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New York regulators approved a set of proposed rules on Monday (February 27) that would enact new marketing restrictions on college campuses and severely limit affiliate marketing agreements.
The New York State Gaming Commission (NYSGC) is proposing rules that would, among other limitations, hold operators responsible for the conduct of third parties marketing on their behalf, and prohibit marketing on college campuses.
In addition, the rules add specific terminology, including “free,” “cost-free”, and “free of risk”, to its list of prohibited terms to describe marketing offers.
The commission was one of the earliest adopters of regulations prohibiting the phrase “risk-free” from marketing language, a step that several other states have since followed, leading to operators phasing out the once-ubiquitous term from their promotional materials.
“Since the commencement of mobile sports wagering commission staff has consciously monitored the marketing and advertising practices of our licensed operators,” said Robert Williams, executive director of the commission.
“We maintain review of the advertisements for the purposes of ensuring that they contain mandatory problem gambling messaging, and that the language of the advertisements is not misleading.
“We are cognizant, however, that sports wagering marketing and advertising has come under increased scrutiny,” he continued. “While the package may not address all commission concerns, staff believes that it's a good starting point.”
Some of that increased scrutiny came from commission chairman Brian O'Dwyer, who pushed for NYSGC staff to author stronger advertising restrictions.
“After one year, it's obvious that the introduction of legal online sports wagering has been a net positive to people in New York,” O'Dwyer said. “However, the commission is also cognizant that along with the success comes the potential for problem gambling and irresponsible placing of wagers.
“After further review, we find additional steps are necessary to achieve the goals of our legislative mandate,” he continued. “I am satisfied that the proposed regulations are an important initial step in addressing the concerns of the commissioners regarding the targeting of colleges campuses for the promotion of mobile sports wagering."
The New York proposal also features similar language to an issue that was being discussed almost simultaneously Monday in Massachusetts, which would restrict the types of affiliate marketing agreements that have been reached in many other jurisdictions.
The new proposed rules would specifically prohibit agreements where “compensation for such services is dependent on, or related to, the volume of patrons, wagers placed or the outcome of wagers,” seemingly curtailing not just revenue-share relationships but cost-per-acquisition affiliate agreements as well.
Following Monday's initial approval, the proposed New York rules will now require a public comment period and another vote by the commission to officially adopt the rules.
However, the commission did vote to finally adopt new advertising rules that restrict the state's licensed lottery couriers, such as Jackpocket or Lotto.com, from indicating that customers can “play the lottery” or “buy lottery tickets” when marketing their service within New York.
Couriers argued in comments submitted to the commission that restricting that type of advertising would only confuse the public as to what they were actually playing, but commission staff said that the effectiveness of the marketing only underscored its point that customers were not actually buying a lottery ticket when they place an order with a courier.
“This proposed rule is meant in part to ensure a truthful transparency about the nature of the order transaction and to mitigate the reputational harm to the New York Lottery brand, if, for example, a lottery courier service customer placed an order before an especially lucrative jackpot such as Mega Millions or Powerball, if a lottery courier service failed to follow through and purchase the ticket,” Williams said.
“The customer has not in fact played the lottery for that drawing,” he added.
