As sports betting marches across the country, a powerful industry continues to grow. The consequences of that rapid sprawl are beginning to come to the surface.
The most recent example of this is the split between PointsBet Sportsbook and the University of Colorado athletics. Their partnership was forged in 2020. In fact, it was the very first deal between a Division 1 school and a sportsbook.
On Wednesday, March 29, PointsBet and CU mutually agreed to end their partnership three years into their five-year deal.
Referral bonus withdrawn from contract in January
Four months after Colorado sports betting launched, CU signed a five-year, $1.6 million deal with PointsBet Colorado that allowed the sportsbook to, among other things, advertise its products on the campus and also at sporting events. That agreement opened the door to other colleges and universities inking deals with sportsbooks across the country.
After CU signed the deal, there was immediate pushback from legislators, educators, students and the public. Pressure continued to mount, especially concerning the $30 referral bonus PointsBet paid CU each time someone signed up with the sportsbook using CU’s promotional code.
Many felt that promotion was attracting new bettors at a young age and that CU was willingly profiting off its students. On Jan. 19 this year, the referral was removed from the contract.
Now, the entire contract has been dissolved.
ESPN’s David Payne Purdum said the split was a mutual decision.
“PointsBet and the University of Colorado have decided it is mutually beneficial to end their partnership at this time. Both parties are thankful for the joint efforts throughout the relationship and wish the best for each organization going forward.”
The University of Colorado Athletic Department did not respond to PlayColorado’s request for a comment.
American Gaming Association makes changes to marketing code
The largest gambling industry trade association, the American Gaming Association (AGA), is strongly against contracts between sportsbooks and schools. It says introducing college students to gambling can cause irresponsible gambling habits in young people.
The AGA recently updated its responsible marketing code to condemn partnerships between colleges and sportsbooks.
The changes to the code are almost entirely on advertising and marketing by online and retail sports betting operators. Some of the changes include:
- Enhance protections for college-aged audiences by prohibiting college partnerships that promote, market or advertise sports wagering activity (other than to alumni networks or content focused on responsible gaming initiatives or problem gambling awareness).
- Prohibit sportsbook NIL deals for amateur and college athletes.
- Add age restrictions (21-plus) for any individual featured in sports betting advertising.
- Change all references to the “legal age of wagering” to 21-plus.
- Ban all use of “risk free” in advertising.
- Formalize an annual process for reviewing and updating the code.
AGA President and CEO Bill Miller also gave the reasons behind the changes in a recent press release.
“Established in 2019, AGA’s Responsible Marketing Code reflects the commitment of our members to set and adhere to a high bar for responsible advertising. Today’s updates advance that commitment and represent our intention to protect consumers and evolve our standards as this nascent market matures.”
Several sportsbooks are not members of the American Gaming Association
In addition to those changes, members of the association were urged not to partner with schools to “promote, market or advertise sports wagering activity,” and that they are not allowed to make name, image and likeness deals with non-professional athletes.
Miller made sure to draw a distinction between proper and irresponsible marketing.
“Advertising plays an essential role in migrating consumers away from predatory illegal sportsbooks and into the protections of the legal, regulated market while providing responsible gaming resources. The AGA and our members are committed to building a sustainable marketplace that protects vulnerable populations and gives consumers the knowledge and tools to keep sports betting fun for adults.”
This strongly worded code, however, carries less weight than it may appear. The AGA is not a mandatory organization that sports betting operators must be members of. Many of the major sportsbooks, including PointsBet and Carsars Entertainment, are not members. Therefore, they are not bound by the organization’s code.
US Senator says deals between sportsbooks and schools are ‘disgraceful’
National lawmakers are beginning to question partnerships between sportsbooks and colleges. US Sen. Richard Blumenthal, D-Connecticut, applauded the code changes by the AGA.
“I think it is really a major step toward setting standards nationwide, which is so desperately necessary.”
Blumenthal also told the New York Times that he feels “national standards enforceable by law” is what is needed to properly regulate the sports betting industry that continues to grow without enough oversight.
“I have no great confidence that self-regulation will work here when the major culprits are not even part of the AGA, and seemingly purposefully so.”
Blumenthal did not stop there.
He recently sent a letter to the chief executive of Caesars Entertainment specifically about sports betting partnerships between Caesars and colleges. According to the New York Times, Blumenthal called on Caesars 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.”