SBJ/May 17 - 23, 2004/Opinion

Rolling the dice with gambling entities

“CART books”

“Minnesota launches first licensed NHL lottery game from Scientific Games and MDI Entertainment”

“Sun plays in shadow of casino; Is WNBA team taking gamble in Connecticut?”

This sampling of news headlines from the past year or so, announcing the growing marriage between U.S. sport and legalized gambling entities, stands in stark contrast to a mere decade ago. Back then, sport organizations vigilantly maintained a steadfast firewall against associations with gambling enterprises, fearful of not only the messages that any such associations would send to young fans, but also the potential impact they could have upon the integrity of their product.

Given today’s mantra — ”new revenue streams” — pro sport organizations, while still staunchly opposing sports betting per se, have viewed their partnerships with gambling entities as merely a byproduct of an increasingly accepted form of social behavior. As one pro league commissioner recently stated on national TV: “Gambling is the American way. Gambling is out of the bag. We are a nation of lottery players, slot-machine players, etc.”

The growing marriage of pro sports and legalized gambling raises issues that should be of concern to sports organizations and their various stakeholders. For instance, are there potentially negative effects that gambling sponsorships may have on the attitudes and perceptions of consumers not only toward the sports organization itself, but also toward gambling generally and sports-related gambling in particular?

“Lottery to help out Canadian NHL teams”

“Casino ads in MLB stadiums? You bet”

While gambling may not pose the health risks of tobacco and alcohol, it generates its own brand of personal, social and economic risks. Clearly there are contradictions on two fronts in sports’ growing association with legal gambling. First are the potential risks associated with gambling that, as with tobacco and alcohol sports sponsorship, are inconsistent with the health and social benefits of sport consumption.

Second, the association of sports organizations with gambling entities raises a unique issue that, albeit indirectly, invokes “integrity of the game” concerns. As U.S. Rep. Tom McMillan recently suggested while predicting an even stronger alliance between gambling and sport in the next decade: “[A]ll you need is one major incident and you can do tremendous damage to the integrity of sports. I think that’s a risk factor that professional sports … need to take a look at.” Pro sports’ embrace of legal gambling has removed the firewall, and when the mother of all pro gambling scandals hits, they will not have that firewall to hide behind.

“The marriage of pro sports and legalized gambling raises concerns on many fronts. Not least is how it shapes the fans of tomorrow.”

“Oneida Nation becomes Packers sponsor”

“Indian gaming tribes try their luck at sports venues”

A recent poll conducted by ESPN The Magazine found that half of Americans 16 and older (an estimated 118 million people) have placed a bet on sports in the past 12 months, including office pools, gambling with friends, horse racing and casinos. This poll also found that 52 percent of Americans believe that some sports are fixed, including 60 percent of regular bettors. Nearly two-thirds of people in their 20s believe betting on sports is “no different” than buying a lottery ticket, while 41 percent see Internet sports betting as “perfectly harmless.”

Given these figures, pro sports organizations need to become better educated not only about their consumers’ perceptions of and attitudes toward gambling sponsorships, but also about the potential consequences such sponsorships may have on sports-related gambling behavior in the future.

Academic research provides a lens through which to view the potential impact of gambling sports sponsorship. Given that gambling sponsorships can be assessed within the category of “vices,” an appropriate starting point is research into the impact of tobacco and alcohol sport sponsorships upon consumer attitudes, perceptions and behaviors.

What should be of particular concern are the effects of legal gambling sponsorships on adolescents, since gambling, like tobacco and alcohol use, has been shown to start during adolescence. Academic research, much of it conducted outside the United States, suggests that both tobacco sponsorships and sports marketing promoting beer can have significant detrimental effects on young consumers. One research team, for instance, found that a single exposure to tobacco sponsorship advertising reinforced existing smoking behavior among young New Zealand male smokers, created more favorable attitudes toward smoking among non-smokers, and increased non-smokers’ brand awareness, thus suggesting that sponsorship fulfills a function very similar to product advertising.

“Take a shot — win a dream trip to the NBA playoffs; California Lottery/NBA scratchers score big prizes”

“Par-A-Dice ECHL All-Star festivities a success”

In a 1996 study of Canadian youth ages 12-15, researchers found that half of the respondents associated the visual image of a tobacco-sponsored racing car with the sponsoring brand. Another study in Australia found that the brands most popular with children 12-14 were the same brands that sponsored the state’s major league football competition.

Furthermore, a study on the effects of racing sponsorship by cigarette brands, involving secondary school students in Montreal, found that advertising at the Formula One Grand Prix event was more likely to affect spectators’ consumption habits if their interest for racing was higher, if their identification with the tobacco brand was higher, and if the adolescent spectators were male.

Research studies such as these suggest that gambling sports sponsorship may have the similar potential to impact attitudes and behaviors with respect to gambling behavior, particularly among younger fans.

“Flames roll dice on casino in arena: NHL team wants gambling facility in Saddledome”

“Sycuan Tribe buys right to link name with Padres; Sponsorship deal could be a first”

So, what is the message that professional sports organizations are sending to their customers by licensing team logos to state lotteries, by distributing lottery tickets to fans in the arena, by handing out premiums bearing the logos of a local casino and local team side-by-side? What are the effects of such sponsorship activities upon sport consumers, and particularly adolescent fans? Ultimately, are the marketing partnerships between gambling entities and sports organizations a Faustian financial fix that may, over time, erode brand equity, taint consumers and ultimately call into question the integrity of the games themselves?

As the relationship between legal gambling and professional sports organizations continues to grow, so too should the discussion over potential effects that these relationships may have upon the attitudes and behaviors of sports consumers and, especially, the fans of tomorrow.

Steve McKelvey teaches sports law and marketing at the University of Massachusetts-Amherst.

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