A truly eyebrow-raising violation of procedures by Fanatics Sportsbook in Colorado related to mitigating gambling addiction.
According to Colorado gambling regulators, a person self-excluded from gambling on Fanatics in mid-January of this year, but the sportsbook tried to induce the person to continue gambling on multiple occasions. The gambler wasn’t identified in a state Stipulation and Agreement document.
About two weeks after the self-exclusion, an unidentified person on the sportsbook’s “VIP” team sent a text with a “promotional offer” to the self-excluded player. Another offer came days later.
Why This Matters
Direct marketing could be triggering to someone experiencing gambling addiction, which is linked to the highest rates of suicide among addictions. Users who are contacted by VIP teams typically lose much larger sums than the average bettor.
It’s unclear what happened following that first illicit text from Fanatics. However, three days later, someone at Fanatics “identified the issue and notified the VIP leadership team.” According to Colorado, these higher-ups “distributed” “training materials” to customer-facing VIP staff.
That didn’t work, however. Fanatics continued to contact the person!
On Feb. 17, the self-excluded gambler received another inducement to gamble from Fanatics.
From there, the state’s report didn’t state what happened or whether there were further communications.
Zooming Out
Fanatics Sportsbook is online in more than 20 states. It’s unclear if the self-excluded gambler in this case had used it elsewhere. Self-exclusion regulations apply on a state-by-state basis.
In 2023, Fanatics said in a company report that it was “adopting a universal limits and self-exclusion approach, which means that fans on the platform can have their state limit and exclusion elections apply nationally.”
It’s unclear if the gambler in this case had their self-exclusion apply nationally.
Fanatics Audit and Penalty
In addition to a $20,000 penalty in Colorado, Fanatics must “audit its self-exclusion list in relation to its marketing materials distributed by text message from January 1, 2024 to March 1, 2026.”
Colorado wants to know if this has been a systemic problem. Fanatics Sportsbook launched in Colorado in December 2023, so the audit covers nearly its entire history in the state.
Within 90 days, the company must provide the state with a report on the audit findings.
Fanatics also agreed to “enhance” training for “all VIP staff” and to “submit training materials and evidence of conducting this training” to the state.
A particularly humiliating part of the Stipulation and Agreement for Fanatics is this assurance to the state that it will comply with the law going forward:
“Respondent assures the Division it will affirmatively and actively, at all times hereafter, comply with the Colorado Constitution, the Colorado Limited Gaming Act, and Colorado Sports Betting Regulations.”
Industry-Wide Problem
Fanatics isn’t the only regulated online sportsbook to engage in direct marketing to self-excluded gamblers in the U.S. Sports gambling regulators in states such as Iowa, Massachusetts, New Jersey, New York, and Tennessee have issued similar penalties against the legal online sports betting industry.
Legal online sports betting appears to be growing increasingly unpopular among Americans. In August, former U.S. Surgeon General Jerome Adams described sports betting as “the new opioid crisis.”
