Fanatics Sportsbook has agreed to pay a $20,000 fine in Colorado after a VIP team member twice sent promotional offers to a customer who had voluntarily joined the state’s self-exclusion program.

The Colorado Limited Gaming Control Commission approved the settlement on Aug. 27 following an investigation by the Colorado Division of Gaming. The case centers on customer communications that continued after the gambler enrolled in the state program for five years.

Colorado allows customers to place themselves on its self-exclusion register for one, three or five years. During that period, licensed sports betting operators must prevent those customers from accessing betting services and stop sending them promotional material. More than 1,200 people currently appear on the state register.

The program was introduced after concerns about gambling addiction increased following the launch of legal online sports betting in Colorado in 2020.

Fanatics Contacted Excluded Customer Twice

The customer involved in the case entered Colorado’s self-exclusion program on Jan. 15, 2026. On Feb. 1, a Fanatics VIP team member sent the individual a text containing a promotional offer.

Fanatics identified the issue on Feb. 4, notified its VIP leadership team and distributed training materials to customer-facing VIP employees. Despite those measures, another member of the VIP team contacted the same customer on Feb. 17 with a second promotional offer.

The Colorado Division of Gaming concluded that the two messages breached state requirements and showed that Fanatics had failed to implement its own responsible gaming policy properly.

In October 2025, Fanatics had stated in its responsible gaming plan that it “will not intentionally market to any known Self-Excluded individuals.”

The company acknowledged the regulator’s findings and voluntarily settled the matter. Alongside the financial penalty, Fanatics agreed to examine its marketing activity involving self-excluded customers.

The audit will cover text promotions sent between Jan. 1, 2024, and March 1, 2026. Fanatics must determine whether other people on Colorado’s self-exclusion list received similar communications during that period and provide the Division of Gaming with a detailed report.

The operator also agreed to strengthen training for its VIP staff, with additional attention to responsible gaming procedures and regulatory risks.

The regulator’s action applies to a specific compliance failure and does not represent a final finding that Fanatics intentionally targeted self-excluded customers. The settlement focuses on the two promotional contacts identified during the investigation and the company’s obligations under Colorado law.

VIP Marketing Faces Greater Scrutiny

The incident also highlights the regulatory sensitivity surrounding VIP programs. Sports betting operators use these programs to provide selected customers with promotional offers and other benefits based on their betting activity.

Critics of the industry have questioned how operators identify high-value customers, particularly where frequent betting may coincide with substantial losses or problematic gambling behavior.

According to The Denver Post, Danny Funt, author of “Everybody Loses: The Tumultuous Rise of American Sports Gambling,” has reported that VIP customers represent a small proportion of a sportsbook’s overall customer base while generating a much larger share of revenue.

“The perks to keep those customers loyal (and losing a staggering amount of money) are unbelievable,” Funt wrote on Twitter in January. “But to qualify, a former VIP host at DraftKings told me betting irresponsibly is basically a requirement. ‘If your money management is good, you’re probably not going to end up being a VIP,’ he said. Even something as basic as betting a little less than usual when you’re iffy about a particular game can be disqualifying.”

The Colorado case gives regulators a specific example of the importance of separating VIP marketing activity from customers who have taken formal steps to restrict their gambling.

Other US regulators have also recently taken action involving self-exclusion requirements. Caesars Sportsbook reached a settlement with the New Jersey Division of Gaming Enforcement in August involving almost $300,000 after an investigation found several violations, including circumstances that allowed self-excluded customers to bet through other platforms.

Colorado Expands Player Protection Rules

The Fanatics settlement comes as Colorado continues to tighten its rules for online sports betting.

Legislation signed by Gov. Jared Polis in June introduced additional restrictions covering sportsbook marketing and account activity. The measures prohibit push notifications and text messages that encourage inactive customers to gamble. They also prohibit credit cards for account funding and limit customers to six deposits per day.

The legislation further restricts advertising directed at anyone under 21 and prevents operators from using certain promotional phrases, including “bonus bet” and “no sweat.”

An earlier version of the legislation included a proposal to prohibit all proposition bets. Lawmakers removed that provision after a fiscal analysis estimated that such a ban could reduce state tax revenue by $2.4 million.

Colorado’s measures have also attracted attention from lawmakers in other states, including Pennsylvania, where legislators have cited the state’s approach while considering additional safeguards for online gambling.

Fanatics has operated its Colorado sportsbook since taking over PointsBet’s local business in December 2023. PointsBet had previously agreed to spend $1.6 million on a University of Colorado Boulder deal intended to promote sports gambling on campus. The agreement was canceled in March 2023 after facing significant criticism.