Only some U.S. states currently permit online gambling on sports. But the potential market for such forms of betting is massive, leading to fierce competition for market share among a few leading companies, such as FanDuel, Caesars Entertainment, and Draft Kings. In their determination to become the largest, most dominant sports betting platforms, they are committing massive dollar amounts to advertising their sites, often during the very games on which people might bet.
This combination is raising some yellow cards, or bench warnings, or checkered flags—that is, it is raising concerns, across a range of sporting metaphors. In particular, gambling is a clearly addictive behavior that can have terrible consequences for people suffering the addiction and their families. By posting constant advertisements for readily available gaming sites, these operators might be contributing to harm consumers. Many of the marketing promotions are designed to be nearly irresistible, promising immediate credits on the sites just for signing up or “risk-free” wagers.
In addition, though the advertisements run on nationally broadcast games, including commercials during weekly NFL broadcasts and logos superimposed on the pitcher’s mound during the MLB World Series, not all consumers are able to take advantage of the offer. Currently, 17 states and the District of Columbia allow online gambling. For people living outside those areas, the advertising may seem like an unfair tease of entertainment.
Various actors have responded to such concerns. The American Gaming Association, in promising to self-regulate, created a “code of responsible marketing.” It prohibits advertising to children or on toys, and it requires that all marketing messages include clear information about where people can go to get help with a gambling addiction. The NFL also imposed limits of six gambling advertisements per game broadcast, and it initiated a problem gambling public awareness campaign.
However, the advertisements continue to grow in number and prevalence. As noted, the competitors in this industry are purposefully seeking the most market share, to the extent that for some of them, advertising spending accounts for two-thirds of the revenues they earn. By investing so heavily the companies are actively working to flood marketing channels with their marketing inducements, to attain a sufficient number of users that they can operate profitably and drive competitive sites out of the market.
The situation seems ripe for some form of regulatory intervention, and lawmakers seem willing to consider it. In Colorado, one proposal suggests that the limits on advertising for gambling sites should be similar to those imposed on marijuana dispensaries. But because the laws related to online gaming vary from state to state, national-level legislation seems untenable. Advertising regulations that differ across states might not be able to address some of the concerns though, such as unfair access. Thus the situation remains unresolved. Maybe we should bet on the outcomes.
- Should there be regulatory limits on advertising for gambling websites?
- What other solutions can you imagine to this ethical issue, related to addictive behaviors? Or does it not require solving, in your view?
Source: Katherine Sayre, “Gambling Ads Become the New Normal for American Sports,” The Wall Street Journal, October 24, 2021