BetFanatics, the sports betting arm of the fan merchandise conglomerate Fanatics, went before the Massachusetts Gaming Commission December 4 and again on December 5.
The company expects to rely on its massive data list of customers to avoid the promotional start-up expenses that have grounded other companies, according to Covers.
That approach has not been without its regulatory concerns.
The commission is actually investigating an application from FBG Enterprises Opco LLC, a subsidiary of Fanatics Holdings Inc., which also owns the sports-merchandise business of Fanatics.
One concern is about advertising to underage people on the website looking for t-shirts.
“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 a 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.”
Fanatics will have an “opt-out” feature for any sports betting promotional tools, 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.”
If approved, 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.
Fanatics has reported obtaining licenses in Maryland and Ohio with five applications pending.
The company’s CEO, Michael Rubin, said last year that Fanatics wants to launch online sports betting in early 2023. Legal sports betting will officially start in the state on January 31, when retail wagering is scheduled to begin at its three casinos.
Some infrastructure 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), partnered with Amelco to buy their “core-code base.”
Meanwhile, the commission has granted approvals to three casinos and four online sportsbooks, including Barstool.
Penn Sports Interactive (PSI), which operates Barstool Sportsbook, received a unanimous preliminary approval for a temporary license after a long review.
“Penn Sports Interactive [doing business as] Barstool Sportsbook has shown by substantial evidence that they have satisfied the criteria set forth in general,” read Commissioner Eileen O’Brien in making the motion, adding also that the approval is still just for “preliminary suitability.”
Penn Entertainment expects to take full control of Barstool Sports in February. It owns a portion of the firm now. The license will be tethered to Plainridge Park, which Penn also operates. Wagers should be ready to go in March.
The sportsbook has conditions on its license:
- Make sure no one under the age of 21 attend any of the live Barstool College Football Shows;
- Cooperate with the Investigation and Enforcement Bureau (IEB) conducting an investigation “without limitation” into Barstool Sports Inc. in connection with branding;
- Provide diversity goals on their supplier spending; and
- Supply diversity goals for the workforce.
The process of Barstool Sportsbook being granted the preliminary approval was far from smooth.
“I still have the concerns that I have in terms of the branding with Barstool Sports Inc. and what is now even [stronger] branding because you are the Barstool connection…back to Penn and sports betting in Massachusetts,” commissioner O’Brien told PSI spokesperson Benjie Levy during Wednesday’s session.
The final result was the second condition attached in approval. As O’Brien explained, PSI will cooperate “without limitation” in an investigation conducted by IEB into “the branding efforts of Barstool Sports Inc. in connection with the branding of Penn and PSI.”
During previous sessions, several had their complaints about Barstool founder Dave Portnoy.
“When we talk about Mr. Portnoy putting out all this money or losing, some of the comments he’s made in the past fly in the face of responsible gaming,” MGC commissioner Brad Hill said during a December hearing regarding Plainridge Park Casino’s temporary Category 1 license application. The comments were made in reaction to a New York Times piece from November 2022 which chronicled Portnoy’s extensive gambling losses and self-professed status as a “degenerate gambler.”
In 2021, Penn paid a $10,000 fine from the Indiana Gaming Commission over a TikTok posted by an employee describing gambling losses.
“We know that we’re not perfect, and have made mistakes in the past,” Penn Entertainment executive Michael West told commissioners in the meeting. “We own those mistakes. We’ve learned from them. And we strive to continue to be an industry leader in responsible gaming.”
