Why Massachusetts Could Be Industry Leader In Responsible Gambling
When Massachusetts launches online sports betting on March 10, it’ll enter a different industry than the one formed by PASPA’s repeal in 2018. Responsible gambling is a legislative and regulatory priority in a way it wasn’t when New Jersey and Delaware first legalized sports betting.
And, frankly, Massachusetts has already shown itself to be a state dedicated to supporting responsible gambling programs.
The state’s large investments in problem gambling infrastructure were built into the 2011 bill that legalized its casinos. Eleven years later in fiscal year 2022, the budget for Massachusetts’ Public Health Trust Fund — which largely funds responsible gambling programs in the state — was about $17 million.
If MA sports betting revenue estimates are accurate, Massachusetts could add about $5.4 million to that budget, a substantial portion of which could fund new research.
Track record of responsible gambling research in Massachusetts
Massachusetts has funded research like a six-year longitudinal study of problem gambling in the state. It included a lesser-known finding that not only found a spike in problem gambling related to the state’s three casino openings, but also that the spike occurred during media coverage of the casinos before they opened.
“(Sports betting) exploded so much in the past five years that we still don’t know as much other than consistently, across many countries, many jurisdictions, we are seeing dramatic increases in gambling problems as it relates to sports wagering as opposed to other forms of gambling,” Marlene Warner, CEO of the Massachusetts Council on Gaming and Health, said in an interview with Play MA.
In some ways, it’s natural for Massachusetts to join the sports betting industry at this time. The state’s track record in responsible gambling gives it a strong chance to rise to this moment when responsible gambling is not only in the spotlight but also focused on specific responsible gambling policies.
Early days of broad sports betting regulations
The New York Times’ coverage of the sports betting industry in November sent shockwaves through the industry and its regulators. Coverage included criticisms of risk-free bets, low responsible gambling funding and other emerging industry issues circumvented by statehouse lobbying.
However, the earliest sports betting regulations did not mention marketing free or risk-free bets.
Delaware’s sports lottery regulations make no mention of free bets. They only required advertising materials to be submitted to the Delaware Lottery. New Jersey’s sports betting bill and regulations did the same.
Both states already made commitments to responsible gambling investments. To this day, both states are leaders in responsible gambling per capita spending. According to a National Association of Administrators for Disordered Gambling Services (NAADGS) 2021 survey, Delaware was the third-highest per capita spender. Delaware has also become a major center of the country’s gambling helpline calls.
The same survey found that New Jersey was 19th. However, New Jersey added a Gambling Disorder Clinician Services Program in 2022. This added $600,000 for 10 new problem gambling providers. New Jersey is also home to the Center for Gambling Studies at Rutgers University.
So neither market has neglected problem gambling. Rather, specific issues have taken special significance since these early markets wrote their sports betting regulations.
Colorado incorrectly defines ‘free bets’
While the earliest sports betting regulations approached responsible gambling regulations broadly, newer regulations have begun to highlight specific responsible gambling issues.
Colorado voters approved a sports betting measure in 2019. Its retail and online markets went live in May 2020. Colorado was among the first states to define “free bets” in its sports betting regulations. Regulators defined a free bet as:
“ … a bet made by patrons using non-cashable vouchers, coupons, electronic credits or electronic promotions provided by Sports Betting Operations.”
Colorado also stipulated that free bets can “not be described as risk free if the customer needs to incur any loss or risk their own money to use or withdraw winnings from the risk free bet.”
These regulations make no mention of what happens before bettors place their bets. So, sportsbook brands could offer bonuses called risk-free bets even though they required bettors to risk their own money before receiving bonus credits.
This wouldn’t change until two North American markets addressed this discrepancy in different ways.
Ontario and Ohio sports betting crackdowns
Ontario launched sports betting in April 2022 with high anticipation from industry analysts. Given Ontario’s potential market size, the Canadian province was viewed as a possible competitive market to northeastern states that hadn’t legalized sports betting.
However, Ontario’s revenue was lower than expected. This was partly because regulators prohibited Ontario sportsbooks from advertising bonus offers. Section 2.05 of Alcohol and Gaming Commission of Ontario’s (AGCO) Standards for Internet Gaming states:
“Advertising and marketing materials that communicate gambling inducements, bonuses and credits are prohibited, except on an operator’s gaming site and through direct advertising and marketing, after receiving active player consent.”
Ontario’s policy was the strongest crackdown on sportsbook bonus advertising in North America. It prevented sportsbooks and affiliate sites from promoting sportsbook bonuses before, during or after Ontario’s sports betting launch.
The policy was partly a response to the advertising blitz that legal sports betting unleashed in American markets up to that point. In the summer of 2022, YouGov conducted a survey that found 45% of Americans strongly or somewhat agreed that there was too much sports betting advertising. This was fewer than customers in mature sports betting markets, such as Great Britain (71%), Australia (72%) and India (62%).
Dissatisfaction with sports betting advertisements tends to increase over time. So in some ways, Ontario’s crackdown was unsurprising. It was also more severe than American markets were willing to be. Even so, addressing sportsbook marketing with a lighter touch than Ontario left a lot of leeway to transform American sports betting advertising.
Ohio demands ‘free’ be used correctly
Before Ohio’s sports betting launch on Jan. 1, it published an FAQ about its sports betting regulations. One question asked whether sportsbooks advertisements could include terms such as “$100 free bet once you bet $100.”
Ohio regulators wrote in response, “No.” They went on to explain that operators can’t call a bet free if bettors must pay money to obtain it.
Shortly after sports betting went live, the Ohio Casino Control Commission fined DraftKings, BetMGM and Caesars Sportsbook $150,000 each in part for offering risk-free bets violating Ohio law. (DraftKings faced an additional $350,000 fine for direct marketing materials it mailed to underage Ohioans.)
The fine led Caesars to sever ties with the affiliate company that advertised the offending risk-free bets.
It also led to nationwide changes to bonus language.
When a sportsbook advertises a bonus in a national broadcast, that language must comply with every state’s advertising law. Since Ohio’s law was the strictest, and part of a brewing backlash on a highly visible part of sportsbook advertising, sportsbooks adjusted their language quickly. “Risk-free” and “free” bets became “bonus bets.”
Ohio wasn’t the sole cause of bonus language changes. FanDuel had begun phasing out “risk-free” language in its advertisements in the summer of 2022. But Ohio accelerated the process of language changes at other sportsbooks.
Massachusetts and responsible gambling
Massachusetts sports betting regulations address the current hot-button issue of risk-free bets.
Companies can’t advertise bets as free if bettors must pay to acquire them. But the draft regulations also go into detail about prohibitions against youth gambling. These include traditionally European standards, such as prohibiting sportsbook ads from featuring people who appear to be under age 21.
Underage actors aren’t a widespread issue in American sportsbook ads. But regulators are moving away from relying on convention. Future regulations will likely feature prohibitions that preempt issues rather than respond to critical coverage of them. It wouldn’t be surprising for states that launch sports betting after Massachusetts to draw from European regulations as Massachusetts has done.
But for the moment, Massachusetts is primed to enter a sports betting industry that’s newly focused on responsible gambling.