Three Common Problems in Sports Betting Bills and Regulations

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Since the Supreme Court struck PASPA down, over 30 states have legalized sports betting. Several other states, including Massachusetts, Ohio, and Maryland are expected to launch sports betting in 2023. Because states write their own sports betting laws, regulations governing the sports betting industry vary between states. Some of this variation reflects local attitudes about issues like betting on college sports. But three common problems in sports betting bills continue to plague this new industry:  

  • Geolocation Limits 
  • Advertising Restrictions 
  • Problem Gambling Program Funding 

Some of these issues plague every sports betting market while some states resolve these issues well. However, continued negligence on these issues could attract federal attention. That attention could take the form of a State Attorney General’s attention or a push to standardize sports betting regulations across the United States. 

Geolocation Limits 

Every state sports betting bill has geolocation rules. The clauses in these bills require sportsbooks only to accept wagers from bettors in-state. This allows each state to respect the decision of surrounding states not to legalize sports betting. Partnered with strict know-your-customer requirements, sportsbook bills also ensure that sportsbooks identify bettors to avoid funneling money to money launderers. 

However, geolocation limits can be circumvented by bettors who use VPNs to mask their locations. VPNs can send a bettor’s signal to another state or country, making it appear as if that bettor is located in a legal state. 

Sportsbooks can catch this trick. Some sportsbooks get alerts when bettors log in with VPNs. Others can detect when two IP addresses don’t match and block the account. 

Enforcement of geolocation restrictions from VPNs varies. Some bettors report success in circumventing geolocation restrictions. Others can’t break through the geo-blocks. That variation in customer experiences is a weak point in existing sports betting laws and regulations. Even though it’s not unique to the United States, it’s one of the most stubborn problems in sports betting bills, laws, and regulations.   

Advertising Restrictions 

Virtually every state sports betting bill has a clause prohibiting “deceptive” advertising. However, most states also allow sportsbooks to advertise “risk-free” bets, which require bettors to risk their own money before winning any credits. Those credits can’t be used for anything except sports betting. So, its name is deceptive. 

Ohio’s proposed sports betting master rules prohibit “risk-free” language unless a bonus doesn’t require bettors to risk their money. Ohio goes another step further and prohibits advertisements that promote “excessive participation” in sports betting. This targets ads that imply that bettors should bet late at night or during work. 

In the United States, Ohio’s sports betting bill passes as robust. However, it pales compared to European markets, where sportsbooks require bettors to offer proof of income if their bets increase in size or frequency. UK sportsbook ads aren’t allowed to feature popular celebrities. 

It’s hard to imagine American sports betting brands accepting these limitations. However, that’s because American sports betting bills don’t enforce these high advertising standards. American regulators are only now discovering how to craft language that cracks down on ads that promote gambling myths. It’s a weakness begging to be corrected by a State Attorney General lawsuit.        

Problem Gambling Program Funding 

Problem gambling funding varies widely from state to state. This isn’t just a question of state market size. Some states, like Colorado, set flat fees for problem gambling revenue. Arizona takes a set percentage of gambling winnings from its tribal casinos. 

The outcomes couldn’t have been more different. Colorado’s set tax allocation for problem gambling programs is $130,000. Arizona raises about $2 million per year for problem gambling programs. 

It’s not just about setting an amount to spend on problem gambling each year. New York allocated $12 million to fight problem gambling in its latest budget bill, a vast improvement over Colorado’s amount. It’s about prioritizing problem gambling funding regardless of how the amount is calculated. 

Providing funding for problem gambling programs isn’t enough. States like Illinois must spend it effectively to ensure that even rural areas have access to Gamblers Anonymous groups. As sports betting markets mature, the markets that have gotten this issue wrong will be increasingly at risk of attracting negative regulatory attention.      

Resolving Common Problems in Sports Betting Bills 

Individually, state legislatures and regulators can legalize sports betting without abandoning problem gamblers and gambling addicts. However, many states have shirked this responsibility. 

American sports betting markets continue to face challenges with clamping down on geolocation workarounds. Advertising restrictions remain lax and allow unethical marketing messages through. Finally, problem gambling funding varies wildly from inadequate to questionably spent, regardless of market size and funding method. 

If states don’t regulate themselves effectively, a State Attorney General will turn their attention to offending states. Industry insiders will find their rules written for them, possibly to their detriment. Without proactive attention, the sports betting industry may have unwelcome limits imposed upon them.  

About the Author
Christopher Gerlacher

Christopher Gerlacher

Writer and Contributor
Christopher Gerlacher is a Senior Writer and contributor for Gaming Today. He is a versatile and experienced writer with an impressive portfolio who has range from political and legislative pieces to sports and sports betting. He's a devout Broncos fan, for better or for worse, living in the foothills of Arvada, Colorado.

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