A licensing hearing in Massachusetts is providing insight into how Fanatics plans to run its sports betting sites, including the company's intentions to cross-sell merchandise customers on legal gaming — a tactic that caused some concern for regulators.
The Massachusetts Gaming Commission (MGC) met again on Thursday to continue its review of Fanatics’ application for a mobile sports betting license in the commonwealth. The MGC's review began on Wednesday.
BetFanatics is one of several operators seeking to offer online sports betting in Massachusetts, but it is also one of the more unique applicants. The MGC is technically reviewing an application from a company called FBG Enterprises Opco LLC, a subsidiary of Fanatics Holdings Inc., which also owns the massive sports-merchandise business of Fanatics.
The sports-betting arm of Fanatics plans on marketing itself to the company’s merchandise customers. That, however, caused a bit of discomfort for some commissioners, who wanted to know more about the company’s plans to ensure they will not advertise their gambling business to underage customers, among other responsible gaming-related questions.
“I have concerns about the model of how you're going to get your database and pull them in and some of the language,” Commissioner Eileen O’Brien said during Thursday’s meeting. “It's pretty aggressive in the pitch. That kind of runs counter to the [responsible-gaming] sense for me. And so I have a concern about wanting to see more specifics.”
An optional offer
The MGC could get some of those details in a non-public session. Even so, Fanatics aims to have its cross-sell marketing comply with all regulations, and it will have an "opt-out" feature for any sports betting-related marketing sent to its commerce customers, said Alex Smith, the company's vice president of regulatory affairs.
“So customers that don't want to see the gaming ads can opt-out easily,” Smith said. “Anyone that we know is under 21 years of age, we will suppress marketing to those individuals. And… we think there are really exciting opportunities to work with third-party technology providers that can help us identify and eliminate direct marketing to known minors.”
The MGC ultimately had to adjourn for the day on Thursday due to time constraints for some commissioners. Fanatics’ application will be taken up again next week.
The company’s “Category 3” license for mobile sports betting sites would be “tethered” to Plainridge Park Casino, which is in the process of obtaining its own sports-betting permit. Plainridge Park’s permit will allow it to offer sports betting on its property and via two digital platforms, the other being Barstool Sportsbook.
Learn to code
Fanatics has yet to start taking wagers anywhere but has obtained sports-betting licenses in Maryland and Ohio and says it has five other applications pending. The company did give a preview of its wagering platform but it was in a session that was closed to the public.
The sports-merchandise company’s chief executive officer said last year that Fanatics wants to launch online sports betting in early 2023. It intends to do so in Massachusetts near the state’s planned start date for mobile sports betting, which will be sometime in early March, according to the MGC. Legal sports betting will officially start in the state on January 31, when retail wagering is scheduled to begin at its three casinos.
At least some of the infrastructure for Fanatics’ online sportsbook will come from Amelco, the U.K.-based technology company that has helped power Hard Rock Sportsbook and FOX Bet, among others. Matt King, the CEO of Fanatics Betting and Gaming (and formerly the CEO of FanDuel), said they partnered with Amelco to buy their “core-code base.”
The disclosure during Wednesday’s hearing may have had an effect elsewhere. The stock price of rival platform provider Kambi Group PLC was down by more than 10% Thursday morning in the wake of the Amelco news, suggesting some investors had been holding out hope that Kambi would win the Fanatics contract.
Meanwhile, the MGC has granted approvals to three casinos and four online sportsbooks, including Barstool.
