American Gaming Association Claims Mischaracterizations In New York Times Series

November 22, 2022
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The New York Times published its long-awaited series on the expansion of sports betting in the United States this weekend, criticizing the industry for overly lofty projections for tax revenues and marketing partnerships that target college students.

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The New York Times published its long-awaited series on the expansion of sports betting in the United States this weekend, criticizing the industry for overly lofty projections for tax revenues and marketing partnerships that target college students.

The four-part Times series entitled “A Risky Wager” focused on four areas of the industry: the influence of sports-betting operators in lobbying efforts; partnerships between operators and American colleges and universities; a perceived lack of oversight from regulators of the growing industry; and the role of Barstool Sports chief Dave Portnoy and the tie-in between Penn Entertainment and Barstool.

The Times’ report claimed the gambling industry used “dubious data to push to legalize sports betting” and that, upon analysis, the projections of tax revenues offered to state legislators in the pursuit of legalization were “wildly optimistic.”

In addition, the Times highlighted several regulatory issues that have been a source of criticism in the U.S., including the comparatively low penalties for violations in states, typically in the tens of thousands of dollars or less, compared with international jurisdictions, where fines frequently reach nine figures or higher.

The report also questioned the issuing of temporary licenses for sports betting, generally awarded by states to entities who have already launched in other U.S. jurisdictions to expedite the launch of sports betting pending permanent licensure.

“The federal government doesn’t regulate sports betting,” the report said. “A Times survey of states that have legalized such betting found that the enforcement of rules has been haphazard, that punishments have tended to be light or nonexistent and that regulators are counting on the industry to police itself.”

The American Gaming Association (AGA) took issue with this characterization, issuing its own statement in response to the story on Sunday night (November 20).

“As unapologetic advocates for our industry, the AGA engages with the New York Times and any other outlet to share facts and perspectives,” the AGA said. “Despite these efforts, there are several mischaracterizations in the Times' recent reporting on the legal sports betting industry.”

“We're heavily regulated by the federal government and thousands of dedicated professionals across legal gaming jurisdictions set & enforce regulations,” the AGA continued. “There's a high bar to clear to receive and retain a gaming license and any assertion to the contrary is false.”

The series was particularly critical of partnerships between sportsbook operators and colleges, highlighting deals between Caesars Entertainment and Louisiana State University, as well as PointsBet and the University of Colorado-Boulder.

Tom McMillen, president and chief executive of the LEAD1 Association, which represents college athletic directors, said Monday (November 21) that the New York Times articles underscore the need for federal regulation of sports betting.

“The legal sports betting market is exploding in the U.S. and so much more accessible than the illegal market,” McMillen told VIXIO GamblingCompliance in an email.

“But it comes with risks. As I have said before, there will be a sports betting scandal on a college campus in the U.S. — the question is when?”

McMillen, a former Democratic congressman from Maryland who attended Oxford University on a Rhodes scholarship and later played for three teams in the National Basketball Association, said the wellbeing of college athletes should be paramount when considering sports betting.

“Other recent changes in college sports such as the intersection of NIL (name, image, likeness) and sports betting, athletics departments partnering with sports betting entities, and conferences selling their data rights to sports books, highlight the many new risks associated with legalized sports wagering,” McMillen said.

“It is therefore incumbent upon the college sports enterprise to educate college athletes and other relevant stakeholders about sports wagering and its possible unintended effects.”

The New York Times series is the most prominent review to date of the U.S. sports-betting industry from a major news outlet, and the question now for the industry is what kind of effect it may have among legislators and regulators going forward.

Critical news articles have frequently been cited by critics of sports-betting legislation in recent years in hopes of either killing attempts to legalize betting or making changes to pending legislation that are less industry friendly.

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