Although most states have legalized sports betting, that does not mean the American population has reached a consensus. Indeed, in the first half of 2024, several states proposed and rejected bids to legalize sports betting. In Georgia, news reports showed disagreement between legislators on how sports betting’s tax revenue would be spent. Missouri suffered the same fate, in part, by failing to allocate tax revenue to veterans. In Minnesota, the bill was drafted, but the legislative session adjourned without any progress. Oklahoma’s hopes for sports betting also faltered due to disagreement on the allocation of licenses between commercial entities and Indian Tribes. As of the writing of this article, South Carolina’s attempt to legalize sports betting has stalled.
The pushback against legalized sports betting in these states is understandable because the social costs associated with legalized sports betting are arguably apparent. Today, college sports betting, and, in particular, proposition or “prop” betting, is hotly debated. Prop betting allows a patron to wager on any aspect of the game or an individual player’s performance apart from who wins or loses.
College players, in particular, have reported increased harassment because bettors are allowed to stake their hard-earned money on a player’s individual performance. This has led state legislatures to brainstorm creative solutions to a not-so-standard problem. For example, Connecticut banned prop betting on college athletes, but only for teams located in Connecticut. Other states, like Ohio, have enacted legislation aimed directly at the source. Ohio has declared that the “exclusion from sports gaming of persons who threaten violence or harm against persons who are involved in sports events, where the threat is related to sports gaming, is necessary . . . to protect the interests of this state.” The statute then instructs the Ohio Casino Control Commission to promulgate regulations to implement lifetime sports betting bans (along with potential exclusion from casinos and sports gaming facilities) for those fans who threaten the athletes involved.
But player safety is not the only peril associated with sports betting. The National Council on Problem Gambling (NCPG) reports that between 2018 and 2021 (the most recent year for which data are available), the risk of gambling addiction has grown an estimated 30 percent. The NCPG also saw a roughly 45 percent increase in calls to its helpline between 2021 and 2022. Indeed, the numbers are no better, if not worse, at the state level. For example, Connecticut had a 91 percent increase in helpline calls in the first year of legalization, while in Illinois, calls rose 425 percent between 2020 and 2022. Ohio, which legalized sports betting in 2023, has seen a 55 percent call increase. In 2024, the NCPG estimates that roughly nine million Americans are suffering from gambling addiction, which costs roughly $14 billion a year. While this surge may be due, in part, to the increased visibility and promotion of gambling helplines, legalized sports betting appears to pose a problem with respect to gambling addiction.
Problem gambling is not limited to the general public. In 2024, problem gambling took center stage in the National Basketball Association (NBA) and Major League Baseball (MLB). The NBA banned Jontay Porter, former Toronto Raptors player, for life after suspicions that he altered his performance for the benefit of bettors. Porter ultimately pled guilty to a wire fraud conspiracy for his actions, citing his large gambling debts. Shohei Ohtani, the beloved Los Angeles Dodgers pitcher, had $16 million stolen from him by his interpreter, supposedly to cover the interpreter’s unpaid gambling debts. The interpreter was charged with bank fraud, which carries penalties of up to 30 years in prison.
Current Landscape of Sports Betting Advertisement Regulations
Sportsbook advertisements play a direct role in both the economic benefits to states and the increase in problem gambling. As the sports betting industry is still in its infancy in the United States, state and federal governments are grappling with regulating advertising in a way that seeks to balance the competing interests.
At present, some states require that advertisements contain a problem gambling assistance message. Others forbid the promotion of sportsbooks on college campuses. For example, Maine has adopted comprehensive advertising regulations for sports betting, which it refers to as “sports wagering.” To start, Maine holds its sports wagering licensees responsible for the “content and conduct” for all advertising “done on its behalf or to its benefit” regardless of whether the advertising is conducted by the “licensee, an employee, an affiliate, or any other person or entity.” This puts considerable onus on licensees to ensure that whatever promotion is affiliated with their business complies with Maine’s advertising regulations.
Maine also lists a host of restrictions for advertisements. For example, licensees cannot use guarantees of success, riches, or gambling winnings. Nor can a licensee use tobacco or alcohol to promote sports wagering. Several of the restrictions are directly tied to the vulnerable populations affected by gambling. Advertisements cannot depict anyone under the age of 21, sports wagering cannot be advertised on college campuses to reach people under the age of 21, and licensees cannot use their branding on “clothing, toys, games or game equipment . . . intended primarily for persons below the age of 21.” The advertisements similarly cannot target patrons with a gambling addiction and must include contact information for the problem assistance hotline. Licensees are further required to keep copies of their advertising for five years, along with an account of when and how that advertisement was displayed.
The director of the Gambling Control Unit in Maine can issue discipline of varying degrees for violations of the gambling statutes or regulations, ranging from a written reprimand to a license revocation to a $25,000 civil penalty. But none of the penalties are specifically tied to advertising.
Ohio was the frontrunner in enacting and enforcing advertising regulations. In January 2023, the Ohio Casino Control Commission (OCCC) implemented rules banning the use of “risk-free bets” and “free bet” in offers that require bettors to use their own money before receiving bonus credits. The OCCC has since issued numerous notices of violation and fined three major sportsbooks in amounts ranging from $150,000 to $350,000. Ohio has recently contemplated banning gambling companies from offering promotions related to a “non-gaming consumer transaction.” This restriction would presumably curb gambling companies from appealing to minors.
In 2024, a new trend emerged—banning sports betting advertisements completely. Representatives in Kansas introduced a bipartisan bill, SB 432, that would prohibit any sports wagering advertisements online. SB 432 included one exception for advertisements within an interactive sports wagering platform that were affirmatively accessed by an account holder, but the bill failed in committee.
A Louisiana representative joined the fray by introducing legislation that would have banned all sports betting advertisements regardless of format. If a licensee were to violate the ban on advertising, Louisiana House Bill 727 would mandate license revocation—an unusually harsh consequence. The bill was considered by Louisiana’s House Committee on Administration of Criminal Justice on May 8, 2024, but no further action has been taken at this time.
States appear to be grappling with the pros and cons of sports betting. On the one hand, sports betting brings in massive revenues, often funding education and public safety. On the other hand, a portion of those winnings generally go to address the very problems they perpetuate, like problem gambling. Although sports betting may be an accepted practice in modern America, that has not settled the debate on how states should balance the ills with the good.
Nationwide Regulation on Sports Betting Is Unlikely
PASPA’s Invalidation Returned Power over Sports Betting to the States
In Murphy v. NCAA, the key question before the Supreme Court was one of federalism. The dispute in Murphy pitted New Jersey’s desire in 2012 to legalize sports betting against a 1992 federal law, PASPA, that made it unlawful for a state to authorize such a scheme. As Justice Alito aptly phrased the issue before the Court, it had to consider “whether this provision [in PASPA] is compatible with the system of ‘dual sovereignty’ embodied in the Constitution.”
Before addressing the merits, Justice Alito explained the complicated history of gambling in the United States using New Jersey as a case study. In 1897, New Jersey banned all sports betting via a state constitutional amendment but reversed course during the Great Depression, allowing wagering on horse racing as a way to raise revenue. In 1953, New Jersey began to allow nonprofit organizations to run bingo games, another form of gambling. Bingo games led the way for a New Jersey state lottery in 1970. Nevada was the only other state at the time that offered legal gambling. In 1976, again during a difficult financial time for New Jersey, voters legalized a narrow constitutional amendment to allow gambling in Atlantic City only. This created two gambling hubs: one on the West Coast in Nevada and one on the East Coast in New Jersey. But the Court acknowledges that these hubs were focused on casino gambling, not sports betting. Only Nevada had legalized sports betting at the time.
Compared to casino gambling, the Court explained that sports betting has more obvious societal ills like catering to minors who enjoy sports or the corruption of public sporting events when players are too easily enticed by the prospect of winning big.
So it is against this backdrop that Congress passed PASPA. The rationales for enacting PASPA closely mirror the same disputes that sports betting has today: protecting minors from the ills of gambling and ensuring the integrity of the sports games.
PASPA did not criminalize sports betting; instead, it banned state governments from sponsoring, operating, promoting, advertising, licensing, or authorizing “a lottery, sweepstakes, or other betting, gambling, or wagering scheme” tied to a professional sporting event. It also created a private right of action for the attorney general or a professional or amateur sports organization to enjoin violations of PASPA.
Predictably, a state, this time New Jersey, challenged the propriety of this legislation in the manner contemplated by our dual sovereignty system. Consistent with the empowerment of its electorate to modify its state constitution, in 2011, New Jersey’s citizens adopted a state constitutional amendment permitting sports betting. The New Jersey legislature then passed a slew of laws regulating the contours of sports betting.
In the Supreme Court challenges, the Court had to decide whether PASPA violated the limits of Congress’s constitutional authority by issuing a “direct order” to governments of the states. Put differently, did PASPA force the states to carry out its own agenda? The Court said yes.
As the Court explained, the constitutional prohibition on Congress commandeering state governments has three rationales. First, the dual sovereignty system ensures that state and federal power are balanced to ward off tyranny or abuse. Second, if the federal government were able to coopt state governments, the state electorate may express their dissatisfaction at the ballot box against state representatives, which confuses political accountability. Finally, there is a cost problem. If Congress were able to force states to carry out its agenda, it would impermissibly shift the cost of implementation and enforcement of that agenda to the states.
With that extensive background, the Supreme Court found, easily, that PASPA violated the anticommandeering principle of the Constitution. At bottom, “Congress cannot issue direct orders to state legislatures” either in the affirmative or in a prohibition.
As explained in the introduction, the elimination of PASPA’s prohibition on sports betting allowed individual states to decide if and how sports betting should be permitted. As a result, 38 states and Washington, D.C., now allow sports betting in some form. Despite the Supreme Court’s pronouncement that “Americans have never been of one mind about gambling,” it now seems that Americans are nearing consensus. But, ultimately, individual states are left to their own devices to manage the daily contours applicable to their citizens.
Popularity of Sports Betting Tied to Revenue Raising
As a brief aside, Murphy identified some curious trends on sin taxes and revenue-raising measures. In New Jersey, gambling, which is a universally acknowledged “vice,” was seen as a reliable revenue-raising measure in times of hardship during the Great Depression and in the 1970s, after a period of economic decline. After Murphy, most states have taken a similar approach. States use the massive revenue-raising capacity of sports betting (from licensing fees, taxes, and partnerships with commercial entities) to fund education, problem gambling assistance, and more. For example, in the four years since legalizing sports betting, New Hampshire has raised $100 million for public education. In Arizona, if a patron receives a sizable payout, the licensee must first check whether that patron owes money in the form of child support enforcement, supplemental nutrition assistance program overpayments, court debts, or publicly funded health care debts. If the patron has outstanding obligations, their winnings will be used to pay those liabilities, and only if there are any leftover winnings will the money be paid out to the patron.
But these are traditional areas of state regulation. It is certainly consistent for a state to decide that the revenue generated for other matters at the expense of permitting a vice is, on balance, beneficial for its people. Similar trends are emerging with the legalization of marijuana. Despite the federal prohibition, states have indicated that the benefits (e.g., funding) dramatically outweigh the ills. Because state legislatures and their representatives are more in tune with the needs of their constituents than the federal government, it makes sense for states to regulate gambling to generate vice-taxation.
Betting on Our Future Act—Overview
Murphy sets the stage for dos and don’ts of future federal legislation. In early February 2023, Rep. Paul Tonko (D-NY) introduced the “Betting on Our Future Act,” which, if passed, would ban all advertising of sportsbooks on any medium of electronic communication subject to the jurisdiction of the Federal Communications Commission. In practice, this likely would have meant sports betting operators could not promote their products through cable, television, radio, satellite, and wire but would still leave open advertising through print media such as newspapers or magazines. While this ban may appear novel, existing laws mirror the Betting on Our Future Act’s framework and sentiment, including the Federal Cigarette Labeling and Advertising Act. Specifically, a line of Supreme Court precedent shows increased judicial tolerance for what some call “sin advertising.” Sin advertising includes advertisements of, for example, tobacco, marijuana, liquor, and, of course, gambling.
SAFE Bet Act Raises New Arguments
In 2024, Rep. Tonko has proposed even more dramatic restrictions at the national level for gambling through the SAFE Bet Act. The fact sheet indicates that the SAFE Bet Act would nationally prohibit sports betting except for those states that receive approval from the Department of Justice to permit sports betting. This raises the same anticommandeering questions as PASPA, albeit in slightly different form. Rather than prohibiting state governments from acting, it will instead permit those state governments that have legalized sports betting to continue as grandfathered in. But the practical result is the same. The federal government, going forward, would prohibit states from changing their minds and enacting sports betting in the future in an area that is traditionally reserved for the states. If enacted, the SAFE Bet Act would likely face challenges similar to PASPA.
Where Do We Go from Here?
Despite the purported benefits of a nationwide standard for sports betting advertisements, the Betting on Our Future Act failed to make it out of committee in 2023 and has not gained any traction in 2024. Similarly, the SAFE Bet Act has not gained momentum. Even if these laws were to gain popular support, the recent configuration of the Supreme Court seems even less inclined to uphold nationwide restrictions for sports betting advertisements.
Landmark decisions have decentralized power from the federal government by either curbing the reach of administrative agencies (and thereby returning power to the courts) or reducing the impact of court-made policy decisions (and thereby returning power to the individual 50 states). When layering this lens over a potential nationwide gambling advertisement scheme, it seems unlikely to pass muster. Although Congress has power over interstate commerce, almost none of the sports betting crosses state lines due to the individualized nature of the state-by-state regulations. However, this is still up for debate—some scholars have opined that remote options, like the use of virtual private networks (VPNs) or other proxy sites, could cause Congress to revisit the issue.
The First Amendment cases from 2024 show the Court grappling with the new-age technology along with states, and citizens, that are yearning for restrictions. In Moody v. NetChoice, LLC, Justice Kagan explained that just 30 years ago, the Court had to explain the concept of the internet. Now, myriad forms of communication “have brought a dizzying transformation in how people communicate, and with it a raft of public policy issues.” But consistent with the Court’s decision in Murphy, Justice Kagan emphasized that “government actors will generally be better positioned than courts to respond to the emerging challenges.” By contrast, the courts’ role is generally limited to ensuring that private companies’ rights to free speech remain unimpaired. Accordingly, the Court remanded two cases to the Fifth and Eleventh Circuits to evaluate state laws aimed at curbing social media content moderation.
Again, this reinforces the Supreme Court’s reluctance to involve itself until absolutely necessary. As such, the states will likely work through gambling advertising restrictions on a case-by-case basis. States need to beware that whatever form of advertising restrictions they intend to implement must be entirely above-the-board and applied to all sports betting licensees equally. The best practice for states is to keep the statutes or regulations tailored to identifiable state interests to avoid serious First Amendment challenges.
Conclusion
States are stuck with a trial-and-error process. Sports betting advertisements are not new, and neither are the ills they seek to cure. However, because the precise contours related to sports betting advertisements have not been flushed out, each enactment will face its own challenges. Businesses and others involved with sportsbooks would be wise to monitor the trends and adjust internally such that newly implemented regulations provide limited business disruptions. The general trends seem to be to limit advertising exposure to (1) persons under the age of 21, (2) people suffering from gambling addiction, and (3) people who have voluntarily removed themselves from gambling. Along the same lines, the advertising needs to be (1) true, (2) not misleading, and (3) clear. That’s where regulations related to content are applicable. Truth in advertising is not generally a controversial restriction. Moreover, quality, informative, and true advertising is likely to lure customers to legitimate sportsbooks rather than unregulated and illegal counterparts.
Trends show that advertising related to sports betting is on the decline for the first time since 2016. This could be due to the slew of advertising regulations. Or companies that already have brand recognition may need fewer advertisements and promotions to achieve the same ends. Television ads have seen the largest drop, down by about 33 percent since their peak in 2021.
But a decline does not signal the end of sports betting advertisements. State legislators may wish to make the moral statement about where sports betting ads belong in the hierarchy of their citizens’ day-to-day life. Successful sportsbooks will monitor the trend and adapt before that change may be forced upon them.