US Regulators Step Up Oversight of Sports Betting Ads and Prediction Markets
Regulators across the United States are increasing scrutiny of sports-betting advertising and prediction-market products.
LISTEN TO THIS ARTICLE:In the last year, state and federal authorities have moved from guidance to enforcement as concerns mount about the consumer harms associated with aggressive marketing and novel wagering products. The New Jersey Division of Gaming Enforcement and the Michigan Gaming Control Board have issued formal advisories and compliance letters aimed at curbing advertising practices that could target vulnerable groups and at limiting so-called prediction markets that allow bets on political or non-sporting events.
Officials in New Jersey told operators to review promotional material for potentially misleading claims after a series of high-spend campaigns from national operators, including DraftKings, FanDuel and BetMGM. Meanwhile, Michigan regulators reiterated restrictions on prediction markets following complaints that some platforms blurred the line between opinion polling and gambling, increasing the risk of unregulated activity entering mainstream sportsbooks.
Federal agencies are watching closely. The Federal Trade Commission has signaled it will coordinate with state regulators on deceptive advertising, while lawmakers in several state capitals – including Trenton and Lansing – are considering tighter statutory limits on how and when operators can promote odds, bonuses and credit offers.
Industry officials say enforcement activity has accelerated since late 2023. A spokesperson for Caesars Entertainment said the company is updating its national advertising standards to reflect emerging regulatory expectations and reduce the risk of cross-border noncompliance. BetMGM and DraftKings have also disclosed expanded compliance teams tasked with reviewing marketing and product launches before they go live.
Related: Prediction Markets Could Reshape U.S. Sports Betting, Report Finds
Industry Reaction and Next Steps
Operators are responding by scaling back certain advertising channels, tightening age-verification protocols and pausing new prediction-market pilots. Some operators are removing promotion-heavy ads from sports broadcasts and social media, while reallocating spend toward responsible-gambling messaging and local sponsorships that emphasize community partnerships.
Legal advisers and compliance directors indicate that the current enforcement trend will likely produce a mix of administrative actions and negotiated settlements rather than large-scale criminal cases. That path mirrors earlier regulatory responses in the UK and other mature markets, where enforcement focused on rectifying system failures and strengthening consumer protections rather than punishing isolated marketing missteps.
However, smaller operators and international entrants face a tougher road. They often lack the compliance infrastructure of the major U.S. brands, and regulatory scrutiny raises the cost of entry and day-to-day operations. State regulators have expressed concern that insufficient compliance can expose consumers to misleading offers and complicated wager mechanics that are difficult to understand.
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Expert View
Regulatory attention on advertising and prediction markets is a logical response to rapid product innovation in the US betting space. Operators moved quickly to monetise new formats and audience segments, but regulators are rightly focused on transparency – how products are marketed, how risks are disclosed, and whether consumers can make informed choices. The next phase will be about building durable compliance frameworks: stronger age and identity checks, clearer marketing standards, and independent auditing of promotional claims."
Analysts at Eilers & Krejcik Gaming note the shift could recalibrate operator strategies in 2024 and beyond. Tighter marketing rules may compress acquisition economics, prompting operators to invest more in product retention, customer service and responsible-gambling tools rather than high-volume bonus offers.
For regulators, the challenge will be balancing consumer protection with a competitive market that generates tax revenues and employment. Several state regulators have signalled a willingness to work with operators on phased compliance plans, but warned that recurring breaches would draw stronger penalties, including fines, license restrictions and public enforcement reports.
As the regulatory environment evolves, operators, investors and policymakers will be watching closely for the next set of formal rule changes and any model enforcement actions that could set precedent across multiple jurisdictions.
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