Sometimes, even the fiercest competitors can join forces if threatened by a third party. Rep. Paul Tonko, a New York congressman, became the third-party threat when he introduced a bill that would ban advertising for sportsbooks on a federal level.
The industry has been universal in its condemnation, no matter where they stand on other issues.
The thrust of their objection is to keep federal paws off of states’ rights when it comes to sports betting. Then there’s this: More than 30 states approved legalized sports betting, and it’s a little late to let the Feds claim ownership at this point.
“With the federal legislation, I think that there’s enough things going on in the country that they don’t have to worry about [sports betting],” Colorado Division of Gaming Director Dan Hartman told Sports Handle. “I can’t think of too many businesses where when you put a federal umbrella over it, that they have done very well,” he said.
A federal ad ban, curtailing ads for anything under the direction of the FCC, could trigger unintended consequences.
“Just like any other ban, I fear that it would be counterproductive, and it may encourage patrons to start betting with black markets,” Martin Lycka, senior vice president of American regulatory affairs and responsible gaming for Entain, told Sports Handle. “Licensees would lose a critical channel to reach the consumers, and that goes hand in hand with responsible gaming messaging.”
Another argument is that the states have taken various pathways on its legalization. Some allow in-person wagers only. Other digital only. Some prohibit betting on college games. And, of course, tax rates are all over the place.
“This is just another example of overreach by the federal government on an issue that SCOTUS said is a states’ rights issue,” said B Global managing partner Brendan Bussmann.
If Tonko’s bill were to be signed into law, gambling ads would fall into the same category as cigarette ads, which are prohibited on the internet as well TV and radio.
While the chances of success are slim, it gets people talking about the issues affecting gamblers, according to Legal Sports Report.
“Our interest is to get in there, see what his concerns are, see what his office’s concerns are, make sure that he understands how we are approaching sports betting and why advertising is so important to move people from the illegal market into the legal market,” Bill Miller, president of the American Gaming Association (AGA), said during the association’s State of the Industry event.
“I will work with anyone to get these predatory and ubiquitous gambling ads off the air,” Tonko said in a statement to Legal Sports Report. “Wall-to-wall advertising campaigns, celebrity spokespersons, promotional partnerships with colleges, and offering thousands of dollars in ‘free’ bets are all extremely problematic tactics.”
Miller spoke with Senator Richard Blumenthal about the issue. The Connecticut lawmaker wants the AGA to stop Caesars and PointsBet from advertising to college students. He called for an end of partnerships with colleges.
“My view was we can only answer for ourselves,” Miller said. “I wanted to make sure that the senator and his office understood what we have done in advance of creating this new industry and that was put the consumer first and make sure that we do learn from these other markets that didn’t get it right.”
States with legal gambling include a problem gambling hotline number in advertising and provide specific wording when it comes to how to take advantage of responsible gaming.
A ban on all advertising may change all that.
“Any such effort only serves to reduce awareness for legal options to the benefit of illegal, offshore operators and the detriment of consumers and communities,” the AGA said in a statement last week. “The proposed legislation would violate well-established free speech protections and undermine the expertise of more than 5,000 state and tribal gaming regulators across the country.
During a hearing in Connecticut last week on a bill that would ban promotional advertising, Michael Ventre, FanDuel’s senior manager/Northeast state government relations, testified that banning promotional ads could “incentivize more Connecticut residents to use illegal sports betting apps,” according to The Day newspaper.
Ventre said, “Advertising promotions is an effective tool to incentivize consumers to break up with their bookie and transition onto regulated platforms ― a goal that is in the best interest of the people of Connecticut.”
The ad issue is a global one and most European countries have been dealing with these issues longer than the U.S.
“This is the most recent potential regulatory headwind over the interactive gaming industry, mirroring gambling regulations seen in Europe (some level of ad bans in Italy, Germany & Belgium),” analyst Barry Jonas of Truist Securities wrote in a recent financial note.
The Italian government in 2018 banned wagering advertising and sponsorships. Here it is five years later, and the government is now revisiting at least one of those bans, as professional soccer teams have complained of financial hardship that analysts predicted would occur shortly after the law went into effect. In addition, some research has suggested an increase has taken place in black-market gambling in Europe.
As Italy considers softening its prohibitions, the Dutch government is pushing for a total gambling advertising ban, while U.K. lawmakers have weighed legislation aimed at preventing “front of the jersey” gambling advertisements, along with other restrictions.
At least one U.S. regulator would agree. Colorado’s Hartman, whose state has more than 25 legal digital platforms, has long been a believer in what he calls “self-regulation.”
“I hope talk of federal legislation gets people thinking about getting a good message out, because I don’t think anybody wants federal intervention,” he said. “It’s really important to listen to what people are saying and try to gear up to that. It detracts from the job that we need to do when all we’re doing is worrying about ads. It’s diverting regulatory resources which are usually scarce.”
In those nearly three years, Hartman has seen ads ebb and flow. He preached patience to newly legalized states while allowing room for operators to pursue customers aggressively, particularly in states with many competitors.
“In Colorado, we’re asking 25-26 operators to come in and compete for market share, and if you don’t let them do that, how are you going to build a market that does the things you want it to do?” Hartman told Sports Handle. “People can bet in any state right now, whether legal or not, so we’re trying to create a safe, legal market for everyone in the state and trying to eliminate the black market.”
FanDuel took the lead in changing its terminology to “no-sweat bets” in July 2022. Sports Handle has reported that other operators, including Barstool Sportsbook, BetMGM, BetRivers, DraftKings, and PointsBet, have also been massaging their advertising and marketing.
The NBA this month became the first professional league to ban the use of the phrase “risk-free” by its partners in relation to promotional bets, while Massachusetts and Ohio have been among states cracking down on that language.
The NFL last year announced that it would limit the amount of wagering ads allowed to six during its broadcasts, but it did not specify what the ads could or could not include.
The Massachusetts Gaming Commission discussed the possibility of banning betting ads during live sporting events and how to control when ads on public transit would be visible. While it found keeping wagering ads off of national sports broadcasts of sporting events appeared impractical, the commission has developed some of the strictest advertising guidelines in the U.S. as it moves toward a March 10 launch of digital operators.
In Connecticut, which has both iCasino and digital sports betting, SB 971 proposes banning operators from using “advertisements offering or advertising financial enticements” to consumers for any kind of online gaming. It would also require that those funding accounts with credit or debit cards only use cards in their name, rather than joint accounts.
The legislation is opposed by DraftKings, FanDuel, and Rush Street Interactive, the only three commercial operators in the state. They say the credit/debit card requirement would be the first of its kind in the U.S. and difficult to adopt and have warned of “unintended consequences” from banning promotional advertising.
“I remember when I saw Joe Camel or the Marlboro Man on the back of Time magazine,” Bussmann told Sports Handle. “I can’t think of any other business where they are told they can’t do X because of the kind of business they are, unless it’s illegal.
“What other industry has come in and been told that it can’t advertise, but it still pays all of its taxes (employment, real estate, excise), and then says tax me another 10 percent on revenue? Name me another business. I can’t think of one,” he added.
