics is offering a bonus bet to everyone who purchases an item on site?!?
— Jamie Salsburg (@jamiesalsburg) May 17, 2023
Obviously they won’t let kids take advantage of the promo, but presenting it to everyone who places an item in the cart? Really?
This is quite problematic for them and the industry as a whole. pic.twitter.com/2WGmPhizOY
Fanatics has begun testing its mobile sportsbook in Ohio and Tennessee. The legal sports betting arm of merchandise giant Fanatics Holdings Inc. has licenses lined up elsewhere as well, including in Massachusetts, where it is on the cusp of launching.
The company recently announced that it plans to buy the U.S. business of PointsBet for $150 million, potentially providing it with more market access and visibility with bettors.
Fanatics' dominance in sports merchandise and its 95-million-person customer database give the firm a few ways to narrow the gap with other operators of sports betting sites. Fanatics can also offer “FanCash” to bettors they can use to buy jerseys or other merchandise, saving money it might have had to spend on more traditional marketing.
“As opposed to paying a media broadcast, or Google or Facebook to acquire customers, we're going to take the money that we would spend… and reinvest it in rewards,” King said during last week’s conference.
I can't get/bet no...
King said Fanatics saw promising results during its beta testing when it would, for example, send a bettor who collects memorabilia a signed jersey.
“It's relatively low cost for us, but it's a huge game-changer for that fan,” added King, who is also the former CEO of FanDuel.
King said that customer satisfaction scores are lower for sports-betting apps than they are for streaming or payment apps. He noted Fanatics has the luxury of being a “second mover” in the industry, allowing them to learn from others and try to provide a better product.
“I think the next wave of growth in this industry really comes from innovation and how do you think about doing it better,” King told the audience. “We as an industry have a satisfaction gap to close if we want to be viewed as kind of a category that's on par with the best consumer technology.”
