Massachusetts gambling advertising

Barstool Sports Cited for Possibly Violating Massachusetts Gambling Advertising Laws

Barstool Sports (“Barstool”) has ceased its “Can’t Lose Parlay” promotion after facing scrutiny for possibly violating Massachusetts gambling advertising laws. Barstool is a sports and pop culture digital media company that has become especially popular on social media. Barstool launched Barstool Sportsbook MA when online sports betting was legalized in the State on March 10, 2023. Soon thereafter, it became the target of the Massachusetts State Gaming Commission (“MGC”).

Pursuant to provisions of Massachusetts gambling advertising laws, sports betting operators are prohibited from engaging in any marketing “that would reasonably be expected to confuse or mislead patrons in order to induce” them to bet. Under these regulations, operators are also prohibited from promoting wagering as “free of risk in general or in connection with a particular promotion.” Barstool’s “Can’t Lose Parlay” promotion was created by Dan Katz. Since its inception, the parlay has been part of Dan’s regular marketing pitch. But its language at least implies that its bettors do not face any risk. Understandably, this promotional campaign has come to the attention of the Commonwealth for possibly violating its gambling advertising laws.

The “Can’t Lose Parlay”

The “Can’t Lose Parlay” was a parlay bet that was promoted on a regular basis by Dan Katz on Barstool’s Pardon My Take podcast. For the uninitiated, a parlay is a sports bet that is made up of more than one individual bet. All of the individual bets or “legs” must win in order for the bettor to receive the full payout. It should be noted that parlay bets are much more difficult to win than individual bets. Bettors that were interested in the “Can’t Lose Parlay” were able to find it in the promotions section of the Barstool Sportsbook. That was until recently, when the “Can’t Lose Parlay” was investigated as a possible violation of Massachusetts gambling advertising laws.

Investigation Under Massachusetts Gambling Advertising Law

Massachusetts Gambling Advertising Law Section 256.04(1) provides that:

No Sports Wagering Operator shall allow, conduct, or participate in any unfair or deceptive advertising, marketing, or branding for Sports Wagering.  Advertising, marketing, or branding that is unfair or deceptive includes, but is not limited to, advertising, marketing, or branding that would reasonably be expected to confuse and mislead patrons in order to induce them to engage in Sports Wagering.

Section 256.04(6) further states that:

No advertising, marketing, branding, and other promotional materials published, aired, displayed, disseminated, or distributed by or on behalf of any Sports Wagering Operator shall:

(c) Imply or promote Sports Wagering as free of risk in general or in connection with a particular promotion or Sports Wagering offer;

(d) Describe Sports Wagering as “free”, “cost free” or “free of risk” if the player needs to incur any loss or risk their own money to use or withdraw winnings from the Wager;

Promoting a sports bet as “can’t lose” may violate both of these subsections of Massachusetts’ gambling law. Alleged violations of Massachusetts gambling law are investigated by the Investigations and Enforcement Bureau (IEB). The IEB, the largest department at the MGC, is tasked with ensuring the integrity of Massachusetts gaming operations.

According to MGC Legal Counsel Todd Grossman, the MGC could have taken one of three courses of action in investigating the alleged Barstool violations:

  • Hold an adjudicatory hearing on the promotion;
  • Ask the IEB to investigate further and give their own recommendation on a course of action, which the MGC could approve or deny; or
  • Issue an intent to issue a civil administration penalty to PENN Entertainment (Barstool’s owner). PENN could then request a hearing on its behalf.

The MGC has decided to hold an adjudicatory hearing.

Why is the Investigation of Barstool Relevant to your Business?

Massachusetts became the latest state to release online sports betting to its general public. Less than a week later, one of its major operators came under scrutiny. The legalization of sports betting is spreading rapidly across the United States – with Florida, California, and Texas now considering whether to enter the fray. 

Understandably, each state’s gaming commission has a tremendous interest in policing its gambling operators. It is important that companies interested in marketing for sports books be acquainted with each state’s gambling advertising laws. The attorneys at Klein Moynihan Turco are experienced with advising companies on how to comply with state and federal gaming regulations.

If you require assistance with gambling advertising law compliance, please email us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Photo by JC Gellidon on Unsplash

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David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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