New Gambling Rules Pinch Collegiate Revenue Opportunities

Sports betting operators are getting out in front of legislative and other efforts to curtail their marketing efforts by self-imposing a ban on “college partnerships that promote, market or advertise sports wagering activity” and “sportsbook NIL deals for amateur and college athletes.”

Although probably a prudent industry move in the face of concern over problem gambling and criticism of aggressive marketing tactics, the move is still a blow to collegiate rights holders and athletes who were looking to capitalize on the legal sports betting boom.

Many programs had put gaming at or near the top of their prospective sponsor category lists, even though only five partnerships were actually signed at the college level: Caesars Entertainment with LSU and Michigan State, PointsBet with the universities of Colorado and Maryland, and SuperBook Sports with the University of Denver.

Those agreements will sunset on July 1, according to the terms of the ban, which comes in the form of an update to the gambling industry trade group American Gaming Assn.’s Responsible Marketing Code for Sports Wagering. The collegiate prohibition is among a handful of new provisions, including adding a minimum age of 21 for anyone featured in sports betting advertising and banning all use of “risk free” in advertising.

According to the Associated Press, a bill recently introduced in the New Jersey Legislature would ban sports book partnerships with public colleges or universities, while “on Monday, U.S. Sen Richard Blumenthal, a Connecticut Democrat, wrote to 66 colleges and universities asking for information on their efforts to form partnerships with sports books, to prevent underage gambling among students, and treat gambling addiction.”

The AGA’s move likely will stem some of that action at the same time it takes potential revenue off the table for athletic program rights holders such as Learfield, JMI and Playfly. According to the AGA, 33 states and the District of Columbia currently feature live, legal sports betting markets, with three additional markets awaiting launch. More than half of American adults, 146 million, live in a live, legal sports betting market.

Somewhat ironically, the gambling partnership ban could prompt more interest on some campuses in pursuing another controversial partnership category, beer, and joining the growing trend toward allowing beer sales during sports events as a way to secure incremental revenue.