By: Kurt Russell Jr.
Merely five years ago, sports betting was banned everywhere in the United States except Nevada.[1] Everything changed in 2018 when the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA).[2] Accordingly, states have been acting within their freedom and establishing their own sports gambling laws.[3] Currently, 35 states and the District of Columbia allow sports gambling.[4]
Since the repeal of PASPA, the MLB, NBA, NFL, NHL, and PGA Tour have all entered into partnerships with major sportsbook operators.[5] As the leagues have come to accept sports betting, the industry has exploded over the last few years.[6] In 2021, the American Gaming Association (AGA), reported that $57.2B was wagered, breaking the previous industry record of $43.65B in 2019.[7] After seeing the potential for enormous profits, sportsbooks have been increasing their marketing budget and dumping money into advertisements.[8] Spending on advertisements for online gambling jumped to $725M in 2021, up from $292M in 2020.[9] In context, gambling companies now spend three times as much on advertisements as cereal companies do.[10]
You may ask, “so who’s dropping a bag on these advertisements?” Well, in several states there are more than a dozen bookmakers competing for market share and will do anything to differentiate themselves from the pack.[11] Recognizable through sheer count and repetition of their commercials are FanDuel and DraftKings.[12] Additionally, Caesars Entertainment’s ambitious initial marketing plan was to spend $1B on advertising.[13] Also in the mix is MGM Resorts International (MGM).[14] These four operators give promotional offers to new bettors and bankroll big media campaigns, leading them to account for 93 percent of the television advertisement spending, and in spring 2022, 88 percent of all online sports betting revenue.[15]
According to a survey released by the Television Bureau of Advertising (TVB), broadcast television is the most crucial media influence on those considering betting.[16] 95 percent of respondents stated that the advertisements impacted how they searched online.[17] The consumers who have placed bets stated that after first viewing or hearing one of these advertisements, 46 percent of them opened an account, and 42 percent of them immediately placed a bet.[18] These advertisements are effective but are they maybe too effective and too common? Although the legal age for gambling ranges from 18 to 21 depending on the state, 60 to 80 percent of high school students have reported participating in gambling in the past year according to the National Council on Problem Gambling.[19] Furthermore, there has been a 45 percent jump over the previous year in inquiries to the National Problem Gambling Helpline Network.[20]
With the absence of targeted regulation, sportsbooks face little interference with their advertisements.[21] Most states only require sportsbooks to include the legal gambling age and information about how to seek help as a problem gambler in their advertisements but rarely require anything further.[22] However, there is a growing belief among some states that further regulation needs to be implemented.[23] For example, Massachusetts lawmakers are considering restrictions on sports betting advertisements including: a ban on any marketing that could “disrupt” the viewer’s experience during live sports broadcasts; a limit on promotional betting incentives (e.g., free credits or signup bonuses); and a ban on all forms of advertising unless 85% of viewership is over the age of 21.[24]
However, state regulation comes with legal complexities pertaining to interstate commerce protections.[25] Therefore, without federal law, it would be very difficult for a regulation such as the one proposed in Massachusetts to be upheld.[26] The federal government is currently not regulating sports betting advertisements outside of the blanket statement in the Federal Trade Commission (FTC) Act that advertisers are required to be truthful and not misleading in their messages to consumers.[27]
Other countries, however, have taken a different, more aggressive approach to regulating sports betting advertisements. For instance, Italy imposed a blanket ban on gambling advertising back in 2018.[28] The United Kingdom has outlawed the appearance of celebrities and athletes in sports betting advertising.[29] Additionally, countries such as Belgium, Australia, and Chile are considering ad regulations for the sports betting sector.[30]
Nonetheless, U.S. industry leaders believe that there is no need for federal regulators to intervene.[31] Despite advertisements glamourizing gambling like the beer and tobacco industries have done for their products, some believe the gambling sector can police itself.[32] The American Gaming Association (AGA) has published a set of voluntary standards that sportsbooks businesses could follow when advertising.[33] The standards include not appealing to people too young to gamble and not promoting “irresponsible or excessive participation” in sports betting.[34] Still, the question remains—is the possibility of self-regulation enough or should federal advertisement restrictions analogous to tobacco retailers be implemented?
[1] Richard Janvrin, PASPA Supreme Court Decision: Everything You Need to Know, World Sports Network, https://www.wsn.com/sports-betting-usa/paspa/ (last visited Mar. 12, 2023).
[2] Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461, 1481 (2018).
[3] Janvrin, supra note 1.
[4] Sam McQuillan, Where Is Sports Betting Legal? Projections for All 50 States, Action Network (Mar. 10, 2023, 9:15 AM), https://www.actionnetwork.com/news/legal-sports-betting-united-states-projections.
[5] Dan Holmes, A Snapshot of Sports Betting in America on Fourth Anniversary of PASPA Repeal, Gaming Today (May 13, 2022), https://www.gamingtoday.com/news/sports-betting-fourth-anniversary-paspa-repeal/.
[6] Id.
[7] Joe Hernandez, Sports Betting Ads Are Everywhere. Some Worry Gamblers Will Pay a Steep Price, NPR (June 18, 2022, 5:00 AM), https://www.npr.org/2022/06/18/1104952410/sports-betting-ads-sports-gambling.
[8] Avi Salzman, New Data Show Enormous Growth Rate in Gambling Ads, Barron’s (Feb. 10, 2022, 12:25 PM), https://www.barrons.com/articles/new-data-show-enormous-growth-rate-in-gambling-ads-51644513956.
[9] Id.
[10] Id.
[11] Id.
[12] Michael McCarthy, Sports Betting Operators To Spend Up To $1 Billion On Football Ads, Front Office Sports (Sep. 8, 2021, 12:14 PM), https://frontofficesports.com/football-ads-sports-betting-fanduel-draftkings/.
[13] Id.
[14] Id.
[15] Salzman, supra note 8; Conor Mulheir, July US Sports Betting Market Monitor: Fanduel in Control With 47% of National Market Share, iGaming Next (July 29, 2022), https://igamingnext.com/news/july-us-sports-betting-market-monitor-fanduel-in-control-with-47-of-national-market-share/.
[16] Marketron, Online Sports Betting Ads Offer New Opportunities for Local TV Markets, Marketron(Mar. 22, 2022), https://www.marketron.com/media-mentions/2022/03/22/online-sports-betting-ads-offer-new-opportunities-for-local-tv-markets/.
[17] Id.
[18] Id.
[19] Marsha Mercer, As Sports Betting Grows, States Tackle Teenage Problem Gambling, Pew Trusts (July 12, 2022), https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/12/as-sports-betting-grows-states-tackle-teenage-problem-gambling.
[20] Hernandez, supra note 7.
[21] Id.
[22] Id.
[23] Sam McQuillan, Sports Betting Ads Under Fire by Lawmakers, Action Network (May 18, 2022, 7:52 PM), https://www.actionnetwork.com/legal-online-sports-betting/sports-betting-ads-lawmakers.
[24] Id.
[25] Id.
[26] Id.
[27] Federal Trade Commission, https://www.ftc.gov/news-events/topics/truth-advertising (last visited: Feb. 15, 2023); 15 U.S.C. §§ 52, 55(a).
[28] Hernandez, supra note 7.
[29] Id.
[30] Id.
[31] Id..
[32] Id.
[33] Id.
[34] American Gaming Association, https://www.americangaming.org/responsibility/ (last visited Feb. 15, 2023).
