Inboxes are about to fill with press releases about Problem Gambling Awareness Month, which starts on Wednesday. The sports betting industry, however, is finding itself at a crossroads of lip service and actually making positive changes.
It is still early in 2023, but concern over how US sports betting operators advertise their products has never been higher. The Ohio Casino Control Commission already fined four operators for going against the commission’s advertising policies, which include not targeting college campuses and not using the word “free” in any promotion that requires a bettor to wager their own money to get those bonuses.
US Rep. Paul Tonko (D-NY) accelerated the issue in early February when he introduced a bill to ban sports betting ads from any medium over which the FCC has jurisdiction. The crackdown would be similar to that on cigarette ads, with TV, radio and internet off-limits for sports betting advertisements.
Free to be me?
So far, it seems operators have mostly responded to Ohio’s rules by removing the use of “free” or “risk-free” in its advertisements. The American Gaming Association, meanwhile, reached out to Tonko to discuss his proposal of an ad ban.
Overall, though, it seems operators and stakeholders are still concerned with what is the best outcome for the industry instead of what is the best outcome for the US.
Sports betting ad bans not new
Anyone familiar with even the near-term history of international sports betting knew a bill like Tonko’s would be coming if advertising practices were not changed.
A look at Europe tells the story of how countries with mature gambling industries treat advertising. An undated op-ed on LawTrust.com breaks down the various partial or total ad bans throughout European countries. Those restrictions are only getting tougher in most jurisdictions.
Crackdown across the pond
The United Kingdom, for example, banned the use of celebrities and athletes in gambling ads last year. Just last week, the BBC reported the government and Premier League could agree to take gambling sponsorship off the front of soccer jerseys.
Spain initiated many changes at the beginning of the Covid-19 lockdowns to limit gambling ads. Many of those changes became permanent later in 2020, including a ban on gambling sponsorships with soccer teams and ad restrictions that only allow gambling ads on TV and radio between 1 am and 5 am. The country also banned promotional offers for new signups too.
Stakeholders making improvements that improve themselves?
Of course, there has been a decrease in sports betting advertisements and promotions recently. Online betting brands spent 8% less on advertising in 2022 compared to 2021, according to Standard Media Index.
That appears mainly to be because operators want to turn their digital EBITDA from red to black to see a bump in their share prices, though. The AGA, meanwhile, said it was engaging Tonko so he could see “why advertising is so important to move people from the illegal market into the legal market.”
There have been a few signs that the industry could change from within, however. Last year, Rush Street Interactive‘s BetRivers partnered with a company to monitor data in real-time to better identify problem gamblers, potentially before a problem even starts. National Council on Problem Gambling Executive Director Keith Whyte told LSR at the time the deal helped move the industry forward on problem gambling practices.
NJ program now underway
The New Jersey Division of Gaming Enforcement launched a similar initiative for all of its operators on Jan. 1. BetMGM announced Friday it would begin prominently feature responsible gambling messages in its ad campaigns March 1.
For the US betting industry as a whole, especially considering its roots where a “shipload” of daily fantasy sports ads in 2014-2015 set off a regulation frenzy, more changes need to come before those changes are made by others.
CHDN sees swing without sports betting
Churchill Downs knew in early 2022 what it had to do to turn its digital business positive: stop running an online sportsbook and casino.
“We are always committed to building long term value for shareholders,” CEO Bill Carstanjen said at the time. “Consistent with this commitment, when we see an investment is not progressing as planned, we will redeploy the capital to other growth projects or return it to shareholders.”
The result is CHDN’s TwinSpires segment, which still includes its online horse betting operation, saw adjusted EBITDA grow $31.4 million for all of 2022. That was helped by a $40 million improvement simply by cutting down on marketing and promotions for the online sportsbook and casino verticals.
Churchill Downs is focused on selling its market access for those licenses now. UK sports betting leader bet365 bought access for Pennsylvania in January through CHDN.
Sports betting earnings calls this week
There are five earnings calls scheduled for this week (all times Eastern):
- PointsBet: 6 pm Monday
- BlueBet: 7 pm Monday
- Endeavor: 5 pm Tuesday
- Rush Street Interactive: 5 pm Wednesday
- Flutter: 4:30 am Thursday
Virginia budget talks continue
Virginia‘s 2023 legislative session may be technically over, but there is still a lot to settle concerning budget amendments.
That includes one key issue for Virginia sportsbooks: whether promo deductions will return for all operators or not.
A Senate amendment would allow all sportsbooks to deduct 1.75% of its monthly handle from taxable revenue as promotional spending deductions. That would reverse a change made in 2022 that limits promotional deductions to the first 12 months after an operator launches in the state.
Del. Mark Sickles, who was behind the 2022 change, is part of the conference committee for budget amendments. His office said it could be a “few extra weeks” before everything is agreed upon.
RSI faces Iowa violation
Rush Street Interactive’s BetRivers is facing a violation in Iowa concerning “credit”, according to the Iowa Racing and Gaming Commission‘s agenda.
The agenda states the hearing concerns a “violation of Iowa Code § 99F.9(7).” That states no sportsbook operator can accept a credit card or “other forms of credit” to wager. More information should be available after Thursday’s meeting, a commission spokesperson told LSR.
Elsewhere, former Rush Street CEO Greg Carlin sold 50,000 RSI shares at an average price of $4.31 on Feb. 17. He now owns 1.354 million shares directly and 575,090 indirectly through a trust.
Bet on mini golf this week
A few US jurisdictions will be able to bet on mini golf this week courtesy of the Pro League Network.
The World Putting League Championship will debut Monday with DraftKings and Betfred taking bets on the event.
Colorado and Wyoming approved the event, while Connecticut and Oregon will “likely” allow betting on it, a PLN spokesperson told LSR.