Are US Sports Betting Operators Ignoring Key Lessons From Europe?

Posted on July 9, 2020

It’s been a summer of firsts for the US sports betting industry and its relationships with the sports. 

FanDuel this week continued its recent marketing spree, announcing the “first ever official partnership between a legal sportsbook and a sports media personality.”

The personality in question is Pat McAfee, former NFL punter and now sports talking head. As part of the multi-year deal, FanDuel becomes a “fully ingrained” part of  McAfee’s daily shows, social media content, and podcasts.

That deal was quickly followed by GVC and MGM adding $250 million to Roar Digital’s coffers, with the majority of that likely going toward marketing in the US sports betting sector.

US sports betting companies ramp up marketing spend

Indeed, there has been a string of splashy marketing agreements in recent weeks, including “first of their kind” deals with NFL and MLB teams.

Notably, the deal between PointsBet and the Detroit Tigers was announced the same day as UK lawmakers called for all betting sponsorship to be stripped out of UK sport.

As the UK House of Lords report noted:

“Gambling operators have made hay exploiting the laissez faire regime that has existed hitherto. The unscrupulous methods and ingenuity of some gambling operators makes for shocking reading.”

Betting industries headed in different directions

The timing of the two announcements was coincidental of course. But it served to highlight just how different the sports betting market is viewed on both sides of the pond.

The obvious concern is that the US might be headed down the same path as the UK. Too much advertising and too little regulation ultimately turned public opinion against the sector.

“As someone who has lived through the online betting and gaming boom in the UK, my concern is that’s where the US is now,” said David Briggs, CEO of GeoComply. “The industry in Europe pumped far too much advertising into the general public’s eye, to the point you couldn’t watch any live sport without never-ending calls to bet.”

As a result, neutrals about gambling gradually turned into opponents.

“And then you’re left with only a minority that like it,” Briggs said. “I can’t see any scenario where the US avoids making the same mistakes.”

Everything can change quickly

It’s a logical concern. Look at regulated gambling markets around the globe and they are increasingly protective of their consumers and condemnatory of operators.

Italy already has a gambling advertising ban in place, while Spain is aiming to reduce gambling ads by up to 80%.

“It can move very quickly,” said Joe Saumarez Smith, the chairman of UK-based platform provider Bede Gaming. “It only takes a couple of horror stories to create a big scandal and big backlash.

“The US market is not quite the Wild West, but there’s a lot of exuberance. Regulators seem more focused on technical standards and things like match-fixing rather than player protections. That’s not to say these markets aren’t highly regulated. They are, it’s just the focus is slightly different.”

More protection needed?

US sports betting culture might have a part to play here, with government generally playing a smaller role in peoples’ lives than in Europe. But as Saumarez Smith put it: “At some point, it will become clear you need more consumer protections in place.”

That can include things like affordability checks, and algorithms that detect when players start chasing losses for example.

US operators would argue many of these checks are already in place. But the staking levels in New Jersey suggest they are not as widespread as they should be.

Lesson have been learned

So is there a risk the US online gambling industry’s reputation could become as tarnished and tattered as the UK’s?

Not so, according to Jeff Ifrah, the head of US industry trade group iDEA.

“The UK situation didn’t happen overnight. There were a number of unfortunate scandals that ultimately required a government response. In the US, every operator and regulator is working to make sure there are no consumer protection issues.

“I think in the seven years we’ve had online gambling in New Jersey, there have been literally zero incidents about consumer protection issues in the media. Our operators have learned the lessons from Europe.”

What of DFS?

It’s interesting to consider DFS here. Arguably, that industry followed the same curve as European online gambling: an explosion of adverts, followed by a quick backlash. However, much of the DFS criticism came simply because the sector was entirely unregulated.

That doesn’t apply to US sports betting. And as Ifrah says, betting advertising to date has been much more restrained.

Ultimately the answer to the question about a UK-style backlash on gambling depends on whom you ask. Europeans are convinced it’s inevitable, while Americans believe that important lessons have been learned.

The outcome is still to be determined, but one thing is clear. If US sports betting is ever to become a truly mainstream leisure activity, the sector will need to tread carefully in these early days.

Brad Allen Avatar
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Brad Allen

Brad has been covering the online gambling industry in Europe and the US for more than four years, most recently as the news editor at EGR Global.

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