Two Kansas lawmakers proposed banning online sportsbook ads aimed at state residents. Republican Sen. Virgil Peck and Democratic Sen. Cindy Holscher are the bill’s sponsors. Congressman Paul Tonko proposed a similar federal law.
The bill’s text would be added to the Kansas online sports betting law. It reads as follows:
“No advertisements for sports wagering shall be published, broadcast or otherwise presented through any internet website, other online medium or electronic device application, except such advertisements may be published as part of the content offered by an interactive sports wagering platform that has been affirmatively accessed by an individual holding an account with such platform.”
Most people are understandably sick of TV ads related to online sports betting. However, in most cases, online ads are on affiliate sites like this one. Most visitors come to these sites specifically to read about online betting. Large affiliate companies sometimes buy sponsored posts on mainstream news websites. This masquerades advertising as legitimate news and helps with SEO. While annoying, it is not illegal and is usually properly disclosed.
Affiliates help move players from unlicensed to licensed sites
Affiliate companies dominate search engines for state betting sites. Most are legal ones, though a few offshore ones make it to page one. These websites are full of information about legal betting. This helps convert players from offshore sites to legitimate ones that pay taxes and are regulated by state agencies.
Offshore sites will ignore this law if it passes
If this Kansas sports betting advertising bill passes and survives court challenges, it will hurt the legal industry and help the illegal one. Offshore sports betting sites and affiliates will continue to push unlicensed operations to Kansas residents.
Many offshore affiliates pretend the sites they promote are legal. If legal Kansas sportsbook affiliates are banned, the illegal sites will advertise that their business is legal and move to the top of Google for these searches. This will confuse the market and send unsuspecting Kansas bettors to unlicensed sites they think are legal. It would hurt tax collections and player protection, the two main goals of the legislation.
Here is an example of the type of page that would rank if Kansas bans legal affiliates:
This is from a Virginia news site called Augusta Free Press. The article shown above is not marked as a sponsored post, even though it clearly is one. Why is a Virginia news site writing about Kansas offshore online casinos if it is not paid to do so? This will continue, regardless of what Kansas law says.
Kansas does not license affiliates
About half of the states with legal online sports betting require affiliates to acquire vendor licenses. There is usually a small fee and a basic background check involved. At that point, the state can regulate what affiliates do in terms of online advertising. Kansas does not do this.
If the state is so concerned about affiliate behavior, and there are some reasons it should, then license the companies that promote Kansas sports betting. Create advertising standards, like eliminating “risk-free” and “free bet” language as other jurisdictions already did. State regulators could demand that sites only receive advertising money instead of pay-per-player or revenue share. It could do anything it wants, within reason.
Banning online sportsbook advertising seems like taking a shortcut and ignores the real problem of offshore gambling. Since Kansas can’t do anything about all the TV advertising, this feels like a way to say lawmakers tried to do something, but it would have the opposite effect than what is intended.