This SportTechie Legal article was written by Ryan Martin, an attorney in the Chicago office of Loeb & Loeb LLP.
Since the Supreme Court of the United States struck down the Professional And Amateur Sports Protection Act, eight new states have begun offering intra-state sports betting. And new bills proposing sports betting legalization are currently percolating through state legislatures around the country. But while many of the laws and regulations legalizing sports betting have certain baseline requirements, few have provided detailed guidance on how sports gambling companies can and should market their products.
In the absence of that guidance, the American Gaming Association—the industry association that represents casino operators and gaming suppliers—recently published a self-regulatory code: “Responsible Marketing Code for Sports Wagering.” The document aims to establish clear best practices in the industry, likely with the hopes of avoiding federal and state scrutiny into the marketing practices of sports gambling companies. As the companies aim to integrate with major sports leagues and media publishers, it will be vital that they maintain positive and trustworthy brand images in the eyes of consumers. Moreover, regulatory scrutiny could drain company resources, which are better spent developing and promoting their products, in addition to potentially derailing further states’ efforts to legalize sports betting.
The AGA now joins several other industries that have aimed to self-regulate advertising practices, including children’s snack food manufacturers and the alcohol industry. Indeed, the AGA appears to have leaned on the substance and style of the alcohol industry’s codes. Those familiar with the Distilled Spirits Council Code of Responsible Practices for Beverage Alcohol Advertising and Marketing, will be familiar with many of the AGA’s new guidelines.
Like the Distilled Spirits Council’s Code, the AGA Sports Wagering Code prohibits marketing “designed to appeal primarily to those below the legal age for sports wagering by depicting cartoon characters or by featuring entertainers or music that appeal primarily to audiences below the legal age.” A footnote specifies that ads should only be placed in media—whether broadcast, cable, radio, print, or digital—where “at least 71.6% of the audience is reasonably expected to be of legal gambling age (determined by using reliable, up-to-date audience composition data).”
The Sports Wagering Code also prohibits the licensing or use or of “sports wagering messages”—which include brand names, trademarks and logos—on clothing, toys, games, or game equipment “intended primarily” for people below the legal age. And AGA members must use “commercially reasonable efforts” to distribute branded promotional items only to consumers of above the legal sports gambling age.
For on-site marketing, the Sports Wagering Code offers a somewhat less restrictive measure, prohibiting the display of ads at events where “most” of the audience is reasonably expected to be below the legal gambling age. The Code also imposes a blanket restriction on advertising within college campuses, and states that sports wagering should not be advertised through college owned news assets—school newspapers, radio, and television.
Other requirements likely reinforce many companies’ current practices and existing laws, like age-gating and geo-fencing gambling websites, and adding a responsible gaming message along with the number for a toll-free help line. The AGA’s prohibition against promising financial or social success through sports gambling is fairly consistent with state unfair and deceptive trade practices laws and Section 5 of the Federal Trade Commission Act. The prevailing requirement dictated by these false advertising laws is that ads should not promote atypical results, and if they do, then average results should be clearly disclosed to the consumer. As sports betting legalization spreads and media publishers and networks embrace related content, we can likely expect more sports betting advertising. But advertisers may be wise not to include oversized prize checks or rags-to-riches testimonials.
The Sports Wagering Code both supplements and echoes the AGA’s Member Code of Conduct. Within the Member Code of Conduct, AGA members pledge to “advertise responsibly” with respect to casino gambling, and the code specifically mentions sports betting. In addition to strictly complying with state and federal false advertising standards, the Member Code also requires ads to “reflect generally accepted contemporary standards of good taste.” The Member Code of Conduct also specifically and expressly prohibits placing ads “with such intensity and frequency that they represent saturation of that medium or become excessive.”
But while AGA members sign an acknowledgment pledging their commitment to the Member Code of Conduct, the AGA does not appear—at least publicly—to have an enforcement body designed to keep members to those commitments. The Sports Wagering Code also expressly applies “to persons or entities operating in partnership with or as agents of AGA members in conducting advertising and marketing activity related to sports betting,” but does not explain how the AGA could enforce its guidelines on non-members. As with any self-regulatory code, its value is determined by the willingness of participants to voluntarily submit to its requirements.
The guidelines establish best practices that are designed to be above and beyond what is required by the law. As we’ve learned from other industries with similar self-regulatory regimes, these codes can reduce risk of government scrutiny and consumer complaints, but never completely remove it.