New Jersey Bills Limiting Gambling Ads Align with New AGA Code

New Jersey is proposing laws to limit gambling ads, while the American Gaming Association bans certain partnerships and terminology, with the changes receiving mixed reactions.

• The American Gaming Association Recently Announced an Updated Code Banning Sportsbooks from Partnering with Colleges, Paying College and Amateur Athletes for NIL, and Ending the Use of the Terms “Free” or “Risk-Free” Bets.
• New Jersey Legislatures Have Been Proactive in Their Attempts to Limit Problematic Sportsbook Advertising and Prevent Gambling Addiction.
• Sportsbooks Currently Have Promotional Parings with Five Colleges, Recently Faced Fines for Gambling Advertising Violations in Ohio.

In the wake of proposed bills to limit sportsbook gambling advertising in New Jersey, the American Gaming Association announced a new responsible marketing code that will ban sports books from partnering with colleges to promote sports wagering, bar payments to college and amateur athletes for using their name, image or likeness, and end the use of the terms “free” or “risk-free” to describe promotional bets.

Last week, Assembly Democrat Ralph Caputo (D-Essex) introduced two bills intended to limit what he perceives as problem gambling advertising in New Jersey. A5226 would prohibit sports betting advertising at public colleges and universities in New Jersey, while AR168 urges the Assembly to condemn the “overproliferation” of pro-gambling advertisements in New Jersey due to the addictiveness of gambling and urge sports betting companies and casinos “to exercise restraint and good judgment” in advertising.

Caputo also filed a related bill, A5308, which would require school districts to instruct high school students about the risks of compulsive gambling as part of their health curriculum, as well as A420, which would create a Gambling Treatment Diversion Court Pilot Program.

American Gaming Association Code

Tuesday, the American Gaming Association told The Associated Press on Tuesday the advertising changes are needed to keep up with developments in the fast-growing legal sports betting industry.

The AGA is the national trade association for the commercial gambling industry, but they also follow criticism of the gambling industry from regulators and those who treat gambling addiction. New legislation, such as Caputos, limiting gambling advertising isn’t unique to New Jersey. Multiple states are now outlawing the kind of betting partnerships covered by the code, and others are taking a renewed look at overall sports betting advertising.

“It has always been important that we get sports betting right,” said Bill Miller, the AGA’s president and CEO. “It’s always been our No. 1 interest in creating a high bar for responsible advertising and protecting consumers.”

Miller also acknowledged the updated code attempts to address things “that the industry has taken some jabs on.” But he said it was always the association’s goal to proactively update its marketing code; the association will review it annually from now on.

Keith Whyte, executive director of the National Council on Problem Gambling, praised the new rules.

“The AGA’s code is an important standard for the gambling industry, and we are glad to hear about these updates,” he said. “The code is so important because many sports fans are underage, and we also know that people who gamble on sports have higher rates of gambling problems.”

The new rules, to which all the association’s members have agreed, also require that anyone depicted in sports betting advertising be at least 21 years old. They also restrict advertising to media where at least 73.6 percent of the audience is reasonably expected to be 21 or older.

Although the new rules take effect immediately, companies that have existing advertising campaigns in place that would be affected will be allowed to continue the campaign until July 1.

Proposed Changes To New Jersey Gambling Advertising

Caputo believes that the casinos and betting companies “fight for revenue is just getting out of hand. And that’s what it is — it’s a vicious fight for market share. And the public is suffering for it. This advertising is way over the top.”

However, Assemblyman Don Guardian (R-Atlantic), who served as Atlantic City’s mayor from 2014 to 2018, voted against the resolution with the panel’s other two Republicans because “internet and sports gaming are in their infancy.”

“The only way that they expand is to advertise, and the more advertising they do, the better they do,” Guardian said. “So, I can’t be hypocritical if, as a state, we’re so excited about having internet and sports gaming and collecting 200-plus million dollars in taxes just on those two types of gaming, and then say no, the one way that you can’t promote it is to advertise.”

In addition to Caputo’s proposed bills, New Jersey Attorney General Matthew J. Platkin and the New Jersey Division of Gaming Enforcement (DGE) also recently announced a new Responsible Gaming Initiative to identify and help problem gamblers by using information collected by online gaming operators regarding patrons’ playing habits.

As part of this new initiative, which went into effect after the Super Bowl, the DGE will work with online wagering companies to use technology to identify and work to address at-risk patrons. Operators of gambling platforms are now required to analyze electronically maintained player data to determine whether a patron is showing signs of problem gambling behavior.

Partnerships Between Sportsbooks and Colleges

While no universities within the State of New Jersey currently have partnerships with sportsbooks, there are currently five partnerships between the gambling industry and colleges that promote or advertise sports betting, including one as close as Maryland.

These partnerships include a deal between Michigan State University and Caesars Entertainment and one between Caesars and Louisiana State University that led to the university sending emails to students — including some who were too young to legally bet — encouraging them to “place your first bet (and earn your first bonus).”

The University of Colorado Boulder’s 2020 deal with PointsBet sportsbook included a $30 referral bonus every time someone signed up on PointsBet with the university’s promo code and placed a bet. The university ended the referral bonuses in January, but the larger deal remains in place.

PointsBet has the previously mentioned deal with the University of Maryland, and Superbook has one with the University of Denver.

In February, the New York State Gaming Commission adopted rules in prohibiting advertisements being sent to people under age 21 and banning the use of language such as “free” or “risk-free” in promotions — something most of the major sports books have already done on their own. Massachusetts and Pennsylvania are among states that also ban its use.

U.S. Rep Paul Tonko, a New York Democrat, has introduced a bill that would prohibit online and digital sports betting advertising.

“In the years since the Supreme Court legalized sports betting, these unfettered advertisements have run rampant, with betting companies shelling out billions to ensure they reach every screen across America,” he said. “Congress must take the necessary steps to reel in an industry with the power to inflict real, widespread harm on the American people.”

And on Monday, U.S. Sen Ric hard Blumenthal, a Connecticut Democrat, wrote to 66 colleges and universities asking for information on their efforts to form partnerships with sports books, to prevent underage gambling among students, and treat gambling addiction.

Recent Sportsbook Advertising Violations

Two sportsbooks incurred significant fines in February for gambling advertising violations in the State of Ohio.

Chris Soriano, Chief Compliance Officer, and Harper Ko, Executive Vice President and Chief Legal Officer at Penn Entertainment, appeared before the Ohio Casino Control Commission and admitted that Barstool Sports engaged in advertising that appeared on the Barstool College Football Show, which violated Ohio regulations and laws against marketing sportsbooks to people under the age of 21.

Commission Vice Chair John Steinhauer noted at the February 15 hearing that the commission takes responsible gaming and advertising seriously, while also commending Barstool Sports for its history of operations in Ohio. The settlement agreement for a $250,000 fine and remedial measures was unanimously approved.

Similarly, Jacob List, Senior Director of Regulatory Operations, and Stephanie Sherman, Chief Marketing Officer, appeared on behalf of DraftKings Sportsbook to acknowledge and apologize for advertising violations that occurred during the rollout of DraftKings Ohio. They promised to employ mandatory employee training documents regarding responsible gaming disclaimers, as well as use of the word “free.” DraftKings also admitted to sending out direct mail advertisements to about 2,500 underage Ohio residents.

Commissioner Chair June Taylor noted that DraftKings has spent considerable funds on diversity in advertising, pointing specifically to advertising involving Kevin Hart. She stated that the commission is sensitive to the influence diversity has on different genders and age groups because of Hart’s appeal. The commission takes seriously what occurred but also appreciates DraftKings’ sincerity and transparency, Taylor said.

The commission unanimously approved a settlement agreement for $500,000 and remedial measures for DraftKings’ two violations.

With more states, as well as the American Gaming Association, placing further restraints on sportsbook advertising it remains to be seen if sportsbooks will learn from violations such as these.