New York Regulator Tightening Sports-Betting Ad Rules Amid Increased Scrutiny

The New York State Gaming Commission is proposing tougher rules for sportsbook advertising in the Empire State, which comes as mobile wagering is booming.

Feb 27, 2023 • 19:44 ET • 2 min read
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The regulator of sports betting sites in the Empire State is tightening up its advertising rules in the wake of some unflattering media reporting and moves by New York lawmakers to do the same. 

During a meeting on Monday, members of the New York State Gaming Commission approved proposed regulations for the advertising, marketing, and promoting of legal sports betting.

When the rules take effect is still to be determined, as they must first be published and then are subject to a 60-day comment period, a spokesperson for the commission told Covers. 

Nevertheless, the proposed regulations approved by the gaming commission are extensive and would impact sports betting in New York. They also come as lawmakers in the state have already introduced legislation aimed at tweaking rules around sports betting-related advertising, including a potential federal ban on all televised commercials

“After one year, it is obvious that the introduction of legal online sports wagering has been a net positive for people in New York,” NYSGC Chair Brian O'Dwyer said during Monday’s meeting. “However, the commission is also cognizant that, along with the success, comes the potential for problem gambling.”

Kicked out of school

Among other things, the new rules would prohibit "false, deceptive or misleading statements" in ads, ban the terms "free" or "free of risk" if a bettor is risking their own money, and include a requirement to "clearly and conspicuously" disclose all material terms and conditions of a promotion.

Explicit rules are being proposed that would bar sportsbook operators from marketing to underage residents. Another proposed prohibition would block any advertising of sports betting on college campuses, which was a particular concern of the gaming commission. 

The proposed rules also contain a ban on advertising contracts with third parties that compensate those parties based on the number of customers acquired or wagers placed. A similar provision has been proposed in Massachusetts (and the NYSGC may be cribbing it from its Bay State counterparts), but the Massachusetts Gaming Commission is already revisiting the rule. 

Online sports betting began in New York in January 2022, and the Empire State quickly became the biggest legal market in the U.S. New York’s nine online sportsbooks regularly handle more than $1 billion a month in wagers by residents and the state is closing in on $1 billion in lifetime tax revenue from mobile betting. 

Still, state lawmakers and industry members have already been eyeing possible changes for sports betting in New York. 

Sportsbook operators have complained about the state’s 51% tax rate for mobile sports betting revenue, warning it could ultimately cause them to offer worse odds and prompt smaller operators to exit the market. Lawmakers, meanwhile, have proposed advertising-related adjustments of their own in the wake of reporting by the New York Times and other media outlets on the wagering industry.

Therefore, the changes proposed by the New York State Gaming Commission could be the tip of the iceberg in the Empire State. Indeed, comments made Monday suggest even the regulator itself is allowing for the possibility of further tweaks if the need arises.

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