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It’s a dog-eat-dog world out there in those online sports betting streets, with bonus offers, loyalty programs, and all manner of customer retention schemes being launched by the operators for the sports bettors’ dollar.
The upstart Fanatics Sportsbook has a new kind of marketing ploy, using its sister site involved in merchandising to try to draw customers.
In Ohio and Tennessee, where the Fanatics sportsbook is up and running for select customers during beta testing, purchases on the Fanatics.com merchandise website are doubling as a way to obtain bonus bet funds.
In short: Spend $10, get a $10 free bet. Spend $500, get the maximum $500 bonus bet. (The bonus portion would not be given back in the case of a winning bet.)
This was rolled out last week, and it first went to 15% of people who logged on to the Fanatics merchandise website. On Wednesday, the test was expanded to a 50-50 split.
So far, so good
“I think we’re very positive about the results,” said Jason White, the chief marketing officer for Fanatics. “The numbers we’re seeing are above our expectations of folks who are accepting the offer and going through the know-your-customer flow.”
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Not everyone is particularly enthused by the tactic, as evidenced on Twitter.
So, @Fanatics is offering a bonus bet to everyone who purchases an item on site?!?
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
— Jamie Salsburg (@jamiesalsburg) May 17, 2023
Let’s think through Fanatics Mass bonus program that @jamiesalsburg tweeted about last night. Fanatics the merch seller is offer free bets if you buy merch from their MERCH site. Have we seen this anywhere in any market? Can an unlicensed company provide free bets to a licensee?
— Steve Brubaker (@SteveBrubaker) May 18, 2023
But White defended Fanatics’ use of its existing customer database to try to attract sportsbook customers. The strategy can be expected in additional states once Fanatics completes acquisition of the U.S. assets of PointsBet from their recently announced deal.
“You’re seeing our business unroll in this order on purpose, because this is the hypothesis of our business model,” he said. “We are starting with a closed beta with our Fanatics customers. We’ve now engaged them with cross-sell, and we are building a base business based on what we think our market advantage is.”
As to concerns about underage consumers — or problem gamblers — seeing the “bonus bet” offer while shopping at Fanatics?
“We take it very seriously and have all the steps in place once a consumer would try to become a customer,” White said. “We have all the tracking of responsible gaming, all the levers of age-gating. This is all about serving an offer to someone who may be a merchandise shopper.”
‘A rewarding way’
White compared what Fanatics is doing to someone who might be confronted with sports betting ads while “looking at scores on ESPN or looking at content on Yahoo.”
Of course, this opens up the possibility of other sportsbooks following in the wake of Fanatics — perhaps a FanDuel or a DraftKings would team up with an online retailer and run a similar promotion.
“I can’t speak to how competitors are going to react to this, but in a world where everyone is trying to figure out a better road to acquisition, we feel that right now we have the best one,” White said. “It’s a chance to work with our existing consumers, who we know are superfans and know are excited about the proposition about being able to get more value out of one relationship with one brand.”
As for the future?
“We’re going to turn on paid media when we think it makes sense,” White said. “But right now we are laser-focused on a business model that leverages our existing customer database and offers them a more rewarding way to be part of the Fanatics community.”
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