Advertising Rules Must Be Reviewed Before Sports Betting Can Move Forward in Kansas
Just as we were reporting on how DraftKings, FanDuel and others were looking to allocate more advertising towards the soon-to-be-launched Kansas sports betting market, we're now learning that Attorney General Derek Schmidt is requiring the state's Lottery to possibly review marketing agreements and advertising rules.
The attorney general’s office approved three proposed regulations but returned others to the Kansas Lottery after “identifying specific shortcomings that must be remedied,” John Milburn, a spokesman for Attorney General Derek Schmidt, said in a news release Friday.
Kansas Lottery Executive Director Stephen Durrell told KSHB-TV on Friday that he is confident the revisions will be made in time for the Sept. 1 target date.
Lawmakers removal of oversight of proposed regulations from other state agencies allowed for the attorney general to solely check for any inproprieties.
Eric Thomas of the Kansas Reflector expressed concerns related to marketing efforts prior to Friday's news.
Publications constantly allow advertisers to blur the line between advertising from a paid sponsor and the journalism from their staff members. That line is particularly hazy these days on the sports web page of the Kansas City Star. The most prominent real estate on the page in the top left quadrant is dedicated to a module labeled “Betting.”
The packaging of that content uses the same fonts, story structures and provides bylines for the writers. However, the content is sponsored.
“We may earn a fee if you make a purchase through one of our links,” the page explains. “The newsroom and editorial staff were not involved in the creation of this content.”
The Wichita Eagle, while owned by the same company as the Kansas City Star, does not display the betting content as prominently on its sports home page, although it does offer review of sportsbooks, some as much as 3000 words.
Headlines for each post promise a “review,” the writer from Gambling.com gushes about the features without ever considering a critique, Thomas notes.
Affiliates for BetMGM were already offering "free money" for Kansas residents looking to open an account.
Finally Sports betting is legal in Kansas Sept. 1! pic.twitter.com/7G7dQdklbr
— Lee777 (@svoth1) August 19, 2022
Larry Straub, an associate professor with the Newman University school of business, predicted last week that online advertisements are probably only the tip of the iceberg if these companies are not reigned in.
“I would equate it to what we see in politics, right? When you get close to elections, you're just barraged with this stuff and I think you're going to see that happen."
A tax rate of 10% will be applied to all sports betting revenue in Kansas. Additionally, a federal tax of 24% is tacked onto gambling winnings in the U.S.
- Gilbert Horowitz, Gambling911.com
