New U.S. Sports-Betting Regulators To Monitor Ad Boom

As some legislators and regulators in established U.S. sports-betting states have begun to express concern over advertising saturation, regulators in new markets say it is something they will monitor.

Regulators from Arizona, Louisiana and Maryland spoke about advertising and a host of other topics on VIXIO GamblingCompliance’s “Meet the Regulators” webinar earlier this month.

Arizona has become perhaps the hottest new sports-betting market in the U.S. following its September 9 launch, with multiple operators touting it as an explosive success during recent investor calls.

“I definitely have seen a lot of advertising,” Ted Vogt, director of the Arizona Department of Gaming, told webinar attendees. “We have received some complaints from folks complaining about the sheer volume of it.”

“We haven’t gotten to the point where we’re starting to hear legislators say, ‘you need to something about this’, or anything like that, but the legislature will be back in town in January and we’ll see what they’re hearing about that.”

Vogt said it was natural that online sportsbook operators are advertising prominently as they invest a lot of money in initial customer acquisition. 

“So it’s something we’re going to monitor going forward, but sort of the metes and bounds of the legislation as well as our rules, we talk about content, we don’t necessarily talk about frequency and things like that.”

In Louisiana, only land-based sports betting has launched, but even though mobile will not be available until 2022, the advertising push has already begun as the likes of Caesars offer incentives for customers to pre-register for accounts.

“No problems yet, but it is interesting to see how much advertising has gone into the mobile aspect already and we’re still months away from it,” Ronnie Johns, chairman of the Louisiana Gaming Control Board, told VIXIO GamblingCompliance webinar attendees.

“It’s something we’re going to monitor very closely as things start to really move in the coming months and coming year with sports betting as it settles in to see what type of advertising they’re going to do.”

If advertising were to become a concern, Johns said the state would have the option of addressing it via rulemaking or by legislative action.

“Our legislature meets once a year so if it becomes a problem, having served 22 years in the legislature, I can tell you that if there’s a problem, the legislature’s going to take a swipe at it,” Johns said.

Vogt said one of Arizona’s key concerns from a regulatory perspective was making sure advertising and marketing materials are not misleading to customers regarding the various promotions that are available.

“We definitely were concerned, and still are, about promotions and bonuses that they not be misleading or contain false information,” Vogt said. “We don’t want anyone getting the misconception about what these bonuses are or are not, and coming back to us later, so it was something that we built into our rules.”

Maryland Lottery and Gaming Control Agency director John Martin noted that regulators have proposed to cap and then phase out the ability of operators to deduct promotions from taxable net revenue.

“I think it’s the size of the risk-free offers and promotion in general that would be potentially concerning,” Martin said.

In addition to advertising, the regulators from the three newcomers to the U.S. sports betting market also provided an update on the status of implementation in their jurisdictions, which are attracting major interest from dozens of prospective operators and suppliers.

Legal sports betting was launched in Maryland at a trio of land-based casinos on December 9 and 10, but Martin told webinar attendees that the first of up to 60 standalone licenses for mobile sports wagering might not be issued for several more months.

The split responsibilities between Maryland’s lottery and gaming commission and independent Sports Wagering Application Review Commission is one complexity set to delay the licensing process, alongside the sweeping nature of the state’s legislation.

State law is also unique in showing a clear preference for minority and women-owned businesses to have genuine stakes in Maryland’s sports-betting industry, which will be a key criteria in the review of any applications for retail and mobile licenses.

He cautioned that some local entities or online operators seeking to enter the market may not be used to the intensive background scrutiny that comes with obtaining a state gaming license.

At the same time, there are some stakeholders advocating for a uniform launch date for all licensees for mobile sports wagering, meaning those operators more accustomed to a gaming licensing process may have to wait.

“That will add more time to the process if we choose to go that route,” Martin said.

Arizona’s Vogt credited the comparatively speedy launch of his state’s market to the flexibility afforded to regulators in the legislation and an ability to adopt rules on an expedited basis, combined with a robust dialogue with prospective operators throughout the summer.

“It was aggressive but we were very well organized,” Vogt said.

In Louisiana, sports wagering license applications are expected from each of the state’s incumbent casinos and racetracks before the end of the year, Johns told webinar attendees.

Leave a Reply

Your email address will not be published. Required fields are marked *