Massachusetts broadcasters are letting lawmakers on the Legislature’s sports betting conference committee know about the unintended consequences an in-game sports betting advertisement ban could have on their industry.
The MA Senate included the whistle-to-whistle ban on sports betting TV and radio ads in its version of the sports betting bill. The intention is to keep kids watching games from seeing the advertisements.
Jim Smith, counsel for the Massachusetts Broadcasters Association, told PlayMA the ban “has all kinds of problems logistically, legally, rationally and practically.”
“The legislation that the Senate passed is a real problem for us. The Senate bill doesn’t block advertising. So folks who want to advertise will do so on social media. And the under-21 audience is more likely to be on social media.”
Ban could hurt small Massachusetts companies
The Massachusetts Broadcasters Association represents 98% of all radio and TV stations in the commonwealth.
Smith contends the Senate restrictions in H 3993 wouldn’t stop sports betting advertising. They merely would shift ads from local radio and TV stations to large tech companies such as Apple, Google and Facebook.
“These dollars will be spent,” Smith said. “They just won’t be spent in Massachusetts. The unintended consequence is hurting local news and local broadcasting. Most people think broadcasting is giant national companies. But most radio is small local stations.”
All radio revenue comes from advertisements. Smith noted that over the past 20 years, overall revenue of Massachusetts broadcasters is down about 50% as advertisements headed online.
Smith pointed out a lot of small, local radio stations around the state carry Patriots and Red Sox games.
“That would be a huge loss to them if they couldn’t sell those ads,” Smith said. “I’m not sure what the Senate had in mind, but it certainly hurts local broadcasting. Our ability to report the news and what we do in local communities all comes out of the ad dollar.”
Can’t stop national advertisements
Smith said the biggest problem with the ban is the impractically to implement.
He explained when a local Fox TV station broadcasts an NFL game, 95% of ads are national advertisements provided by Fox. The local stations are contractually obligated to run these national ads.
“Is Fox 25 [in Boston] somehow supposed to block out ads?” Smith said. “Can they do that? I don’t think they can. I’ve never seen it before. What are they going to do, just have black space? They have a contract that says you gave us a football game, we’ll carry everything else that goes with it, which of course includes the ads.”
Massachusetts can’t stop, for example, Massachusetts-based sports betting company DraftKings from placing ads with a national broadcaster.
“If DraftKings buys a national advertisement, they pay for a national audience,” Smith said. “They don’t pay for a major metropolitan area not to carry the ad.”
Being a local company, DraftKings also might want to support local broadcasters. But, if the Senate language prevails, that won’t be allowed.
“If national ads can run, it defeats the purpose of the language,” Smith said. “Then only the locals can’t get money.”
Radio signals cross state lines
Smith also noted radio stations in New Hampshire, New York and Rhode Island all offer sports content that crosses over into Massachusetts.
There’s no real way to limit the radio signal coming across the border with in-game advertisements.
So whether the advertisements are national or originating in other states, there’s no way to stop sports betting advertisements from coming into Massachusetts.
“I don’t think the Senate considered every aspect of this thing when approving it on the Senate floor. It would be very different if the entire nation takes this approach. The reality is these border communities have no control and none of us have control over national broadcasts. The money will be spent, just not in Massachusetts. It will be a real mistake if this comes to pass.”
Ban would be challenged in court
If Massachusetts does finalize language with the advertising ban, Smith expects it to face multiple challenges in court. He can see broadcasters and sports betting operators leading the charge.
“If passed, I think it definitely will be challenged in court,” Smith said. “There are so many questions and legal issues raised. DraftKings has a First Amendment right to speak. And if they have the resources to buy an ad, they have those rights. They’re not offering an illegal product.”
Optimism ban doesn’t make final bill
Smith said he has spoken with all members of the conference committee about the harm the in-game ban would do to local Massachusetts broadcasters. He said the House members were receptive, as expected. He also has a supporter in Sen. Patrick O’Connor.
The committee met for the first time Thursday. The public portion of the meeting lasted a few minutes before the committee went into executive session to conduct discussions privately.
Smith also spoke with Sen. Michael Rodrigues and Sen. Eric Lesser. Rodrigues spoke in favor of the ban on the Senate floor. Smith is optimistic he’s making headway with lawmakers.
“I think the Legislature does want to be helpful here and sees no reason to penalize small local broadcasters,” Smith said. “I know that our arguments do withstand scrutiny. It’s hard to argue that gaming companies won’t advertise.”
In the end, Smith is hopeful common sense wins out and the advertising ban doesn’t make the bill.
“We’re not the first state to legalize sports betting,” Smith said. “There’s no proof at all in other states that don’t have whistle-to-whistle bans that something bad has happened. So there’s no rationale for this, no harm of public interest. It does not meet their goals because social media will take the ads and run them. And every kid aged 6 to 21 knows how to use an iPhone.”