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For online sportsbooks, it’s looking more like March Sadness.
The American Gaming Association will no longer allow the gambling industry to partner with colleges to promote wagering. There will also be bans on using athletes’ likenesses and certain phrases that are meant to sneakily attract first-time bettors.
We Are All Caesar’s
Today, 33 states and Washington D.C. allow sports betting, and just last year, the industry generated $7.5 billion in revenue. But with that market growth comes plenty of societal anxiety. Two million US adults struggle with a severe gambling addiction, according to the National Council on Problem Gaming, and mental health experts fear the accessibility of online sports betting will only increase that number, especially among teens. That has regulators training their sights on the marketing efforts of groups like PointsBet and Superbook.
Caesars Entertainment — the company whose commercials feature comedian JB Smoove as Julius Caesar — has partnerships with Michigan State University and Louisiana State University. In early 2022, LSU received plenty of flack after the school sent out a blast email, offering students — some of whom were not even old enough to gamble — a promotional signup code that rewarded new Caesars Sportsbook accounts with $300 following an initial first-time bet of $20.
The new AGA code intends to foster a more wholesome image for gambling:
- For years, student-athletes and the National Collegiate Athletic Association clashed over whether players could enter into endorsement deals, but in 2021 the NCAA finally allowed it. So while players can now sell branded clothing, sign autographs, and appear in broadcasts and video games for money, the new AGA rule still would prevent them from entering into contracts with the gambling industry.
- Also, sportsbooks can no longer use the oxymoronic term “risk-free” to describe promotional bets as there is a lot of fine print behind that offer. Often used as a first-time bonus, a “risk-free” bet means if you lose, the sportsbook covers you. But only some organizations offer actual withdrawable cash upon a loss, while big names like FanDuel and Unibet pay you back in site credit or another free bet with very specific caveats. That’s about as “risk-free” as a weekend in Bakhmut.
“The code is so important because many sports fans are underage, and we also know that people who gamble on sports have higher rates of gambling problems,” Keith Whyte, the executive director of the NCPG, told the Associated Press.
Enough, Peyton: While the AGA is looking to reign in sports betting advertisements, one New York Congressman wants to do away with them entirely. Last month Democrat Rep. Paul Tonko introduced the slyly named “Betting on our Future Act,” calling sites like DraftKings and FanDuel “predatory.” The gaming industry recognizes the obvious financial ramifications of not being able to advertise on any type of electronic communication, but if that means one less place for the Manning family to pretend to be comedians, we might all be better for it.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
