Why Massachusetts Could Be Industry Leader In Responsible Gambling

Massachusetts will enter a distinct industry from the one that was created when PASPA was repealed in 2018, as online sports betting is launched on March 10. Unlike when New Jersey and Delaware initially legalized sports betting, there is now a greater emphasis on responsible gambling as a legislative and regulatory priority.

Moreover, Massachusetts has demonstrated its commitment to promoting responsible gambling initiatives.

In 2011, when the state legalized its casinos, significant funds were allocated towards problem gambling infrastructure. Fast forward eleven years to fiscal year 2022, and the Massachusetts’ Public Health Trust Fund, responsible for financing various responsible gambling initiatives within the state, had a budget of approximately $17 million.

If the revenue estimates for sports betting in MA hold true, Massachusetts has the potential to contribute approximately $5.4 million to its budget. This amount could greatly support the funding of new research initiatives.

Track record of responsible gambling research in Massachusetts

A six-year longitudinal study on problem gambling in Massachusetts has been financially supported by the state. The study revealed an interesting discovery that not only identified an increase in problem gambling associated with the opening of three casinos in the state, but also observed this spike during the media coverage leading up to the casino openings.

In an interview with Play MA, Marlene Warner, CEO of the Massachusetts Council on Gaming and Health, stated that sports betting has experienced a significant surge in the last five years. However, our understanding of this phenomenon is still limited. Across various countries and jurisdictions, there is a consistent rise in gambling issues specifically related to sports wagering, surpassing other forms of gambling.

Massachusetts has a natural inclination to enter the sports betting industry at this juncture due to its commendable history of responsible gambling. The state’s remarkable track record positions it favorably to seize this opportunity, as responsible gambling garners considerable attention and necessitates dedicated policies.

Early days of broad sports betting regulations   

In November, the sports betting industry and its regulators were shaken by the coverage of The New York Times. The coverage raised concerns about risk-free bets, insufficient funding for responsible gambling, and other emerging industry issues that were being overlooked due to statehouse lobbying.

Nevertheless, the initial regulations for sports betting failed to address the issue of promoting complimentary or risk-free bets.

There is no mention of free bets in Delaware’s sports lottery regulations. The only requirement is to submit advertising materials to the Delaware Lottery. Similarly, New Jersey’s sports betting bill and regulations follow the same protocol.

Both states have already pledged to invest in responsible gambling initiatives, and they continue to be at the forefront of per capita spending on such programs. In a recent survey conducted by the National Association of Administrators for Disordered Gambling Services (NAADGS) in 2021, Delaware ranked third in terms of per capita spending. Additionally, Delaware has emerged as a significant hub for gambling helpline calls in the United States.

According to the survey, New Jersey ranked 19th. Nevertheless, in 2022, New Jersey implemented a Gambling Disorder Clinician Services Program, allocating $600,000 to support 10 additional problem gambling providers. It is worth mentioning that Rutgers University hosts the Center for Gambling Studies in New Jersey.

Both markets have adequately addressed the issue of problem gambling. However, certain concerns have gained particular importance as these early markets established their regulations for sports betting.

In anticipation of the launch in Massachusetts, BetMGM is taking steps to promote responsible gambling through their advertisements. Learn more about their efforts.

Colorado incorrectly defines ‘free bets’ 

Initially, sports betting regulations took a broad approach towards responsible gambling measures. However, more recent regulations have shifted their focus towards addressing specific issues related to responsible gambling.

In 2019, the sports betting measure in Colorado gained approval from the voters. The retail and online markets were launched in May 2020. Colorado took the lead among states by providing a clear definition of “free bets” in its sports betting regulations. Regulators specified that a free bet is:

“… a wager placed by customers utilizing non-redeemable vouchers, coupons, electronic credits, or electronic promotions issued by Sports Betting Operations.”

In addition, Colorado clarified that free bets cannot be labeled as risk-free if customers are required to bear any loss or put their own funds at risk in order to utilize or withdraw winnings from the risk-free bet.

There is no mention in these regulations about the steps taken prior to placing bets. As a result, sportsbook brands can offer risk-free bets as bonuses, even though they require bettors to put their own money at stake before receiving bonus credits.

The discrepancy was not addressed until two North American markets implemented different strategies.

Ontario and Ohio sports betting crackdowns      

In April 2022, the launch of sports betting in Ontario generated significant excitement among industry analysts. Due to the province’s considerable market potential, it was seen as a potential rival to northeastern states that had not yet legalized sports betting.

Ontario’s revenue fell short of expectations due in part to the prohibition of bonus offer advertising by regulators. According to Section 2.05 of the Alcohol and Gaming Commission of Ontario’s (AGCO) Standards for Internet Gaming, Ontario sportsbooks are not allowed to promote bonus offers.

“Except on an operator’s gaming site and through direct advertising and marketing with active player consent, the use of advertising and marketing materials that promote gambling inducements, bonuses, and credits is strictly prohibited.”

The implementation of Ontario’s policy marked the most stringent approach towards curbing sportsbook bonus advertising in North America. It effectively prohibited sportsbooks and affiliate websites from promoting sportsbook bonuses prior to, during, or following Ontario’s sports betting introduction.

The policy was implemented as a reaction to the extensive advertising campaign that accompanied the legalization of sports betting in American markets. In the summer of 2022, YouGov conducted a survey revealing that 45% of Americans either strongly or somewhat agreed with the notion that there was an excessive amount of sports betting advertising. This percentage was lower compared to countries with well-established sports betting markets like Great Britain (71%), Australia (72%), and India (62%).

Over time, people’s dissatisfaction with sports betting advertisements tends to grow. Therefore, it was not surprising that Ontario took strict measures to address this issue, surpassing the willingness of American markets. However, by adopting a less aggressive approach compared to Ontario, there is still ample room to reshape and improve sports betting advertising in America.

Ohio demands ‘free’ be used correctly 

Ohio’s sports betting regulations were accompanied by the publication of an FAQ prior to its launch on Jan. 1. Among the inquiries made, one question sought clarification on whether sportsbook advertisements were permitted to incorporate phrases like “Bet $100 and receive a $100 free bet.”

The regulators from Ohio responded with a clear “No,” stating that operators cannot classify a bet as free if bettors are required to pay money to access it.

DraftKings, BetMGM, and Caesars Sportsbook were fined $150,000 each by the Ohio Casino Control Commission soon after sports betting became active. This was due to their violation of Ohio law by offering risk-free bets. Additionally, DraftKings faced an extra fine of $350,000 for sending direct marketing materials to underage Ohio residents.

Caesars decided to sever its ties with the affiliate company that advertised the risk-free bets due to the imposed fine.

Additionally, it prompted modifications to bonus language across the entire country.

Sportsbooks swiftly adjusted their advertising language to comply with the advertising laws of every state after Ohio’s stringent regulations sparked a backlash against sportsbook advertising. Consequently, the terms “risk-free” and “free” bets were replaced with “bonus bets.”

While Ohio did not bear the sole responsibility for the alterations in bonus language, FanDuel had already commenced the gradual removal of “risk-free” terminology from its advertisements during the summer of 2022. Nevertheless, Ohio expedited the implementation of language modifications across other sportsbooks.

Massachusetts and responsible gambling  

The existing concern of risk-free bets is being addressed by the sports betting regulations in Massachusetts.

Betting companies cannot promote bets as free if bettors have to pay to obtain them. However, the new regulations also provide specific guidelines to prevent youth gambling. These guidelines align with European standards, such as prohibiting sportsbook advertisements that depict individuals who seem to be under the age of 21.

American sportsbook ads do not commonly involve underage actors. However, regulators are shifting towards a new approach by implementing proactive prohibitions in future regulations, rather than simply reacting to negative publicity. It is expected that states introducing sports betting after Massachusetts may adopt similar regulations inspired by those in Europe.

However, currently Massachusetts is in a position to join a sports betting industry that is now placing a stronger emphasis on responsible gambling.