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Going Too Far

Do sports betting operators need to pull back and to limit how much they advertise?

Going Too Far

Last month, Major League Baseball Commissioner Rob Manfred said that most games would now have two pronged broadcasts—one the normal play-by-play and the other featuring gambling potentials.

As someone who rooted for sports betting to be legalized over the years—since 1992, actually, when New Jersey voters approved sports betting for their state, only to be crushed by the politics of the time—this disturbs me.

I’ve heard many complaints from sports fans that they can’t watch the games without a sports betting advertisement sandwiched in during every break in the action. The dedicated sports bettors tell me that they already have a mobile app that they use most of the time, and those ads only serve to annoy them. And whether your celebrity pitchman is Jamie Foxx, Kevin Hart or the Manning brothers, it doesn’t matter to them. Just stop.

The same thing happened when daily fantasy sports was legalized in the U.S.—or I should say, DFS companies realized that no one was going to stop them. The DFS advertisements dominated every sports event, leading to lots of backlash and several state attorneys general trying to halt the spread of DFS. It also turned lots of viewers off the same way as the sports betting ads. Today I think, did we learn nothing from that experience?

To be fair, however, DraftKings and FanDuel wouldn’t be the dominant sports betting apps today if they hadn’t accumulated the contact info of millions of DFS fans at that time.

And let’s note that the American Gaming Association has issued a “best practices” guideline for sports betting advertising, but it doesn’t look as if most of its members are following that missive.

In the past couple of years, there has been backlash in Europe about these online sports betting promotions. Premier League teams in the U.K. have been urged to drop sponsorships by online sports betting sites (although they have resisted giving up that lucrative revenue stream). Gambling advertising has been banned in Spain and Italy and other European countries.

Regulators and legislators in the U.S. have taken note of the excessive advertising and promotions. In February, a congressman from New York suggested a federal ban on advertising sports betting. In May, at the UNLV Conference on Gambling and Risk Taking, a panel on sports betting advertising estimated that more than $725 million was spent advertising sports betting, and pointed out that the avalanche of ads continues despite no research being done to study its impact. Ohio has fined sportsbook operators more than $1 million for failing to take advertising limits seriously.

Remember, sports betting has been legalized in so many states because operators claim to be able to protect consumers much better than illegal online sports books. But is that true? How much of this is lip service versus serious programs that can identify problem gamblers and their characteristics? Again, no research has been done to quantify this.

The answer, in my humble opinion, is for sports betting operators to pull back—to limit how much they advertise, the way they advertise and to whom they advertise.

In Europe, affiliate marketing sites drive players to the online sportsbooks and casinos. But there is little or no regulation covering affiliates in that area. In the U.S., most states require some kind of regulatory registration for, or licensing of, affiliates. But lots of those affiliates are also shilling for illegal online sportsbooks, casinos and poker rooms, and nothing is done about it. So what good does affiliate registration with a regulatory agency do if there are no rules or regulations, or if there are rules and regulations that aren’t enforced?

In many cases, the operators are desperate for new customers and really don’t care if they get fined a few thousand dollars if their campaign actually works. At this point in the infancy of sports betting, there are five operators that dominate the market, accounting for more than 90 percent of the bets made. Companies that are trying to cut into those margins will do almost anything to increase their market share because the end is near if they can’t become profitable—and even some of the five top operators are still not profitable.

So it’s time for the adults in the room to take over, because if that doesn’t happen, the legislators and the regulators will. And we know from experience that is not the preferred route.

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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