Dem Lawmakers Rip Sportsbooks, Prediction Markets for Targeting Young Adults Through ‘Predatory Advertising’
Letter sent to 12 CEOs of online sports betting and/or prediction market platforms
Five Capitol Hill Democrats sent a letter Monday to a dozen CEOs of online sportsbooks and prediction markets, raising concerns about the impact their apps are having on America’s young adults.
The lawmakers, U.S. Reps. Valerie Foushee (N.C.), Paul Tonko (N.Y.), Betty McCollum (Minn.), Kevin Mullin (Calif.), and U.S. Sen. Richard Blumenthal (Conn.) also called a foul on operators’ outreach efforts to those aged 18-24.
“We are particularly alarmed by the rapid normalization of online gambling among younger Americans and the targeting of this demographic through predatory advertising,” their five-page letter stated.
Kalshi Called Out for TikTok Ad
In particular, the lawmakers called out Kalshi for a TikTok ad in which someone boasted they were able to acquire two years’ worth of rent by trading on the prediction market platform. They also claimed the prediction markets’ partnerships with such news outlets as CNN, CNBC, Dow Jones, and Yahoo Finance have created an environment where Gen Z is more susceptible “to fall victim to a culture of ‘everything is gambling.’”
They also criticized sports betting platforms, in particular bet365’s “Winning is Everything” campaign, for upping their advertising as they all seek to add new customers in an even more competitive landscape. The lawmakers blame the advertising blitz for making young men aged 18-24 twice as likely as anyone else, according to an Ipsos poll from two months ago, to use a daily fantasy, prediction market, or sports betting app.
These trends point towards a broader shift towards normalizing a new, unregulated form of betting for the next generation,” the lawmakers wrote to the operators.
All of the operators that received the letter are currently regulated either as a sports betting operator at the state level or as a prediction market at the federal level. Several states, though, have taken prediction markets to court seeking to block them from offering sports contracts in their jurisdictions. In addition, lawmakers both in Washington and at the state level have filed bills seeking to ban prediction markets from sporting events or require them to abide by state regulations and sports betting tax policies.
Some operators, the five pointed out, have taken some steps to address the issues at hand. However, while the lawmakers hope it shows a good-faith effort from the industry to work with them and their colleagues, the signatories called the steps “insufficient” and “reactive.”
Besides bet365 and Kalshi, CEOs from Polymarket, Caesars, BetMGM, DraftKings, FanDuel, Robinhood, Fanatics, and PrizePicks also received the letter.
Answers Wanted
As part of their letter, the five federal lawmakers want a briefing on the issue of targeting young adults and asked the operators to answer 12 questions no later than May 29.
The letter is the latest step by lawmakers in Congress to call on both sportsbooks and prediction markets to make changes to their operations.
Last year, Tonko and Blumenthal teamed up to file the SAFE Bet Act. Their bill would place federal regulations on several aspects of sports betting, including a prohibition on sportsbooks’ advertising during live sporting events and a ban on promoting bonuses or other incentives. It would also require affordability checks on customers who make $1,000 or more in wagers during a 24-hour period or $10,000 or more over 30 days.
Their bills also would bar sportsbooks from offering prop betting markets on college and amateur athletes. That’s similar to another bill filed last year by U.S. Rep. Michael Baumgartner (R-Wash.).
Blumenthal also filed a bill last year in the Senate, along with sister legislation in the House sponsored by U.S. Rep. Andrea Salinas (D-Ore.), that would earmark a portion of the federal sports betting excise tax to fund grants for states to address problem gambling issues.
None of those bills has advanced to even receive a committee hearing.
Next week, U.S. Sen. Marsha Blackburn (R-Tenn.) will hold a hearing on sports betting integrity issues. Those scheduled to testify include American Gaming Association President & CEO Bill Miller and IC360 Co-Founder and CEO Scott Sandin.
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