A recent report from the International Gaming Institute of the University of Nevada, Las Vegas (UNLV) addresses a subject that—until just a few years ago—wasn’t on anyone’s radar. That’s because its subject, sports betting, wasn’t legal back then, at least not in most U.S. states.
Then in 2018, the U.S. Supreme Court kicked aside some logs and overturned the Professional and Amateur Sports Protection Act (PASPA), which ensured that legal sports betting was available to a fraction of U.S. fans. Suddenly, states were tripping over themselves to tap into a new revenue source.
The clamor only increased in 2020, when millions of people were stuck at home due to Covid-19. To fill their idle hours, lots of them started betting at mobile sportsbooks. And even though many big-name league sports weren’t playing, in a pinch bettors showed they were willing to wagered on obscure sports, like English darts, Turkish soccer and Russian hockey.
For a relatively new industry like sports betting, it can be tempting to charge full-speed ahead without thinking much about self-regulation. But according to the UNLV report, “The Marketing Moment: Sports, Wagering, and Advertising in the United States,” it’s better for operators to regulate first, before someone bigger and more powerful does it for them—the government.
Building A ‘Safety Net’
“Sports gambling operators must ensure that advertising does not target vulnerable populations, particularly youth,” the report states. “A public health approach should be taken, with government providing funding for prevention, education, treatment, regulatory and research programs in support of a more holistic ‘safety net.’”
The report also urges the U.S. industry to take the lead in educating customers, employees and communities about responsible gaming. The media, too, should take an active role, “particularly in today’s digitized era,” the report continues. “If a story cites an illegal gambling site, the story should say so explicitly. Furthermore, the public needs to be made aware that offshore sites pay no taxes, that the jobs created are largely (if not entirely) offshore, and that responsible gambling programs for these companies are not overseen by any U.S. regulatory body.”
Report co-author Jennifer Shatley has 23 years of experience in the gaming industry, including 17 years with Caesars Entertainment, formerly Harrah’s where she served as vice president of Responsible Gaming Policies and Compliance. Shatley is now president of the Nevada Council on Problem Gambling and a member of the National Council on Problem Gambling.
Harrah’s was the first gaming company to create a responsible gaming program in 2000, Shatley told GGB News. Before that, she said, responsible-gambling programs were “very passive.”
“Harrah’s implemented the Code of Commitment, a public statement of the standards we were going to hold ourselves to. Our CEO went to all the properties to make sure employees understood its importance.” Harrah’s also launched a “responsible gaming ambassador” program, an industry first, in which casino personnel were trained to reach out to customers who exhibited problem-gambling behaviors.
“Government has a role to play in public health,” Shatley said, “but the question is how can we holistically look at this issue, and at the outset promote in in a healthy way?
“If you look at jurisdictions where (sports betting) has already been legalized, they have addressed it responsibly and ensured that it’s only targeted towards adults,” she said. But such policies “vary across the country. That’s where the Responsible Marketing Code for Sports Wagering, developed by the American Gaming Association, can set a standard across the entire country, rather than this mix-and-match. I’m hoping that most gambling companies will adopt it voluntarily.”
If the industry gets out ahead in self-regulation, she said, that might head off efforts in Washington to regulate it.
Aaron Moore, associate professor of journalism at Rider University in New Jersey, agreed that prevention is the best cure. “Politicians are going to attach themselves to an issue that relates to something controversial,” he told GGB News, “something along the lines of a vice, so they can be sanctimonious in the conversation.
“When someone starts discussing government interference, particularly about what can and can’t be advertised, I get uncomfortable,” he said. “Someone is becoming an arbiter of speech and what’s an acceptable thing in media. And I don’t think that helps anybody.”
But what about the regulation of speech that led to the banning of tobacco ads on television? “That came as a result of a massive lawsuit that had the government essentially penalizing the tobacco industry because it was deceptive,” Moore said. “From what I see in advertising for gambling, I don’t think deception is the basis of their advertising. The gambling industry is selling fun and fun is a very subjective term.”
Most of all, he said, “I don’t think the federal government needs to be involved in gambling when the states are taking it state by state, as the Supreme Court allowed. There are different markets in each state. If the feds try to create a one-state solution, we’ll have the same situation we had” before the end of PASPA. “If the federal government gets involved, it takes a step back from what the Supreme Court said several years ago.”
Interestingly, he pointed out, “I’m in New Jersey, where one of our restrictions is you can’t bet on a New Jersey college (team). But if I cross the state line to Pennsylvania, I could bet on Penn State. One size does not fit all as it relates to gambling.”
No one knows more about sports betting in general than former New Jersey State Senator Ray Lesniak. Lesniak led the charge to overturn PASPA. It was his legal argument that eventually won the day before the Supreme Court and opened the door to legal sports betting across the U.S. He also encouraged mobile sportsbooks, which now contribute 85 percent or more of his state’s sports betting revenue.
Lesniak said his lawsuit “relied on the 10th Amendment and states’ rights,” and the ultimate stumbling block for PASPA was that it applied only to certain states. “They could have just banned sports betting across the nation, but by excepting some states, that impinged on the 10th Amendment.”
Lesniak was happy with the new industry he helped to launch. “The FBI estimates that sports betting is a $300 billion to $400 billion activity” overall, he said. “What I did was bring it from underground to above-ground and made it available for states to gain the revenue that organized crime and offshore sites had. With the advent of the internet, it was easy as pie to place a bet on your favorite sports team.”
But the former senator agrees that sportsbooks must advertise responsibly, and moreover adds that state governments should prevent them from enticing players to gamble more than they can afford.
“I was particularly concerned with BetFair, and how an advertisement talked about how a family used their winnings to put in a new pool,” he said. “You shouldn’t be aspirational to make lifestyle changes. It should be part of the fun. Sports betting shouldn’t be used to fulfill dreams. That shouldn’t be encouraged.”
Lesniak thinks it’s important to monitor gaming advertising, “to be cognizant and take action if it’s over the top, encouraging underage gambling or gambling over your head.”
In New Jersey, for example, the state Department of Consumer Affairs “has enough authority to crack down on advertisements that are ‘enticing’—that don’t encourage responsible betting,” Lesniak said.
“Our Division of Gaming Enforcement is a bully pulpit, which we’re not reluctant to use.”