Facing Criticism, a Gambling Company and a University End Their Deal

With lawmakers and educators pressuring gambling companies and universities over deals they have made to promote sports betting on campuses, one of the most noteworthy and heavily criticized partnerships was disbanded Wednesday.

PointsBet announced that its agreement with the University of Colorado Boulder, which included $1.6 million to promote sports gambling on campus, was being mothballed.

“PointsBet and the University of Colorado have decided it is mutually beneficial to end their partnership at this time,” a PointsBet spokesman said in a statement. The agreement had already been modified in January to remove a $30 referral bonus paid to the university every time somebody used its promo code and placed a bet.

Now, the main gambling industry trade association is trying to ensure no similar deals follow by releasing guidelines aimed at severely limiting how sports betting is marketed to college students and at schools.

That organization, the American Gaming Association, revised its responsible marketing code for sports wagering on Tuesday. Among other changes, members were prohibited from partnering with schools to “promote, market or advertise sports wagering activity” and from making so-called name, image and likeness deals with amateur athletes.

In theory, the effect of these limitations will mean sports betting companies will engage only with college alumni groups, and their only presence on campuses will be to promote responsible gambling.

But the practical effect could be more limited. Not all gambling companies — including some of those with the largest presences at colleges, like PointsBet — are members of the A.G.A., and enforcement of the voluntary code is limited to a system of conveying complaints to companies.

“I think it’s really a major step toward setting standards nationwide, which is so desperately necessary,” said Senator Richard Blumenthal, Democrat of Connecticut, who in recent months has questioned gambling companies and universities about their relationships.

But he added that revisions to the trade association’s code did not change his belief that “national standards enforceable by law” were still needed to regulate the sports betting industry.

“I have no great confidence that self regulation will work here when the major culprits are not even part of the A.G.A., and seemingly purposefully so,” Blumenthal said.

Since the Supreme Court’s 2018 ruling that struck down the law that banned most sports betting, states have passed a mishmash of laws to legalize and regulate the practice. About two-thirds of states now allow some form of sports betting, and besides restrictions on underage betting and some taxation, many states only lightly regulate the industry.

With college sports such a powerful force in both sports and sports betting — the A.G.A. estimates 68 million Americans planned to wager a total of $15.5 billion on the Division I men’s basketball tournament this year — some gambling companies have rushed to strike agreements with collegiate athletic departments.

Last year a New York Times investigation found that at least eight universities had partnered with online sports betting companies and more than a dozen athletic departments and booster clubs had agreements with brick-and-mortar casinos. Some of the marketing directly encouraged college students, many of them not of legal age, to place bets, while others directed millions to athletic department coffers while providing scant amounts to address gambling addictions.

Some of the biggest college partnerships are with Caesars Entertainment, which withdrew from the A.G.A. in 2020, and PointsBet, which has never joined. It is not clear how many of these will endure, but the backlash against marketing sports betting on college campuses is growing.

Last year, Caesars offered Michigan State a deal worth $8.4 million over five years to promote betting to the university community, including “Caesarizing” the tailgating space outside the football stadium. A member of the negotiating team called it “the largest sportsbook deal in college athletics.”

Caesars and two of the colleges it is most prominently involved with, Michigan State and Louisiana State, did not respond to a request for comment.

Casey Clark, a senior vice president of the A.G.A., said the marketing code, which was first introduced in 2019, was always meant to change. The A.G.A. and its member companies are “in constant consultation of how we evolve the standards we set for ourselves,” he said.

Most regulation of sports betting occurs at the state level, and Clark said the A.G.A. welcomes these new standards or something similar to them being written into law, pointing to New York, Massachusetts and Arizona, where that is already being done.

The new code, Clark said, was not an effort to stave off regulation. “Everyone involved in this business should have and does have a shared interest in an informed public and creating the right kind of protections for consumers,” he said.

Political scrutiny of the industry is ongoing.

Blumenthal wrote a letter to the chief executive of Caesars about its partnerships with colleges in November, calling upon him to “end this disgraceful practice in order to protect students and prevent the irreparable harm that will be caused by Caesars marketing practices and college partnerships.”

Blumenthal said the response he received from Caesars was “not substantive” and that “chances are pretty good we will be asking them detailed questions because we want to know the full scope of activities.”

Earlier this week, Blumenthal requested information from 66 schools with the largest football and men’s basketball programs about their communications and partnerships with gambling companies. If he is not satisfied with the responses, he laid out the steps that could be taken to compel answers.

“Hearings is one of them,” he said. “Whistleblowers are another. And finally we have some subpoena powers. All I would say is, stay tuned.”

Source: Read Full Article