The NBA is prohibiting its gambling partners from using “risk-free” language to describe bonuses on the league’s advertising platforms next season, according to Sports Business Journal.
“We believe it’s a problematic term from a responsible gaming and a problem gaming standpoint,” Scott Kaufman-Ross, the NBA senior vice president, tells SBJ. “… The notion that anything in this area is risk-free runs counter to the key messaging and education around sports betting.”
The league’s hope is that as of next season, the terminology will no longer appear in advertising associated with the NBA.
This is the latest in the backlash against sportsbook operators using “risk-free” in their marketing. Ohio regulators began the crackdown with fines against DraftKings, BetMGM, and Caesars. Caesars severed ties with an affiliate company that marketed “free” promotional bets on the Caesars’ behalf.
These bets are in fact not free, as they require a certain degree of risk from sportsbooks’ customers.
Sportsbook brands, including DraftKings and FanDuel, have also been pruning risk-free language from their bonus ads before the NBA made this decision. The industry had already been in the middle of this correction.
But the bigger issue is that this backlash began with a single state’s — Ohio’s — willingness to crack down on misleading marketing language.
Marketing Langauge and Consumer Protection
Proper marketing language ensures that bettors receive the bonuses they believe they’re getting. Consumers won’t pour more money than they can afford into sportsbooks only to discover that their bonus credits can’t be withdrawn later and usually expire after seven days.
Misleading marketing language can also drive traffic to offshore sportsbooks. The spectre of offshore sportsbooks is open to abuse. However, risk-free bet ads can drive bettors who are below the legal gambling age to offshore alternatives. Licensed sportsbooks like DraftKings and FanDuel have robust age verification measures in place. Offshore books aren’t picky about how old their customers are.
Finally, misleading bonus language could be disproportionately harmful to problem gamblers. Ohio issued a $350,000 fine to DraftKings for sending about 2,500 direct marketing ads to Ohioans under 21.
The holes in the self-exclusion list could also send direct marketing materials to problem gamblers who self-excluded, then became reactivated by tempting welcome bonuses. At that point, the stakes rise to reducing the risks of bankruptcies and suicides.
What’s the Next Target After Industry Marketing?
Sportsbook marketing is getting mainstream attention. Sportsbooks are changing their bonus language, the most visible component of their marketing mixes. From there, regulators could shift attention to improving self-exclusion protections. But after marketing, youth gambling could be the next major area of attention.
The combination of underage gamblers, offshore gambling sites, and parents’ credit cards is a brewing crisis. Whether those children and young people have to wait for another dozen states to expand gambling to notice is a bleaker question.