The biggest story in the legalized sports betting industry right now isn’t the upcoming NFL Draft, it isn’t the Nikola Jokic potential MVP three-peat, and it isn’t which team is best positioned to win the World Series.
Nope. The biggest story in sports betting right now, at least for those inside the industry, is the way legislators and regulators have started questioning how much leeway the operators should have when it comes to advertising their legal product.
On Monday, four chief regulators met up for a chat at the Seton Hall Law “Gaming Law, Compliance, and Integrity Bootcamp” in Newark, New Jersey, and they offered four different perspectives on how to handle the issue, running the gamut from a top-down approach to more of a “let boys be boys” style of regulation.
Robert Williams, the executive director of the New York State Gaming Commission, was clearly looking at the issue from that “top down” perspective.
In recent weeks, the commission has put forth a whole flurry of new rules aimed at advertising in the Empire State, which will now go through a 60-day period of public comment.
"It also seeks to ban operators from advertising on any form of media where there is a reasonably foreseeable percentage of the composition of the audience that is persons under the minimum wagering age.” https://t.co/OSJqRL6w6a #advertising #sportsbetting #gambling
— Kym Frank (@KymFrank) February 28, 2023
“It’s a substantial limitation and imposition of the requirements relative to advertising in sports wagering,” Williams said. “Several of our commissioners were very, very responsive to the New York Times article series, which, while it didn’t reference New York itself, was still things they were looking at, as far as the advertising on college campuses and a lot of concerns from disgruntled individuals that didn’t understand what they were actually signing up for.”
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Williams, when asked by the moderator of the chat, Frank DiGiacomo, a partner at Duane Morris LLP, if the operators were brought into the discussion, was forthright with his answer.
“No,” he said. “We went straight ahead with the regulations.”
Williams noted the operators will have their chance to pipe up during the public comment period.
New Jersey engages
Meanwhile, across the Hudson River, New Jersey has taken a very different approach toward working through the advertising hoo-ha.
“When it comes to advertising, I believe at the end of the fourth quarter last year, into the first quarter of this year, there’s been heightened scrutiny of advertising, in my mind driven by the volume of advertising,” said David Rebuck, the director of the New Jersey Division of Gaming Enforcement. “It has led to many questions that New York is addressing through the regulatory process, same as other states.
“But in New Jersey, we took a different tack,” Rebuck continued. “It’s not a top-down approach, dictating what we believe is going to work, but instead it’s presenting problems, getting industry input, and having a dialogue that often results in these new best practices that are then implemented at a certain time for everyone to adjust to and adopt.”
Rebuck said this is pretty much the way the state has handled everything up to this point, from KYC upgrades to cybersecurity, and it’s exactly how the regulator is working through the advertising component with operators.
“We’ve been involved in a dialogue for quite a while now [about] what we’ve identified as essentially the 15 or 16 best practices for advertising,” Rebuck said. “We’re still in a dialogue stage, but there are a series of changes, best practices, focusing on responsible gaming, the content of the advertising, and the placement of the advertising.”
Pennsylvania waits, Colorado hopes
Over in Pennsylvania, Kevin O’Toole, the executive director of the state’s gaming control board, said they are taking a wait-and-see approach, somewhere in between what New York and New Jersey are doing.
“We’re looking at all of these things,” O’Toole said. “I think we’ll wait and see what New York does, we’ll wait and see exactly what Massachusetts does, and then we’ll get together as a unit and see if the seven commissioners think any changes would be appropriate.”
Meanwhile, Dan Hartman, the director of the Colorado Division of Gaming, believes that, in a perfect world, his regulatory agency would take a hands-off approach.
“Everyone was looking at it when we first started because of the volume of advertising,” Hartman said. “But we’re seeing a lot of the volume level out, and it’s not so much about player acquisition but more player retention advertising.”
And as for the messaging the industry puts out via advertising?
“The operators need to get together within their associations and work on those best practices so they’re not being legislated, so they’re not being regulated,” Hartman said. “They [should be] putting their best foot forward.”