A new study was submitted to the Massachusetts Gaming Commission that focused on the impact of advertising on gambling behavior, and it had some very interesting tidbits.
Gambling advertisements have reached new heights in recent years, as operators pour upwards of $2 billion into marketing their products annually. But there seems to be a dissonance between how effective these sportsbook marketing practices are and the amount of money being spent toward that goal.
There is no denying the Massachusetts sports betting market has grown, but the real question is how much of that growth is caused by increased sportsbook advertising.
New study shows Massachusetts sportsbook ad spend has skyrocketed
The new study received by the Massachusetts Gaming Commission was presented by Dr. Rachel Volberg and funded by SEIGMA at the School of Public Health and Health Sciences at the University of Massachusetts Amherst. Titled “Impacts of Advertising on Gambling Behavior in Massachusetts,” the report takes findings from 2014 and 2022 surveys on the same topic and compares it to its own 2023 study.
The survey itself was incredibly revealing regarding how sportsbook advertising budgets relate to the growth of a gambling company.
Spending on sports betting ads has skyrocketed in recent years. In 2019, operators spent $21.4 million on national television advertising. That figure jumped by an astonishing 1,300% in 2022 to $314.6 million.
Online advertising budgets are even more enormous. In 2021, online advertising expenditures reached $1 billion nationally. In 2022, that figure jumped to $1.8 billion, with the current projections for 2023 pointing toward $1.9 billion.
Sportsbook ads downplay negative aspects of gambling
According to the UMass Gambling Advertising Report, advertising has had “substantial impacts” on the general public’s view of sports betting. And while these impacts aren’t intrinsically negative themselves, the report warns that negative repercussions could result from such practices:
“Based on the research, it is clear that advertising has substantial impacts on attitudes toward and consumption of addictive products, including gambling. Advertising of these products generally emphasizes the positive experiences of use while downplaying the potentially negative aspects.”
“The recent and rapid shift in advertising to digital channels and the evolutions of highly targeted approaches to individual consumers raises further concerns about the potential negative effects of widespread gambling advertising.”
In addition to the potential pitfalls associated with excessive sportsbook advertising, the study also questions how effective these advertisements are in the first place.
Study questions advertising’s role in Massachusetts sports betting growth
Yes, Massachusetts sports betting is growing quickly. In May, Massachusetts sports betting operators saw $587.3 million in wagers, a 29.1% increase year over year. May sports betting handle also pushed Massachusetts to over $3 billion in lifetime sports wagering handle.
Sports betting growth is undeniable in the Bay State, but this new study’s findings call into question advertising’s influence on this growth. According to the study, only a small percentage of respondents felt that advertising had increased their wagering frequency:
“With respect to the impacts of gambling advertising, online a small proportion of online panelists in Massachusetts in 2023 (7.1%) felt that such advertising or news coverage had caused them to gamble more.”
Inversely, one group of respondents claimed that the influx of gambling advertising actually made them gamble less. That section represented 15.1% of all panelists. Additionally, 77.8% of all panelists said they do not believe that advertising from gambling operators had any impact on them.
To paint an even more pallid picture for operators, many potential gamblers largely forget where they saw the ads or who produced them. Of the 7.1% of panelists who said gambling advertising led to them wagering more, one-third of them said it was the New England Casino Association that got the advertising in front of their faces.
Unbeknownst to survey-takers, however, the New England Casino Association does not actually exist. The survey merely added this selection to assess response bias.
This is yet another reason that Massachusetts gaming regulators could look to further restrict advertising pathways utilized by operators. If this massive advertising spending is not making a dramatic difference for operators and residents are failing to even remember which company is advertising to them, limiting it could create a safer environment for state residents.
Take new study with grain of salt when drawing gambling industry conclusions
This study is, without a doubt, revealing in many ways, but there are a few notable limitations to the research.
The report’s first few pages admitted this outright. It stated that assumptions about the general population should not be made from this study because its participants were largely gambling enthusiasts. The report’s Executive Summary cautions readers:
“While the results of online panel surveys cannot be generalized to the population, the data are useful in the early detection of possible negative impacts. The panel surveys carried out in Massachusetts included much larger numbers of gamblers, including gamblers at risk of and experiencing problems, than the general population surveys conducted contemporaneously.”
Additionally, the study compares figures from its 2023 survey to prior surveys in 2014 and 2022. However, each study utilizes a different panel of respondents, which hinders the ability to compare the data fully.
The idea that sportsbook ad spend does not directly correlate with sports betting popularity is an interesting one. But it’s hard to definitively conclude one way or another with this report alone.
When it comes to the “early detection of possible negative impacts”, though, the study does a good job of raising a red flag over the increased presence of sportsbook advertisements in recent years.
Whether these results mean that residents are no longer paying attention to these ads or whether these ads are working so well that residents are unaware of their influence remains up for debate. But as the report notes, these findings are nevertheless “informative regarding the direction of changes of behavior in populations.”
Sports betting’s popularity continues to grow in Massachusetts and beyond. Until sports betting regulators instate tighter advertising restrictions, sportsbooks will continue bombarding residents with advertising, whether it’s working or not.
