Advertising and marketing activities in the gaming industry play a dual role. On the one hand, they promote entertainment activities, encourage consumer loyalty, and increase consumer choice. On the other hand, these advertising activities carry a (legal) responsibility to educate consumers about the risks of gaming and gambling, as well as steer them away from a growing number of illegal operators, which is a hard balance to strike.
Let’s take a closer look at the gaming industry’s advertising laws and what to know.
Advertising laws vary by jurisdiction, but there is a rule of thumb
There is a lot of regulatory focus on the gaming industry today, and new legislation is being introduced continuously. This includes how the gaming products are being catered to the consumer. Compliance professionals who operate in the industry should have a regular cadence for monitoring regulatory changes in their jurisdiction(s) to ensure that their organization’s marketing practices are compliant with the latest version of the advertising and marketing laws.
Gaming advertising laws can be complex and vary according to where you operate. They generally require companies to include clear disclosures and disclaimers in their advertisements to ensure that consumers are fully informed about the risks associated with gambling. Mainly, advertising laws aim to protect consumers from false or misleading advertisements and prevent the targeting of vulnerable individuals, such as children and those with gambling addiction. Enforcement actions may be taken against companies that violate these laws.
Sports wagering marketing code
The American Gaming Association (AGA) estimates that Americans bet over $150 billion on sports each year, with the majority of that still taking place illegally. As states continue to legalize sports betting, the legal market is expected to grow significantly and will need to adhere to the Responsible Marketing Code for Sports Wagering by the AGA.
Advertising and marketing of sports wagering services have to inform consumers about the nature of those services and the terms on which they are available. In addition, advertising plays an essential role in migrating players away from the pervasive illegal market by promoting responsible gaming initiatives.
There are 6 components to the Code:
- Respecting the Legal Age for Sports Wagering (e.g. Advertising should not depict cartoon characters or feature entertainers, athletes, influencers or music that appeal primarily to audiences below the age of 21.)
- Limiting College and University Advertising (e.g. Partnerships with colleges or universities should not include any component that promotes, markets or advertises sports wagering activity.)
- Supporting Responsible Gaming (e.g. No message should suggest engaging in sports wagering is without risk or utilize “risk free” language.)
- Controlling Digital Media & Websites (e.g. Age confirmation mechanisms and geolocation will apply before a user can gain access to any page where individuals can engage in gambling.)
- Maintaining the Code (e.g. AGA updates will apply to new marketing and advertising as of the specified effective date and not applied retroactively.)
- Monitoring Code Compliance (e.g. AGA members shall adopt an internal review process to evaluate whether promotional and marketing messages comply with this code, and will conduct periodic reviews of promotional and marketing messages to evaluate compliance with this code.)
Key areas in gaming advertising laws to keep an eye on
Gaming regulations are evolving fast, as advancing technology transforms the industry, changing both the games to be regulated and the tools available to regulators, suppliers, and operators.
As the industry continues to evolve from a regulatory perspective, it is critical to continuously stay on top of the latest advertising laws and regulations to ensure the organization remains compliant. Here are some key areas that compliance professionals should monitor:
Online gaming advertising laws: Gaming organizations must adhere to the latest version of the regulations around advertising content, placement, and targeting, as well as requirements for disclosures and disclaimers.
Massachusetts is the most recent state to launch sports betting on March 10, 2023, with strict guidelines and warnings on advertising requirements. The Massachusetts Gaming Commission has already issued enforcement actions on several operators that failed to follow these restrictions.
Along with Massachusetts, there are several other states, namely Arizona, Connecticut, Hawaii, New Jersey, and New York, with pending legislation to address the growing trend of limiting gambling advertisements that target minors or college students.
There are also calls to mandate and further restrict these advertisements at the federal level. Pending legislation in the US House of Representatives (HR-967 “Betting on Our Future Act”), introduced on February 9, 2023, was referred to the House Committee on Energy and Commerce. If this law is passed, it would prohibit advertising of sportsbooks on any medium of electronic communication.
State college rules: Some states have specific rules related to online gaming advertising on college campuses. Be sure to familiarize yourself with these rules before advertising on college campuses.
Maryland SB-620 (cross-filed with HB-0802), introduced on February 6, 2023, was recently passed by both chambers of the General Assembly on April 6, 2023. It is now waiting for the Governor’s signature and will prohibit colleges and universities from forming a partnership with a sports betting operator.
Disclosures and disclaimers: Include clear and conspicuous disclosures and disclaimers to ensure that consumers are fully informed about the risks associated with gambling. These disclosures are prominently displayed and easily understandable.
Ad targeting: Online gaming advertisements must not be targeted to minors or vulnerable populations. Companies must use appropriate targeting methods to avoid reaching these audiences.
Social media advertising: Online gaming companies often use social media platforms to advertise their products. Companies must be familiar with the regulations related to social media advertising, including disclosure requirements and restrictions on certain types of content.
Enforcement actions: Regulatory bodies may take enforcement actions against companies that violate advertising laws. Companies should be prepared to respond to any enforcement actions and take appropriate corrective measures to ensure compliance.
In summary, the gaming industry has faced increased scrutiny and regulation in recent years, with some jurisdictions implementing strict rules around the advertising and promotion of these services.
By providing accurate and clear information about the risks associated with gaming and gambling, operators not only help protect consumers but also build trust with their stakeholders, which is key to being successful in the long run.
It is important for gaming and casino operators to stay up-to-date with the latest advertising laws and regulations in their jurisdiction and to ensure that their marketing practices are compliant with these laws. Failure to comply with these regulations can result in significant penalties, fines, and damage to a company’s reputation.
If you would like to learn about an automated way to track and update your list of laws and regulations for gaming, please visit our dedicated page or download our free brochure.