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The trend of newer sports-betting regulators taking a tougher stance on advertising is continuing in Massachusetts, where newly-proposed rules include limits on “risk-free” terminology and marketing to college students.
Potential rules discussed Thursday (January 12) by the Massachusetts Gaming Commission would cover a prohibition on the terms “free,” “risk-free,” or “free of risk” if a player must incur any loss or use their own money to take advantage of the promotion.
After several years of the phrase being ubiquitous in U.S. sports-betting advertising across many companies, operators have begun trending away from it in recent months, as several state regulators, including New York and Ohio, have adopted rules effectively prohibiting the slogans.
“We certainly have used [free bets] in marketing, we’re consistently evaluating the language we use and will always be fully compliant with any regulations set forth,” said Stephanie Sherman, chief marketing officer for DraftKings, when asked about the phrase by commissioners Wednesday.
“It varies based on jurisdiction, and we comply with all the terms required,” she added. “For example, if something is required to be a free bet, the promotion is a truly free bet without any other actions needed for the consumer.”
DraftKings and FanDuel both have adopted the phrase “no sweat” bets in some or all jurisdictions, while others have adopted terms such as “bonus bet” or “second chance” to describe offers that promise to return the amount of the player’s first wager, up to a certain amount, in betting credit if the bet is a loss.
Commissioners have also expressed concern through the many hearings over the last month regarding marketing to underage children, including on college campuses and at major sporting events.
Proposed rules would prohibit marketing on any college or university campuses, as well as stating that advertisements may not be placed at sporting events “with such intensity and frequency that they represent saturation of that medium or become excessive,” although commissioners and staff acknowledged that the lack of specificity may require the the latter caveat to be reconsidered.
“The question becomes, how do you enforce something that you don’t have a definition on,” asked commissioner Bradford Hill. “What may be intensity for me may not be intensity for someone else.”
“I would imagine the difficulty is, I may find there to be too many Geico [insurance] ads, but Geico may disagree, or somebody else may disagree,” added Mina Makarious, a partner with the Massachusetts-based Anderson & Krieger firm that advises the commission.
Another issue with the rule is that with multiple operators in the market, one operator alone may not be responsible for saturation, but the market in totality could be saturated by the volume of advertising, said Mark Vander Linden, director of research and responsible gaming for the commission.
The commission also had a lengthy debate on setting a threshold for what percentage of the event must be of legal gambling age to permit sports-betting advertising at the event, considering figures as high as 85 percent before tentatively settling on 75 percent amid several concerns that setting an even higher bar could prohibit advertising at any professional sports venue in the state.
The commission did not vote on the proposed rules Thursday as several revisions will be needed prior to approval and publication based on Thursday’s discussion.
However, the tenor of the conversation is different than what some had expected, or feared, based on conversations that had happened previously, including legislative considerations that included a potential whistle-to-whistle ban on televised sports-betting advertising during games.
Regulators discussed several other issues during Thursday’s meeting, including a discussion on the potential event wagering catalog, as well as making a determination that the commission does in fact have the authority to allow operators to deduct promotional play from taxable revenue, which was a source of consistent disagreement.
Some commissioners argued that the legislature had discussed promotional play deductions during the legislative process and intentionally omitted the ability to deduct from the final version, while what ultimately became a 3-2 majority argued that the lack of any mention of promotional play deductibility gave the commission the ability to make its own decision.
However, the commission deferred a decision on whether it actually will allow operators to deduct promotional play to a future meeting.
