sports betting

Could Responsible Gambling Marketing Have Prevented Sports Betting Scandal?

Last week, criminal charges were filed against seven current or former Iowa and Iowa state athletes in connection with underage sports betting. In what is possibly the largest college sports betting scandal in recent history, Iowa authorities began investigating 111 athletes in May for the prohibited conduct. As sports betting continues to be legalized across the country, this investigation underscores the need for robust gambling marketing regulations that will safeguard the integrity of the game.

The Underage Gambling Investigation

On May 13, 2019, Governor Kim Reynolds signed off on legislation legalizing sports gambling and daily fantasy sports in Iowa. The newly-enacted law made it illegal for individuals under the age of 21 to bet on sports in the State of Iowa. In addition, NCAA rules do not allow athletes or athletic department employees to bet on a sport that receives NCAA sponsorship. 

In May, the Iowa Division of Criminal Investigation’s Special Enforcement Operations Bureau (‘DCI”) began investigating individuals associated with the University of Iowa and Iowa State University athletics teams for potential criminal sports wagering violations. What the DCI has uncovered so far has resulted in criminal complaints against seven athletes from the two universities, including the quarterback for Iowa State.

The Need for Responsible Gambling Marketing Rules

Twenty-four states and the District of Columbia have legalized online sports betting, with more to follow. Companies advertising for online sports betting operators must apply for licensure within each respective state jurisdiction. Although the process varies from state to state, most gaming authorities will review advertising campaigns to ensure that they comply with jurisdictional regulations. Almost every law contains provisions designed to reduce advertising targeted at underage and/or vulnerable members of the population.

In what almost seems like a prescient move, the American Gaming Association (“AGA”)  overhauled its Responsible Marketing Code for Sports Wagering (the “Code”) earlier this year to prohibit advertising to college-aged individuals. Recognizing the need to protect college-aged individuals from predatory gambling marketing, the Code was revised to:

  • Prohibit sports gambling marketing on college and university campuses and in their newspapers and radio and television broadcasts;
  • Prohibit partnerships with schools that contemplate promoting, marketing, or advertising gambling; and
  • Prohibit sportsbooks from entering into name, image and likeness (“NIL”) contracts with college athletes.

The Code is a set of standards by which members of the AGA self-regulate. Given the recent Iowa athletics scandal, however, we may begin to see more of these standards reflected in statutory regulations that carry the force of law.

How Should Your Company Approach Gambling Marketing?

Companies that conduct sports gambling marketing must stay abreast of changing regulations. Events, such as the Iowa sports betting scandal, usually lead to re-evaluations of existing statutory provisions and their ability to deter similar behavior in the future.

The attorneys at Klein Moynihan Turco are constantly monitoring evolving gambling marketing regulations so that clients remain compliant with applicable state and federal laws.

If you require assistance with gambling marketing 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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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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