SB 620, introduced by Sen. Shelly Hettleman, plans to prohibit colleges and universities from forming a partnership with a sports betting operator “if the institution of higher education receives compensation for student participation in certain sports wagering.” The bill also hopes to make public the specifics of any partnerships between sports betting companies and universities in Maryland.
Inspired by PointsBet deal
The New York Times reported in November that the University of Colorado formed a deal with PointsBet that included a $1.6 million payment in addition to a $30 bonus for every person that signed up for the app via a referral code. Following pushback, the two sides changed that aspect of the deal.
Upon reading the story, Hettleman wanted to avoid any similar issues in Maryland, especially with the University of Maryland partnered with PointsBet.
“I was horrified at that and thought that should not happen in Maryland,” Hettleman said in a recent interview with Sports Handle. “I quickly picked up the phone and called our flagship university here and said, ‘Do you guys do this?’ And was assured they did not.”
PointsBet confirmed to Sports Handle that the University of Maryland doesn’t receive compensation related to signups.
Hettleman’s bill received a Wednesday hearing in the Senate Energy, Education, and Environment Committee. While no action was taken on the legislation Wednesday, Hettleman says even universities in the state understand the logic behind the bill. There’s optimism about passing the legislation this session, which lasts through April 10.
“I have to tell you, so far, I’m not getting opposition from our university system,” Hettleman said. “I’m pleased about that.”
While Hettleman’s bill would prevent any future deals involving sign-up bonus incentives, it doesn’t prohibit universities from forming partnerships with sports betting operators. Keith Whyte, the executive director of the National Council on Problem Gambling, told Sports Handle in November that the NCPG doesn’t support operators partnering with universities and believes it presents a problem gambling risk.
“The majority of students at the University of Maryland are underage to bet on sports,” Whyte said. “One operator is helping to create additional risk across the entire system.”
Colorado and Maryland aren’t the only colleges to receive criticism for their relationships with sports betting companies. LSU also received negative attention for its deal with Caesars Sportsbook. The sports betting operator also has a partnership with Michigan State University’s athletic department.
In early 2022, LSU students received emails with a sign-up code to start using the sports betting platform. People worried about the possible impact on underage individuals, although concern also extended to eligible students receiving the message.
Any current LSU students get this email today? pic.twitter.com/AGzh6GH8wx
— Robert Mann (@RTMannJr) January 28, 2022
Universities, operators adjust
A seemingly lucrative revenue stream for schools a few years ago, official partnerships with sports betting companies have proven challenging for universities.
“I do think it is fair to say, after LSU and Colorado, schools are asking themselves harder questions about not just whether it’s worth it, but whether it’s logistically possible,” said Matt Brown, publisher of Extra Points, a newsletter covering college sports.
The major logistical challenge involves advertising to college students, as most undergraduate students are under 21 years of age. What can an operator or athletic department do to ensure marketing materials don’t target underaged bettors?
The Ohio Casino Control Commission recently fined PENN Entertainment for a Barstool Sports show hosted on the University of Toledo’s campus. The event host shared a sign-up code for the Barstool Sportsbook, a violation of Ohio’s sports betting regulations given the number of individuals at the show under the age of 21.
Massachusetts regulations make university-operator deals complete nonstarters.
The Massachusetts Gaming Commission prohibits sports betting operators from advertising “on any college or university campus, or in college or university news outlets such as school newspapers and college or university radio or television broadcasts.” Massachusetts recently launched retail sports betting, and mobile sports betting is expected to go live March 10.
Brown says each school’s situation is different as it relates to even being interested in a sports betting deal — don’t expect BYU to add an official sports betting partner anytime soon — but there is another way that schools and conferences could partner with sports betting companies to generate revenue.
“The less controversial way to get involved here is in selling data rights,” Brown said.
The Mid-American Conference, for example, signed a data partnership with Genius Sports in 2022. The deal requires sports betting companies to pay for the league’s data if they want to use official statistics in real time. Could other leagues or teams do the same? It’s certainly plausible.