Advertising bans. We’ve seen them done to cigarettes, subliminal messaging, email spam and even gambling.
The writing could be on the wall for sports betting to follow this same fate. And it could happen before there is legal California sports betting.
Last month, Rep. Paul Tonko (D-NY) introduced legislation to make it illegal for sportsbooks to advertise on any FTC-regulated electronic communication medium, such as the internet, TV and radio.
The measure has a long climb to make it out of the US Congress. How would it play out in California if it did make it out and became law?
Impact of ban would be less on tribal casinos if sports betting was legal in CA
As Tonko’s “Betting On Our Future Act” works its way through the US Capitol, California sports betting has its own hurdles to overcome. Split efforts between tribes and major sportsbooks resulted in two failed measures last November. Sports betting remains an unregulated industry in The Golden State.
It’s still too early to know how things will shape up for the 2024 election.
If sports betting did become legal, the impact of an advertising ban would depend on two factors. First, how is the law drawn up? And second, who is operating the sportsbooks? Out-of-state companies like DraftKings and FanDuel would feel the sting of an advertising ban more than the tribes if they ran their own operations.
National sportsbooks have been able to advertise electronically in the US since the Supreme Court overturned PASPA in May 2018. Unlike tribal casinos, they do not have other non-gambling-related elements to incorporate into their advertising. Tribal casinos have established themselves as entertainment hubs. They offer entertainment, food, spa and other resort amenities that they can add into the equation.
Will California legalize sports betting in 2024?
After strongly opposing Proposition 27 last November, which would have allowed major sportsbooks to operate in California, tribes remain focused on keeping out-of-state sportsbooks from doing business in the state. That’s unless all parties could find a mutually-beneficial agreement.
Tribes spent $220 million to defeat Prop 27, but Proposition 26, which would have put tribes in sole charge of sports betting, also lost soundly.
Some tribal members believe last year’s election results will keep major sportsbooks away from California next year. That could provide tribes with an opportunity. Later this month, tribes will meet in Sacramento to discuss sports betting and other issues, such as online gaming.
Scott Crowell, a tribal attorney who represented the Rincon tribe during the “No on 27” campaign, said there could be a path toward agreement between tribes and national sportsbooks.
“They have to understand that if they want a role going forward, they need to approach the tribes from the idea of how do we offer our experience and back-of-the-house skills to the tribes for tribally operated online sports betting.”
Advertising outlets would be the biggest losers
If sportsbooks were banned from advertising on the internet, TV and radio, media outlets would suffer the most. Major sportsbooks spend hundreds of millions of dollars annually advertising on the airwaves. Even local media outlets would feel the pinch.
If they’re cut off, the sportsbooks would still find ways to serve a demanding market. Operators would utilize mailers, print advertising and billboards to get their message out there.
Local TV channels and regional sports radio stations, which already struggle for advertising dollars, would not be helped in any way by the proposed legislation.
Will the bill pass, and when?
Tonko’s bill must pass through multiple committee hearings and votes in the House and Senate before going to the president’s desk. The measure could divide Congress. Some members will point to the tax revenue sports betting creates, while others will highlight the need to protect children and combat problem gambling.
Historically, at least 85% of bills do not make it out of their first committee hearing. Nearly all those that make it to the floor get passed, though.
Sportsbooks’ best hope is that legislators decide to leave the issue up to individual states, just like sports betting is regulated.
