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The Massachusetts Gaming Commission may look to follow Ohio in pursuing regulations that restrict gaming promotions associated with non-gaming transactions.
Commissioners expressed an interest Thursday (July 11) in proceeding with similar regulations after seeking feedback from operators and guidance from staff on what potential regulations could look like.
The rule promulgated by the Ohio Casino Control Commission prohibits operators from offering a promotion in connection with a non-gaming consumer transaction unless the promotion does not target individuals under the age of 21 or is offered only to those who are verified to be over 21 and not participating in the state’s self-exclusion program.
Operators were critical of the rule in Ohio and received some clarity from the commission as to how it would interpret certain types of promotions rather than significantly alter the language of the text of the proposed regulations.
However, at least three prominent sportsbook operators expressed their opposition to Massachusetts following suit in feedback to the commission.
Among the critics was Fanatics, which offered a promotion tied to purchase from the company’s retail arm in May 2023 that kickstarted the conversation in the state about promotions tied to non-gaming transactions.
“Philosophically, [Fanatics Betting and Gaming] disagrees with the notion that promoting sports wagering to customers of the wider Fanatics business introduces incremental risks to the Commonwealth that are not at least equally present through other means of marketing to non-gaming patrons, like paid social media ads or television commercials,” the company wrote in a letter to MGC deputy general counsel Carrie Torrisi.
The company claimed that a statistical analysis of its retail customer base found that “the overwhelming majority” of purchasers on the site are 21 years old or older, and that they have a high propensity to be interested in sports wagering, making the Fanatics customer pool “a safe and logical place for FBG to invest marketing resources.”
Shifting resources to more traditional advertising, the company argued, may ultimately expose more underage individuals to gaming advertising and would ultimately harm their business model.
One of the central issues operators have posed with such a regulation is the challenge of verifying that every consumer exposed to the marketing is over the age of 21.
“There is some protections in our current regs, but one of the key distinctions for me is an affirmative obligation to confirm 21-plus is very different than ‘we believe they're 21-plus,’ and I think we should be more protective of under-21s,” said commissioner Eileen O’Brien during Thursday’s discussion. “I think that burden of determining and confirming over 21 is not an unreasonable request.”
Operators have said that making that language too ambiguous, however, could serve to prevent advertisements well beyond what the commission is looking to address.
“The collection of such personally identifiable information is essentially unheard of in any type of consumer transaction, and as such a third-party business would likely be unable to accurately 'verify' the age or voluntary self-exclusion status of an individual in a non-gaming transaction,” DraftKings wrote in its letter to the commission.
“Depending on the commission’s interpretation, a verification standard could serve to effectively prohibit any form of generalized promotional marketing to non-gaming consumers.”
“We believe that the commission’s current marketing and advertising regulations sufficiently protect the interests of the Commonwealth while affording sports wagering operators with meaningful avenues to grow the legal sports wagering market,” added Cory Fox, vice president for product and new market compliance for FanDuel.
“Should the commission wish to proceed with the proposed amendments, we suggest that the text be narrowly tailored to address the specific concerns the commission might have.”
The commission directed staff to return at a future meeting with some proposed regulations to address gaming promotions offered after non-gaming transactions, although it stopped short of beginning a rulemaking promulgation process, leaving the topic more open for further consideration.
