Sports Betting Boom Causes Debate Over Advertising Oversight

After the Supreme Court overturned a federal law that banned commercial sports betting in May 2018, states across the country have legalized sports betting. Today, over 30 states have legalized sports betting in some form, and that number is expected to continue to grow as many remaining states consider legalizing it.

This new booming industry in the states has become a massive economic generator. Last year, 27 states generated $1.5 billion collectively from sports betting. Top-performing states, including New York, Pennsylvania, and Illinois, each brought in more than $100 million in revenue from sports betting.

With more than half of Americans (57%) living in a state with legalized sports betting, according to the American Gaming Association (AGA), the organization estimated that the Super Bowl was expected to bring in $16 billion in bets alone this year – double the amount generated from last year’s event. This was the first time a Super Bowl game was played in a state with legal sports betting.

As states begin reporting record-high revenues from the Super Bowl, it’s clear that sports betting was a significant revenue generator in many states. In Pennsylvania, the Super Bowl generated $84.3 million in wagers, up 24% from the year prior, taking in $29.7 million in revenue.

Rising participation in sports betting is expected to continue as March Madness and the Masters’ Tournament approach. But the gold rush created by this booming industry is causing policymakers at both the state and federal levels to take a closer look at industry regulations.

Advertising by sports books has flooded televisions and computers, offering free bets and other incentives and featuring well-known celebrities and athletes. Critics argue that sports betting operates without the same type of restrictions on advertising unlike other industries that can cause addiction problems. Another argument is that there is no federal fund to support addiction treatment services and research for gambling.

Some states, like Ohio, have already begun regulating advertisements, while others, like Maine, are pushing marketing restrictions forward. This will likely cause other states to look at similar measures.

On the federal level, there is ongoing debate over whether there should be a national standard for sports betting advertising. Federal legislation was first introduced by U.S. Senator Chuck Schumer (D-NY) and then Senator Orrin Hatch (R-UT) in 2018 following the ruling. The bill would have created national standards on sports betting advertising, but the legislation never left committee.

As sports betting grows at record speeds, there is a renewed push this Congress to regulate advertising. This month, U.S. Congressman Paul Tonko (D-NY) introduced federal legislation, “The Betting on our Future Act,” which would ban all online and electronic sports betting advertising. The bill was modeled on the Federal Cigarette Labeling and Advertising Act.

While it remains to be seen if the bill garners even congressional support to move forward, it will surely spark the attention of sports book operators and could voluntarily impact their marketing language.