Fanatics First Big Sports Betting Promotion Raises A Number Of Questions

Article By Steve Ruddock

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Steve is a gaming industry veteran with more than a decade of experience covering legal and legislative developments in the U.S. gambling sector. His primary focus is the ongoing legal and legislative developments in the U.S. and the convergence of terrestrial and online gaming.

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Last Updated: Mar 14^th, 2024

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Fanatics is one of the newest entries in the U.S. sports betting market, and the sports apparel giant is expected to be a disruptor thanks to its massive sport-centric database. 

As of now, the company is only live (in beta testing) in two states, Ohio and Tennessee. The company’s opening salvos highlights its ability to differentiate in a crowded space, with Fanatics offering free bets on qualifying purchases in the Fanatics Store. 

Responsible gambling consultant Jamie Salsburg was the first to notice the Fanatics bonus bet offer in its online merchandise store. His tweet quickly went viral on Gambling Twitter.

With the attention it received and a nudge from Ohio regulators, Fanatics has pulled the plug on the promotion. 

A spokesperson for the Ohio Casino Control Commission told Saturday Down South’s Robert Linnehan the promotion violated two rules, 3775-16-08 and Rule 3775-16-09, which deal with responsible gaming messaging, age-gating, opt-out routes, and the clear communication of the promotion’s details.   

What’s Wrong with this Picture?

The promotion doesn’t sit right with many people in the space, but no one could quite put their finger on why the promotion runs afoul of advertising regulations. It has a Potter Stewart “I know it when I see it” feel to it. 

Rather than a specific violation, the pushback against the promotion seems to be more generalized.

The best argument I’ve seen is that it’s one thing to make the consumer aware of legal betting options or nudge someone who has shown a passing interest in betting to create an account. It’s quite another to compel a non-bettor to wager with a use-it-or-lose-it offer. 

We Just Want Clarity

Where the Fanatics offer falls on the nudge vs. push spectrum is up for debate, and what is acceptable marketing is a line gambling regulators have yet to clarify in any meaningful way, thus ensuring that many more promotions will fall on the wrong side of this blurry line. 

Michael Murphy, a veteran in the online gambling affiliate space, asked the million-dollar question on Twitter, “Is a sports apparel business not allowed to crossover market to its customer base?” Murphy framed this as a question because clear lines have yet to be drawn.

Further, as industry expert Chris Grove noted on Twitter, gambling laws (and regulations) are complicated. Grove’s tweet was about increasing scrutiny on the blurry line between daily fantasy sports and sports betting and reads in part, “lots of things that “look” like gambling are not for the purposes of state laws.” The tweet could just as easily apply to the Fanatics offer or the “can’t lose parlays” that Barstool Sportsbook removed.  

The lack of clarity often puts licensed operators in a bind, unsure of what is and isn’t allowed. How do you follow the rules if you’re unsure what the rules are? For operators willing to push the envelope or residing in the gray areas of the law, it creates loopholes large enough to drive a truck through. And the most troubling part of ambiguous rules is the ability to apply them unequally, holding some to higher standards than others. 

Conform or be Cast Out

Responsible gambling is receiving a lot more attention and funding of late. Yes, that’s a good thing, but the results and the current trajectory may not have the desired impact. 

The results of this poll should be a wake-up call. Two-thirds of respondents (likely heavily invested in responsible gambling) believe the current strategies are having zero impact on problem gambling rates. 

As newly legalized states craft their rules and others rethink their policies, many ideas are being tossed around, and not all are good. As National Council on Problem Gambling executive director Keith Whyte recently told Gambling.com:

“I think a lot more people are trying to figure out what good, responsible gambling really means,” Whyte said. “On the good side, there’s a lot more people talking about it. On the bad side, some of the people that are talking about responsible gambling have absolutely no idea what they’re doing.”

Whyte counted politicians and “frankly, more than a few regulators” into that group, pointing to “odd responses” to issues the NCPPG and others have been working on for decades. 

More things are becoming mandatory, and more things are falling into the off-limits bucket. That heavily restricts the ability to be creative or innovative. Parody and satire are out. Celebrities are on the way out. Mountains of fine print and disclaimers are in.

If this trend continues, every sports betting advertisement will look the same as operators simply mark items as completed on their checklist of currently mandated items. The only difference will be the brand attached to the ad, as the number one goal becomes avoiding running afoul of constantly changing rules no one understands. 

Consumers will quickly tune out these vanilla ads. A disengaged audience is bad for the industry and bad for responsible gambling. 

Where Does Fanatics Go From Here?

Fanatics will face the same problem other non-traditional sportsbooks must deal with, bringing a fresh perspective and strategy to an industry that primarily uses a tried-and-tested cookie-cutter approach to marketing. 

The first step is clear communication with regulators to determine what parts of the promotion violate the rules. Is the premise out of bounds, or did Fanatics fail to properly age-gate or disclose the terms of the promotion?

The second step is to receive clarity on what is permissible on the cross-sell front. Because it’s a new concept, Fanatics may need pre-approval for similar marketing promotions in the future. 

The bottom line is this; the Fanatics promotion feels problematic. Whether it is or not is unclear. 

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Steve is a gaming industry veteran with more than a decade of experience covering legal and legislative developments in the U.S. gambling sector. His primary focus is the ongoing legal and legislative developments in the U.S. and the convergence of terrestrial and online gaming.

Read Full Bio

Steve Ruddock

Last Updated:   Mar 14^th, 2024

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