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Social media influencers would need to disclose when they are paid to make posts by sports-betting operators under new rules being considered by the Massachusetts Gaming Commission (MGC).
Along with the legalization of mobile sports betting in Massachusetts, came an onslaught of social media influencers touting their picks for the latest Boston Bruins hockey game or on a slate of professional football games on any given Sunday.
But those who follow sports-betting influencers could be confused about who was sponsoring a particular Instagram or Facebook post, leading Massachusetts regulators to consider a new regulation to address the issue.
At the MGC's meeting last week a proposal was unanimously approved to begin the rulemaking process to require all “marketing or advertising by or on behalf of a licensed sports betting operator” to include a “clear and conspicuous disclosure describing the financial, employment, personal, or other relationship” with the licensee.
According to the amendment to 205 CMR 256, inclusion of this disclosure would not result in “a waiver of the prohibition against advertising or encouraging patron to place a specific wager” as already outlined in the regulation governing false or misleading advertising.
“We have seen a variety of advertisements on social media that may benefit from a disclaimer identifying that an influencer or spokesperson is in fact being compensated for their statements with respect to a given operator,” according to an MGC statement outlining the proposed amendment.
MGC deputy general counsel Justin Stempeck told the commission that officials were hopeful the rule change would “alleviate any confusion with respect to the advertisements themselves”.
Stempeck said the disclaimer mirrors similar disclosure requirements mandated by the Federal Trade Commission (FTC) and the UK Gambling Commission, which require that any influencer endorsement be accompanied by a statement identifying the commercial relationship between the advertiser and influencer.
FTC guidelines also require influencers to disclose any brand relationships, like sponsorships or complimentary products. Those disclosures should use simple language like “ad” or “sponsored,” and appear at the beginning of posts, video or captions.
Earlier this year, the Tennessee Sports Wagering Council (TSWC) discussed a similar proposed rule to require operators to disclose any agreements with individuals who serve as “a brand ambassador, social media influencer, or in a similar role, as determined in the sole discretion of the council”.
A TSWC spokeswoman on Tuesday (April 1) declined to comment on the status of the potential revision.
Meanwhile, the New York State Gaming Commission held a roundtable with industry compliance representatives to discuss a similar issue on when disclaimers required in formal ads for sports betting also may be required in sports programming featuring or being sponsored by an operator.
Stempeck told commissioners that the proposed rule change was the MGC's “first step in reevaluating” regulations governing the advertising of sports betting in Massachusetts.
Sports betting became legal in Massachusetts in August 2022. Retail sportsbooks began operating in January 2023, followed by the launch of online sports wagering in March 2023.
Commissioner Eileen O'Brien expressed her support for staff continuing to go back and look at regulations.
“I think it is one of the most impactful areas the commission can have in terms of responsible gaming and in terms of being a leader in the space,” O'Brien said. “The fact that marketing and advertising third-party relationships change constantly, I’m supportive of this.”
O'Brien said she was also supportive of MGC staff looking into whether regulatory “language is broad enough to capture these changes without having to keep coming back and amend it and make it too specific so that it becomes outdated too fast”.
Stempeck responded to O'Brien by saying the amendment would establish a new requirement in addition to what is already required.
He anticipated that regulators would receive comments from licensees on the proposed change and the new regulations would not be adopted until a later stage in the rulemaking process.
“I will just use this as an opportunity to plug the fact that we are piecing this together,” MGC chair Jordan Maynard said of advertising rules for sports betting. “This really is a place where the feds could be helpful on this matter; we are doing fine on our own.”
Commissioner Paul Brodeur agreed but noted that the current federal government does not seem likely to step in on regulatory matters such as sports wagering advertisements.
“So, on many respects this work is more important than ever, and what we can do, especially across jurisdictions, is develop a national standard (that) will make a huge difference for folks across the country,” Brodeur said.
