If fines levied against operators in Ohio are any indication, regulators in sports betting states will be pushing responsible gambling measures front and center when it comes to advertising in 2023. And more and more griping from the industry will fall on deaf ears, and rightfully so, according to Gambling.com.
The industry had a chance to be front-and-center in exercising restraint in this situation and failed. Now lawmakers and regulators will decide the fate of advertising.
Take Minnesota for example—HF 2000 bans sports betting ads in taxis, for-hire vehicles like limos, bus stops and airports. Other states will likely follow.
The best operators can hope for is providing input, as long as it’s done with serious intent without blaming all the regs for driving away customers. That will also be ignored.
Gambling.com recommends that the industry pick its battles and more importantly, accept that it won’t like the results. Then maybe the industry can minimize the damage and ensure states don’t go berserk with a bunch of ineffective rules and laws.
“The industry must wholeheartedly agree to good policy recommendations and offer alternatives to bad policies. The more it argues every point, the less authority its arguments will have,” said Gambling.com.
For example, the industry is opposed to limiting the advertising of bonuses and promotions. Instead of arguing against the policy, which would likely lead to a compromise neither side agrees with, it could say that a better approach is more transparency and less small print around these promotions.
Seven-figure fines are on the horizon. The industry has to draw the line in the sand, an unfriendly but acceptable line.
Regulatory bodies nationwide aren’t unaware of what is happening in the Ohio sports betting market, and in Massachusetts. Everyone will continue to bulk up their responsible gambling and advertising policies, and the baseline will be the strictest states.
That’s why the industry must draw lines in the sand right now. But not lines where they want them; they need to be unfriendly but acceptable to the industry.
Not only will Massachusetts decide on the fines for violations but will decide how to control the flood of advertising already coming over the TV and billboards and social media.
In early March, the Massachusetts Gaming Commission passed a temporary waiver to permit revenue-sharing deals between sportsbooks and third-party groups such as websites, apps and cable companies. The waiver ends April 14 at which time the commission should have new more permanent rules to deal with the situation, according to the Statehouse Reporter.
One of the options under review is a ban on third-party deals if it includes a tie in to the number of new customers or the number of bets. If the commission passes the proposal, it could be the strongest regulation against this kind of marketing in the country.
While that decision awaits, Attorney General Andrea Campbell sent a nine-page letter to the commission urging them to establish “meaningful guardrails governing how mobile sports wagering is marketed and promoted. Any smartphone is on the verge of becoming a digital sportsbook. With this expansion, the population of gamblers — and potential problem gamblers — may grow substantially.”
The stakes are worth millions for a tie in with a sportsbook.
In February, three Massachusetts casinos with sports betting brought in more than $25.7 million. Online sports betting began March 10 and operators are signing multimillion dollar agreements with media companies.
The New England Sports Network (NESN) has such a deal with FanDuel which includes commercials, sponsorships and pre-game events featuring the sportsbook. FanDuel becomes the “premiere sportsbook partner” of NESN’s Red Sox and Bruins game day coverage.
Third-party groups claim they offer up useful information for bettors to make informed decisions rather than pick a winner because their uniform has nice colors.
“We make offers through those sportsbooks,” said Lou Monaco, a gaming analyst for the BetMassachusetts.com website. “We’re technically advertising, but it is not like radio or TV where you’re being inundated. It’s more like behind-the-scenes advertising.”
Let’s talk about parlays, why they exist, who plays them, why sportsbooks like when people play them and whether it will take regulators to speak the truth. Or sportsbooks can avoid shining a light on the issue by taking steps themselves to be more attentive to the down side.
For now, legislators and regulators are focusing their energies elsewhere.
A sample of what regulators are regulating:
- Banning certain phrases in gambling ads in Pennsylvania;
- Restricting promotional deals between colleges and sportsbooks in Maryland;
- Maine regulators are dickering with dictating when sportsbooks could advertise themselves on television;
Ah, but Massachusetts regulators have created an inquiry into whether language around the promotion of parlays violates state law. To be clear, the regulators aren’t questioning the legality of the parlay bets. The issue is how the sportsbooks are promoting them, according to PlayUSA.
Parlays have potential. They can allow bettors to take a relatively meager stake and turn a solid profit. Parlays rarely pay off, however.
BetMGM is promoting an NBA parlay in which the bettor would need the Indiana Pacers, New York Knicks, and Philadelphia 76ers all to win their March 20 games outright for the bet to pay off.
BetMGM is offering +190 odds on that wager. Thus, a $12 wager on that market could almost triple that money.
Odds of +190 mean a probability of 34.48 percent. The sportsbook has a 65.52 percent chance of keeping your $12.
By comparison, a -350 straight moneyline bet on the Knicks to win Monday night has an implied probability of 77.78% on the bettor’s behalf. The problem is that this understanding requires a level of experience and knowledge that many bettors might not have.
The problem with promoting parlays is it could speak to creating problem gambling habits by using sports betting as a way to make money and not just for entertainment, like a concert.
Sportsbooks usually have guides to explain parlays, they have to be sought out by bettors. There is little if any initiative-taking effort on the part of ensuring that bettors understand the risk they are undertaking in light of the potential reward.
A bettor who has success with a small stake on a parlay could face temptation to increase their stake in order to chase an even larger profit. A potential snowballing of that could lead bettors to place more risky bets to recoup those losses and eventually a legitimate compulsive gambling issue might develop.
A simple way to increase bettor literacy around parlays would be to integrate more information about the wagers into the user interfaces. For example, the dialogue boxes could include information about the implied probability of bets paying off.
Also, sports betting apps could simply limit the frequency with which they promote parlay bets. That might be the most unlikely option, however, because of the high margin of victory for such markets.
