Opinion: Finding Happy Medium In Sports Betting Advertising Regulation

Written By John Holden on June 10, 2022
sports betting advertising

Across North America, we have seen sports betting advertising restrictions take two divergent approaches.

Through much of the US sports betting market, regulators have been willing to give operators extensive latitude to advertise, to the point that even the biggest advocates are likely annoyed by ubiquity of advertising in many states

Just north of the border in Ontario sports betting, regulators are taking the opposite approach. In Ontario, advertising is so heavily restricted that virtually the only place that can advertise sportsbook promos are the sportsbook’s own websites.

The question that is worth asking is this: does either approach really serve the people that it is supposed to be serving? Is allowing airwaves, buildings, and virtually every possible medium for advertising really in the best interest of the community? Similarly, is restricting factual information about available services really a useful consumer protection strategy, or is it customer protection theater?

(Editor’s note: Legal Sports Report maintains advertising relationships with regulated sportsbooks in the US and Canada. Read more in our advertising disclosure. The views of the author do not necessarily represent those of LSR.)

A Goldilocks problem?

There is, in all likelihood, a point where advertising restrictions are such that they allow for information to flow to consumers and provide the necessary protections to ensure that those who should not be inundated with gambling information are not.

That equilibrium point, however, is likely not at either of the extremes currently being adopted in North America.

The firehose approach permitted in the United States is almost certainly too permissive. If the United Kingdom is predictive of potential outcomes there could be significant costs associated with this permissive approach down the road.

Ontario sports betting advertising rules at opposite pole

On the other extreme is just across the northern border in Ontario, where the new gaming regulator has imposed such significant advertising restrictions that consumers are often left in the dark to find out if they are getting a good deal.

Ontario’s restrictions are such that effectively the only place that a bettor can learn about a sportsbook’s offerings is from the sportsbook’s own website (or app), until they allow themselves to be directly contacted by the operator. The challenge, of course, is with more than a dozen apps approved, someone has to be really committed to finding a good deal.

Most people simply lack the attention span for this. This plays into the hands of the legacy gray-market operators, who have the benefit of a product that consumers are already familiar with, or big brands integrated into TV broadcasts.

The just-not-enough US model?

Speaking in generalities  – which is always risky, but in this case is fair – the United States does not do very much to restrict gambling advertising.

Generally, US regulators have chosen to impose low-level requirements, such as needing to provide a means of contacting a problem gambling program or notifying that a self-exclusion program is available.

It seems most companies are wise enough to not inundate episodes of “Peppa Pig” with sportsbook ads, but that does not mean that children are not being exposed every time they watch sports or, in many cities, walk down the street.

First Amendment looms large

Much of the hesitancy to take a more powerful approach to gambling advertising restrictions in the United States might stem from the First Amendment and the Supreme Court‘s history of striking down restrictions that block advertising of legal conduct.

Two prominent Supreme Court cases, 1999‘s Great New Orleans Broadcasting Association v. United States and 1993‘s United States v. Edge Broadcasting Company has created a barrier that limits how advertising can be restricted to narrow approaches.

The way-too-much model

Ontario has gone the other direction with its advertising restrictions. The AGCO’s standards state:

Advertising and marketing materials that communicate gambling inducements, bonuses and credits are prohibited, except on an operator’s gaming site and through direct advertising and marketing, after receiving active player consent.

The standards are so restrictive that they inhibit industry stakeholders from informing customers about available offerings. The overly restrictive standards are undoubtedly well-intentioned to avoid the flood of advertising that is occurring in the United States.

But by being so overly restrictive, consumers and smaller brands that might not be as well-known are at a competitive disadvantage to either big American brands who feature prominently as sponsors of television broadcasts or brands that served the Canadian market before regulators began regulating.

Why don’t you just meet me in the middle?

There is no easy way to measure how much advertising is enough, at least not ex-ante, but neither the American approach nor the Ontario approach likely serves the industry as a whole.

In an ideal world, the industry itself would come up with advertising guidelines and self-police, though that has been an aspirational goal for at least four years and seems to have gained little traction.

Reasonable restrictions on advertising are likely agreeable to stakeholders. Even new regulators should be open to creating an environment that allows consumers to make informed decisions about what products are available.

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John Holden

John Holden J.D. / Ph.D. is an academic. His research focuses on policy issues surrounding sports corruption.

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