College Partnerships with Sportsbooks Banned by New Sports Marketing Code

Several indicators have pointed to possible regulatory action against partnerships to promote sports wagering between colleges and sportsbooks. However, only a few individuals could have predicted that it would happen so quickly.

In what appears to be a sharp stance against underage gambling, the US sports betting industry is introducing a code that will prohibit sportsbooks from entering into partnership deals with colleges or their sports teams.

This ban seeks to prevent payments to college and amateur athletes in exchange for promoting sports betting. The use of the terms “risk free” or “free” will also be prohibited from promotional bets.

The American Gaming Association is at the forefront of this regulatory change in the US sports betting industry. This comes as no surprise, considering that the American Gaming Association is the national trade association of commercial retail and online gambling companies in the US.

According to reports from The Associated Press, the marketing code became necessary in a bid to stay up to date with legal changes in the sports betting industry across the country. However, further reports suggest that the regulatory action was a response to growing criticism by regulators and advocates against gambling addiction.

In a new article published by Gamble Online Michigan, we reported that sportsbooks had entered into several deals with US colleges. One of such partnerships involved Michigan State University, Louisiana State University and Caesars Sportsbook MI in January 2022. This deal was worth $8 million and targeted campus audiences with unfiltered sports betting ads.

Many of these college-sportsbooks agreements were not transparent despite calls from regulators to be transparent. In addition, the existing American Gaming Association Responsible Marketing Code prevents advertisements in locations where underage bettors may be present.

Since the US Supreme Court legalized sports betting, 33 states plus Washington D.C. have similarly legalized it in their local legislatures. The American Gaming Association has assured that the code will apply to all 33 states without exceptions.

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

Furthermore, President Miller remarked that the new code puts into consideration several topic issues that the sports betting industry “has taken some jabs on.” However, as the foremost association guiding gambling in the nation, he unequivocally stated that the AGA will annually review its marketing code subsequently and proactively make changes to cater to emerging circumstances.

The executive director of the National Council on Problem Gambling, Keith Whyte, has also commended the new code for setting a good standard for the industry.

"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."

These new rules will take effect immediately. However, companies involved in existing promotional agreements with universities will have until July 1 to discontinue them.

Besides prohibiting general partnership deals between colleges and sportsbooks, the code requires anyone that would be depicted in a sportsbook advertisement to be at least 21 years old. The rule also restricts advertising to media where at least 73.6% of the audience is deemed to be 21 and above.

States are also taking extra steps to introduce legislation that would ban the advertisement of online sports betting. Paul Tonko, a congressman in New York has introduced a bill to that effect. This comes after the New York State Gaming Commission introduced rules that would ban advertisements sent to individuals under the age of 21 while also eliminating words like “risk-free” or “free” from adverts.

Pennsylvania, Massachusetts and Ohio are states where such terms are banned in advertising. Ohio authorities prescribed fines for three sportsbooks in breach of this rule. DraftKings Sportsbook was also fined in Ohio for sending targeted email ads to underage persons.

In similar fashion, New Jersey introduced a bill to restrict sportsbooks from partnering with public colleges or universities months ago. On Monday, March 27, a US Senator, Richard Blumenthal, wrote a letter to 66 universities and colleges in the country requiring details about their partnerships with sportsbooks, with a view to preventing gambling addiction and underage betting.