U.S. Regulators Warn Of Sports-Betting Ad Crackdown

September 14, 2021
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An overabundance of sports-betting advertising led two influential state gaming regulators on Monday to urge the industry to find a balance between competition and over-saturation, or risk a legislative backlash.

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An overabundance of sports-betting advertising led two influential state gaming regulators on Monday to urge the industry to find a balance between competition and over-saturation, or risk a legislative backlash.

Dan Hartman, director of the Colorado Division of Gaming, said there are 25 sportsbook operators in his state, so there are an awful lot of companies pushing for an advantage.

“When you create a system like we have … with so many people, it really is a balance,” Hartman said.

“What we are seeing is a lot of ads and we are starting to get a bit of feedback from legislators and other folks that there is too much.”

Hartman said even after establishing such a competitive sports-betting market in Colorado, lawmakers were not expecting this much advertising.

He cautioned the industry to find a balance, “because the last you want is to have advertising legislated.”

The chief gaming regulator in New Jersey agreed, saying the industry “needs to get its act together and establish best practices because if you don’t, we will.”

New Jersey Division of Gaming Enforcement director David Rebuck said he does not want to see a repeat of the daily fantasy sports advertising wars of 2015 that had lawmakers considering a change to the industry’s unregulated status, and the FBI and state attorneys general investigating DraftKings, FanDuel and other companies’ business practices.

“That’s a lesson to be learned,” Rebuck told attendees of an hour-long webinar on responsible advertising and internet gambling hosted by iDEA Growth and GeoComply.

In New Jersey, regulators have traditionally had oversight of gaming industry advertising since the state’s brick-and-mortar casino industry was established in the late 1970s.

Rebuck said the challenge is adapting regulations that were established for traditional land-based operations with an industry that now includes online casino gaming and mobile sports betting.

He noted that the forms of advertising available to companies are also different now.

Traditionally, the gaming industry relied on newspapers, television and mailers to reach consumers, compared with online companies today advertising beyond those methods via online and social media, plus through different forms of content such as podcasts.

“Yesterday was the first big day of football and I think we can all remember how the NFL has limited sports wagering advertising in their games while others have not,” Rebuck added.

The NFL is allowing up to six gambling advertisements during game broadcasts this year for the first time, enabling seven league-authorized partners — Caesars Entertainment, DraftKings, FanDuel, Fox Bet, BetMGM, PointsBet and WynnBet — to purchase advertising inventory.

But there is no limit on ads shown prior to or after an NFL game or on a different television network, radio or online.

“I think that gets to part of the concern with saturation with the product where some have chosen to limit advertising and others have not,” Rebuck said.

“If the industry does not control itself the government will step in and certainly create standards that they may not want.”

Beyond U.S. fantasy sports, there are also clear precedents for advertising crackdowns to quickly follow liberalization via harsh restrictions introduced in recent years across Europe, including in Italy and Spain.

In terms of current rules, Hartman said regulators took their cue from other states that legalized online sports betting before Colorado, especially in the area of preventing deceptive advertising.

But Hartman also focused on the oversaturation of sports-betting ads on television, saying the industry is risking consumers tuning out the message these companies are trying to get across.

“They are not going to be as effective,” Hartman said. “The alcohol industry has an association that is not just racing to the top but actually working together to make sure advertising is controlled internally within the industry and not turning it over to the government.”

Rebuck said he knows advertising has become a key issue when even former Democratic state Senator Raymond Lesniak, who played a key role in overturning the federal ban on sports betting and was a chief sponsor of legislation for internet gaming in New Jersey, calls him to complain about the number of ads on television.

Rebuck agreed that there are lessons the gaming industry can learn from what the tobacco and alcohol industries have done and gone through to establish higher levels of protection in their content.

“There are two groups of people that regulators are most interested in protecting,” Rebuck said, being “the underage, in our case anyone under 21 is banned, and responsible gambling, which I would say is the at-risk population and compulsive gamblers.”

Rebuck cautioned the industry not to ignore responsible gambling content in advertising.

He suggested gaming companies interact with responsible gaming groups who could provide guidance and even help with content that could be perceived as being overly attractive to compulsive gamblers.

“I recognize that this is a challenge for the gaming industry because our state law requires certain responsible gaming features that other states do not,” Rebuck said. “But if you are advertising in New Jersey you better have those standards in play.”

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