New Jersey Revisiting Online Gambling Rules Amid Ad Standards 'Slippage'

December 2, 2021
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New Jersey is preparing new standards on responsible gambling, bonus offerings and cybersecurity for internet gaming and sports betting, a move the state’s chief regulator expects to reduce risks to the future growth of the U.S. market.

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New Jersey is preparing new standards on responsible gambling, bonus offerings and cybersecurity for internet gaming and sports betting, a move the state’s chief regulator expects to reduce risks to the future growth of the U.S. market.

Speaking on the opening day of the SBC Summit North America, New Jersey Division of Gaming Enforcement (DGE) director David Rebuck said his agency was preparing new guidelines in the three areas of responsible gambling, cyber risks and truth in advertising, in response to new technologies and market conditions some eight years after the launch of legal online casino gaming and three years of online sports wagering.

New Jersey already has robust rules in all three areas but “we need to upgrade them and stay current,” Rebuck told SBC delegates at the Meadowlands Exposition Center just outside New York City.

The DGE is currently in dialogue with the New Jersey industry on proposed regulatory changes, having recently concluded a similar process in 2020 to upgrade the state’s know your customer (KYC) standards.

Updates to the state’s regulations are expected to be adopted at some point next year.

On the subject of advertising and promotions, Rebuck told SBC delegates that the DGE formerly required pre-approval of all ads and bonus programs during the first few years of lawful internet gaming in the state, before then relaxing the requirement and instead only performing audits on operators that had grown accustomed to the expectations of regulators in the area.

“Lo and behold, we move forward four or five years and there’s started to be slippage,” Rebuck said, citing the terms and conditions of bonus promotions as one area of focus for the DGE.

“We’re dealing with the industry now in New Jersey, giving them baseline standards, best practices and further guidelines,” Rebuck said. “Because if this slippage continues … the consequences will not be pleasant to either an individual or the company.”

New Jersey’s influential chief regulatory official said updated standards would serve as part of an education process for operators, “changing the mindset and practices to ensure that the advertising campaigns are consistent with the goals of the company but also consistent with the needs of responsible gaming, safer gaming and having the player understand what the odds are of the bonus or promotion so they can make a judgment knowing what is at risk by them.”

Crackdowns on advertising and in other policy areas in the UK and Europe are a clear warning for U.S. operators as to what could happen in the United States if practices are allowed to become lax, Rebuck said, although he expressed confidence that online sportsbook and casino operators were committed to proactively raising standards.

“The industry’s kind of on notice — get your act together, do it the right way, follow consumer protection laws, take the high road, and self-regulate yourself,” Rebuck said.

“I’m optimistic on that and for those who don’t want to join in and be that way … they’re going to be an outlier, they’ll be easily recognized and as regulators, that makes our lives that much easier going after some of those who think they can do things differently and hope they can get away with things that are not acceptable.”

Overall, Rebuck said he remained optimistic as to the future of a U.S. sports-betting market for which “the sky’s the limit, still.”

Although New Jersey is currently the largest U.S. sports-betting state, Rebuck noted that New York will soon launch mobile sports wagering, while California, Florida, Ohio, Maryland and Texas are among others either implementing or developing legislation, potentially expanding the addressable U.S. market by more than 100m people.

That potential expansion is all the more reason for New Jersey to elevate its standards on responsible gambling, marketing and cybersecurity, Rebuck said, “because then it’s going to be much easier for those new states that come up in the future” to copy them.

Advertising has quickly become a hot-button issue in the U.S. as operators battle to capture players during football season across a variety of markets that are either brand new or have only recently launched legal sports wagering.

The policy environment in the UK means some kind of backlash in the U.S. has to be considered a risk and should elevate the importance of industry approaches to responsible gambling, said C.J. Fisher, the chair of the gaming practice group for law firm Fox Rothschild, who joined Rebuck on the SBC panel.

Still, Fisher noted that advertising and marketing standards are already set by most states in their regulations, including through regulatory pre-approvals required in several states.

“So I think as long as regulators are continuing to put a priority on that and innovation continues in the responsible gaming field, I think the risk is relatively low,” Fisher said.

The advertising environment is also likely to evolve quickly, said Andrew Winchell, director of government relations for U.S. market-leader FanDuel.

Operators have tended to advertise very heavily in a brief initial period in order to attract new players and channel bettors back from offshore operators as quickly as possible.

“I think it’s something that’s a shock at first, but I think we need to see how it is controlled over time,” Winchell said.

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