Just because you can do something doesn’t mean you should. It appears the legal US sports betting industry was absent the day this lesson was taught in Sports Betting History 101. In fact, the fledgling industry looks to be hellbent on repeating every misstep made in the European markets.

Exhibit A: the on online gambling ad spend. According to the global market research firm (best known for calculating TV viewership):

Currently a $154 million market in the local spot space, online gambling advertising spend has skyrocketed from a mere $10.7 million at the start of 2019. According to BIA Advisory Services, online gambling has the potential to drive more than $587 million into the local spot TV market by 2024. 

Who Is Spending the Most On Gambling Advertisements?

According to Nielsen, the ad spend by operator is dominated by FanDuel and DraftKings, with BetMGM the only other operator with a double-digit share of total spend.

• FanDuel: Total Q1 2021 spend = $57.7 million (37.5% share)
• DraftKings: Total Q1 2021 spend = $43.6 million (28.4% share)
• BetMGM: Total Q1 2021 spend = $24.9 million (16.2% share)

Advertising Fatigue Will Lead to Scrutiny

This new ad revenue may sound like good news, but it will also have some negative consequences.

In 2015, daily fantasy sports operators caught the attention of lawmakers, regulators, and law enforcement officials via a combination of a national news story and a nonstop advertising blitz.

That led to the industry becoming legalized and regulated in dozens of states, but it wasn’t a totally positive outcome, as several states made life miserable for DFS operators.

As was the case with DFS ads in 2015, the uptick in online sports betting ads hasn’t gone unnoticed by consumers.

In Central Pennsylvania, our TV offerings are gambling ads occasionally interrupted by a TV show or the news.

— Richard Schuetz (@Schuetzinc)

This speaks to a concern I voiced in a September 2020 column that reads:

If the  was too much for you, wait until sports betting advertising kicks into high gear. Not only will there be commercials, but there will also be entire pregame shows, halftime shows, and network programming aimed at sports bettors and brought to you by sports betting companies.

The cynic in me believes there will be more discussion of sports betting than sports, and I’m wondering how the average viewer will feel about having gambling jammed down their throats before, during, and after every game.

Or how the non-bettor will feel about their sport’s experience (a two- to a three-hour reprieve from reality) getting hijacked by gambling.

And I wonder how the anti-gambling crowd will respond to pregame show hosts used as some bizarre version of sports betting carnival barkers.

And as Richard Schuetz about a regulatory crackdown:

More importantly, however, the whole insane backlash against gaming that has been taking place on your [the European] side of the pond is probably nothing more than a dress rehearsal for what you can anticipate over here.

What Happens Next With Sports Betting Advertising?

There is little doubt the industry is on a collision course with marketing mandates and increased regulatory action. We’re at a point where closing the barn door accomplishes nothing; the horses have already fled.

That said, the sooner the barn door is closed the better. It doesn’t make any sense to go out and round up the horses if you’re going to bring them back to an open barn. It’s in the industry’s best interest to get out in front of this issue, even if it can’t head it off.

A European-style change is inevitable, but what shape it will take, and who it will impact is debatable.

Beginning with the latter, I have an increasing concern that the current decision-makers believe they won’t be around to deal with the fallout.

People are getting rich selling off their sports betting and sports betting adjacent products, so closing the barn door now might strike them as detrimental to their bottom line. Particularly if they have the mindset that they’ll be long gone (having cashed in all their stock) and someone else will be left to clean up the milk they spilled.

When it comes to what it will look like, my best guess is it will look take dissimilar forms in the different states. Some states will turn the screws tighter than others. That raises the question, how does a company deal with disparate regulations? Do they transport the strictest policies across the nation, or will they individualize their marketing to 30-plus different standards? The smart money is on the former, as the latter would be too cumbersome and always malleable to implement.