The NC Lottery Commission has drafted rules requiring only those promo offers that genuinely require no financial commitment from the bettor to be labeled “free” or “risk free.”
The NCLC is responding to scenarios where sports betting operators have used misleading terms like “free bets” and “risk-free bets” to lure bettors into taking promos that are not free or risk-free at all.
The regulation on language surrounding operator betting promos is part of the NCLC Sports Betting Committee’s second round of rules that will remain open to public comment until Nov. 27. These rules must be codified before North Carolina online sports betting launches in 2024.
Not-so-risk-free bets catch the ire of regulators and sports leagues
In recent years, “risk-free bet” and “free bet” have appeared in operator promos aimed at attracting new customers.
The language suggests that a player can recuperate a lost first bet with a “free bet,” so there is no risk involved in placing it. However, the practice has involved bettors receiving site credits for lost bets rather than money. If those site credits are then re-wagered and lost, the initial bet stake is not refunded and the player has assumed all the risk.
In early 2023, the NBA outlawed using “free” and “risk-free” in all league content. Ohio became the first state to ban all use of the terms when it launched sports betting on Jan. 1, 2023. Massachusetts followed suit shortly after when it launched online sports betting. Pennsylvania and New York also ban the use of the terms.
Operators have also taken it upon themselves to stop using the terms after receiving significant blowback from responsible gaming proponents.
FanDuel now uses “sweat-free” bet. Other sites have used terms such as “no-sweat first bet” and now offer “bonus bets” instead of free bets.
The renaming of these bets represents a larger marketing trend toward responsible gambling practices and non-predatory advertising.
NC Regulators haven’t outlawed “risk-free” bets, per se
NC online sports betting regulators haven’t outlawed “free” and “risk-free” bets entirely. They have, however, imposed strict restrictions on where those labels would apply.
Under the proposed rules, only on promos and bonuses that are “in fact free and without any cost to the player” can an operator apply the term “free bet.”
The same applies to “risk-free” bets. That term cannot be applied “if those promotions or bonuses require the Player to incur a loss or risk the Player’s own money to use or withdraw Winnings from the purportedly risk-free Wager.”
The NCLC hopes this rule will eliminate the conditions most bettors don’t catch when they see the enticing “free bet” offer. Those conditions that return lost money to the bettor in the form of site credit or disallow cashing out until a certain dollar amount of the player’s own money has been wagered.
With a public comment period open for the next three weeks and a public hearing on this round of rules scheduled for Nov. 20, we’ll see if the public has anything to say about the Commission’s stance on this terminology, and if they’d rather see it outlawed entirely.