Essentially, sportsbooks would not be permitted to advertise on mediums that fall under the control of the FCC, such as TV or radio.
The act is modeled after the Federal Cigarette Labeling and Advertising Act, that passed in 1965 and banned tobacco advertisements in the US. Should this act be passed, any violation would therefore be a violation of the Communications Act of 1934.
Whether or not the act goes beyond the House, its proposal reflects the rapid growth of sports betting across the US and the social change that has resulted.
Marketing spend
The New York representative highlighted the 2018 repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA) by the Supreme Court, as well as the increased marketing spend from US-facing operators during 2020 and early 2021 as representing a danger for the American people.
“Sports betting advertisements are out of control. Congress needs to reel in an industry with the power to inflict real, widespread harm on the American people,” said Paul Tonko.
The legislator point to DraftKings close to US$500 million sales and marketing spend during 2020, which was close to the height of the industry’s marketing blitz.
Most operators – with the notable exception of Flutter-owned FanDuel – have tapered down marketing spend in an increased focus of profitability. The operator spend over US$1.0bn on marketing during 2022.
Tonko also pointed to Pew Research polling which found that around 1 in 5 American adults bet money on sports in 2022.
He also argued that companies are using predatory tactics to entice new business. Large promotions and verbiage such as “risk free” or “no sweat bets,” he argues, pose a risk.
According to the National Problem Gambling Helpline Network, in 2021 the organisation fielded 270,000 calls, 45% more than it did in the previous year.
Criticised by industry
The bill has faced criticism from industry who oppose any federal or state restrictions on advertising.
“The American Gaming Association (AGA) and our members adamantly oppose any legislation that seeks to ban or limit casino gaming advertising, including for legal sports betting,” said Chris Cylke, senior VP of AGA.
“Responsibility is a foundation of the legal gaming industry and that includes with advertising. In fact, there’s never been more attention paid or resources invested in responsible gaming and problem gambling resources."
“This includes our proactive efforts establishing the Responsible Marketing Codes for Sports Wagering, which mandates responsible gaming message inclusion and imposes restrictions on target audiences, outlets and content.”
Cylke argues that should this act go into law; it would benefit illegal offshore operations and undermine state and tribal gaming regulators. Additionally, the vice president said that the proposed legislation violates federal free speech protections.
Source: iGB
