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Sports Betting Ad Restriction Proposals Show Online Gambling Industry Has Public Image Problem

Written By Derek Helling | Updated:
red banned stamp on television

As regulated online gambling in much of the US is still in its infancy, legislators and regulators in the various jurisdictions are still feeling out a comfortable framework that tries to balance creating a healthy regulated space for gaming while simultaneously providing the best protections for people who deal with gambling-related behavioral pathologies. Online sports betting, in particular, has been a heavy part of that discussion lately.

Although revenue from sports betting represents a small portion of what gaming licensees across the United States bring in, it gets a lot of attention in the public sphere. That has included recent proposals to restrict advertisements for the gambling vertical.

Despite the efforts of online gambling companies to police themselves on sports betting ads and invest in resources that experts call for, legislative efforts to restrict marketing are proof that public sentiment toward online gambling licensees has a robust negative aspect. Those sentiments could prevent the legalization of online casino play in more of the United States.

Lawmakers take aim at sports betting advertisements

Restricting advertisements for sports-connected gambling products seems to be the trend for policymakers across the US. That applies on the federal level. For consecutive years, US Rep. Paul Tonko of New York has introduced legislation that would place several restrictions on sportsbook ads. The newest version, the SAFE Bet Act1, proposes to:

  • ban sports betting ads during live sporting events
  • outlaw the use of language like bonus and odds boosts within advertisements
  • prohibit sportsbooks from distributing materials that show audiences how to gamble or explain how wagers work
  • restrict sports betting advertisements on broadcast media to the hours of 10 p.m. to 8 a.m. local time

State governments have also been active on this front. For example, Ohio Rep. Bill Seitz explained that a 2023 law that doubled the tax rate for sportsbooks in the state was enacted “to curb the excessive advertising by the mobile app licensees.”

A different approach surfaced in New York in March. S1550 would require sports betting ads to include warnings about the addictive potential of gambling. A legislator in Louisiana has proposed banning all advertising for daily fantasy sports and sports betting in the state.

That lawmaker, Louisiana Rep. Shaun Mena, said the measure is necessary to protect his constituents.

Mena speaks to motivations to restrict sports betting ads

Mena minced no words regarding how he sees the issue of sportsbook advertisements in his state.

“In Louisiana, [there are] thousands of families who are impacted by problem gambling each year,” Mena stated. “It is my belief that deceptive advertising practices are currently being used to target impressionable young adults. Companies like FanDuel and DraftKings entice vulnerable populations into sports betting by offering ‘no sweat’ or ‘no risk’ bets, but these same companies are not transparent about the risks associated with gambling. I feel this issue needs to be legislated to protect Louisianans from predatory advertising practices that encourage gambling and create addictions in our State.”

Mena adds that he has not yet had any discussions with any fantasy or sportsbook licensees in Louisiana regarding his proposal, but he is open to such conversations. He also shared that he has “not taken the chances of HB 727 being enacted into account.”

Mena was mum as to why his bill narrowly targets daily fantasy sports and sports betting advertisements while letting Louisiana casinos continue advertising their other gambling products. That’s an appropriate example of how advertisement restrictions may help deter but do not provide an easy solution to problem gambling.

Experts call advertising restrictions a win

Regarding these proposals, a counselor and two social workers with Lynn Zakeri LCSW Clinical Services2 said they believe they could help in addressing problem gambling.

“I believe that implementing this measure could significantly reduce the number of individuals struggling with gambling addictions,” said David Krzysko, LCPC, EMDR. “The art lies how in how Congress and states intend to alter the language and messaging of gambling, which always requires a fluid approach. Advertising agencies are adept at finding loopholes and alternative strategies; they are inventive, creative, and resourceful. If there’s a will, they will find a way.”

Ellen Lazar, LCSW, CADC added that “limiting the promotional language in marketing is certainly a start but it’s not enough to impede gambling’s addictive lure.” Zakeri shared her opinion that “if people know their actual chances of winning, it could potentially be helpful.”

The over-arching theme from Krzysko, Lazar, and Zakeri is that a complicated issue needs a multi-faceted solution. They divulge what other steps they would like government officials to take.

A comprehensive approach is necessary

Zakeri states that “prevention…is always the goal as in order for treatment to work, someone has to acknowledge the problem they have.” She adds that messaging could be effective at preventing people from developing gambling-related behavioral issues in the first place.

“I have seen clients give up sleep, work/school, and social obligations in order to stay apprised of ‘stats’ on sites like DraftKings, etc.,” Zakeri explained. “I have seen clients begin naively thinking that gambling is just fun; then they owe a lot of money and receive threats. These stories might resonate more than a billboard with a black box warning under the ad for the casino.”

Lazar said more investment in resources for mental healthcare in general and targeted to gaming-related issues would also be of great aid.

“Adding further flame to the fire is that most addictions contain co-morbid mental health issues,” Lazar elaborated. “If [there are] community-based publicized resources, i.e. Gamblers Anonymous, qualified addictions mental health counselors (visible and present in high-risk areas), along with clergy and trusted community leaders, it could reap rewards that extend beyond numbers. It could mean a constructive change of lifestyle for people. Coming back from addiction also ‘takes a village.'”

Krzykso agrees, saying that “more government treatment programs/options for gambling addictions as an affordable option” would be of great use. Gambling licensees across the US have invested in such resources.

Gambling companies’ decisions and investments

As these proposals have surfaced, gaming licensees across the country have responded. For example, in 2023 the American Gaming Association (AGA) banned the use of the term “risk-free”3 in advertisements for its members.

The AGA is a premier trade organization for gaming licensees in the US, counting the vast majority of online gambling providers as its members. Simultaneously, gambling companies have invested in better and more resources for people who struggle with problem gambling.

As an example, both BetMGM and FanDuel have partnered with Kindbridge Behavorial Health to provide counseling to people who have excluded themselves from gambling opportunities in multiple US jurisdictions free of charge.

At the same time, those efforts may not go as far as officials like Mena and Tonko would like to see them go. A 2023 study showed4 that ad impressions from January through August of that year rose by 25% compared to the same months in 2022.

Additionally, as Krzykso alluded to, there is other verbiage besides “risk-free” that legislators would like to ban in sports betting ads. Those actions show that legislators feel that their intervention is necessary. It could also make the further expansion of online gambling across the US a hard sell.

Perception becomes reality in many ways

Even though it remains illegal in most of the US, online casino play is far more lucrative than sports betting for gambling licensees. In the few states where both forms of gambling are legal online, online casino action tends to produce about two or three times the revenue that online sports betting generates for licensees.

Thus, expanding the map for online casino products is of paramount interest to gambling companies. The perception that these licensees need acute regulation because, without it they are acting improperly, could make legislators hesitant to open up more options for online gambling.

At the same time, that hesitancy could overlook other factors, like the availability of offshore online casino sites. These illegal channels for online gambling are making zero efforts to self-police their advertising language and contributing zero investments toward resources for people with problem gambling.

With a lack of legal options in most US states, the fears of legislators that problem gambling will run rampant in their constituencies could become self-fulfilling prophecies. Painting online gambling licensees with a broad brush as predatory could drive them to live up to that reputation.

Gambling companies are dealing with a public image problem on this front. To some degree, however, they have nowhere to look but in the mirror for the blame. Lawmakers must also realize that they can’t simply outlaw gambling-related behavioral problems.

As Lazar said, addressing the issue of problem gambling takes a village. Gambling companies and legislators must be active residents of that village who aren’t working to sabotage each other. It is possible to create a regulated system for online gambling that allows gaming companies to make a profit while still providing adequate consumer protection, including responsible gambling initiatives.

Everyone involved must keep creating such a system as the goal. The reckless pursuit of higher profits or short-sighted political crusades to garner votes do more damage than good in the long run.

Sources

  1. SAFE Bet Act outline ↩︎
  2. Lynn Zakeri LCWS Clinical Services ↩︎
  3. AGA Responsible Marketing Code for Sports Wagering ↩︎
  4. Sports Betting TV Ad Transparency Report ↩︎
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Written by
Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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