Fanatics Inc., the online sports-apparel giant, is offering customers up to $150 in merchandise credit if they sign up for and use its new betting app at the start of the NFL season.
The promotion, which begins Friday and lasts through Sept. 18, is available to new customers placing a cash wager of at least $50, the company said.
Fanatics is trying to stand out in a field already dominated by competitors like FanDuel Inc., the US market leader owned by Irish bookmaker Flutter Entertainment Plc, and DraftKings Inc.
“Loyalty and rewards are some of the biggest things consumers are looking for,” Matt King, who leads Fanatics’ sports-betting unit, said in an interview. “We think we can deliver that better than anybody else.”
The closely held company, founded by billionaire Michael Rubin, is a big player in selling team apparel, but it’s new to sports betting. In April, Fanatics launched a gambling app in its first two states: Tennessee and Ohio. It’s trying to quickly catch up with rivals in part through acquisitions, such as the $225 million purchase of the US operations of PointsBet.
That deal, which is closing in stages starting Thursday, will expand its presence to 11 states at the start of the season. More states will be added this year. For now, the company will operate two separate brands: Fanatics Sportsbook and PointsBet, a Fanatics Experience.
Fanatics plans to gain market share by offering a better app experience and unique perks tied to its other businesses, King said. It offers gamblers what it calls “FanCash” — a currency they can use to buy sports merchandise through Fanatics or redeem for bonus bets.
“If someone wins a bet on a given team we might surprise them with a piece of memorabilia from that team,” King said. “There are a number of things like that we can do at scale that no one else can.”
Sports-betting companies typically lose money for years as they spend heavily on advertising and promotions to gain market share. PointsBet had been offering new players as much as $1,000 in credit if they deposit at least that much with the company.
Fanatics will lose less money in the beginning than other sports-betting companies by using its database of about 100 million consumers, said King, a former chief executive officer of FanDuel. Instead of spending heavily on marketing, Fanatics can email fans in its database with targeted offers, like a “bonus bet” to a New York Yankees fan who bought an Aaron Judge jersey, he said.
The company isn’t the only new sports-betting challenger. Penn Entertainment Inc., a casino operator, renewed its ambitions in August by signing a long-term deal with Walt Disney Co.’s ESPN. Penn plans to rebrand its Barstool sportsbook under the name ESPN Bet this fall and be promoted heavily by the cable sports network.
It’s been more than five years since the US Supreme Court allowed states to legalize sports gambling. More than 30 now permit wagering via apps on phones.
King dismissed the idea that Fanatics is arriving too late to the sports-betting boom, saying the history of the internet is filled with examples of early leaders that couldn’t stay on top.
“I could Google headlines from the early days of the search industry and look at Lycos and Yahoo dominating search,” King said. “If you look at most digital categories, the first mover is not normally the long-term winner.”
