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Last week, Google launched a beta update for its Google Ads platform in New Jersey. The new version allows licensed NJ online sportsbooks to use the world’s most powerful advertising service for the first time.
This is huge news for the sports betting industry, and potentially online gambling as a whole.
Google is exceedingly careful about gambling, previously limiting ad space to state lottery programs. Now sportsbooks can purchase digital real estate in NJ, and permissions figure to follow for other markets and verticals soon.
888 executive Yaniv Sherman explained the change to investors during a recent earnings call:
“It’s another development, and for us, it means this is good news. We are online animals. We are online DNA. This creates a competitive edge, and it broadens the marketing pie for us to choose from.”
Google Ads is a platform that allows companies to “display brief advertisements, service offerings, product listings, video content, and generate mobile application installs within the Google ad network.”
Through the Google Ad Exchange, operators can also bid on digital advertising space across the internet in real time.
Google then feeds these ads to millions of websites within the network, tailoring them to the page’s content or the reader’s browsing habits. Ads appear next to search results too, providing a cost-effective way to reach a big audience.
Here’s how the company describes the benefits:
If you go butterfly hunting during the height of summer, the bigger your butterfly net, the more butterflies you’ll be able to catch. The same goes for your customers: if you use a wider net, you might be able to capture customers from high-traffic parts of the web that weren’t previously available to you.”
Google boasts that its ads reach more than 90% of the world’s internet users. State-regulated online gambling sites, however, have been excluded from the platform since the beginning.
One problem that makes life difficult in regulated markets — especially newly regulated ones — is informing the public about the legality of online gambling. There’s a percentage of prospective customers that simply don’t know online gambling exists in a legal, state-regulated environment.
Land-based casinos have an advantage over online brands in that they own physical real estate they can use for advertising. Not only do online-only operators not have that luxury, they’ve also been shut out of the largest digital marketplace.
Google Ads is arguably the most powerful tool for reaching into corners of the market that traditional advertising channels can’t.
Though the door has cracked open, Google still imposes heavy restrictions on gambling advertisement:
Terms of service also provide restrictions related to responsible gambling, none of which should be new to licensed operators:
“With respect to your gambling activities, you will not invite, encourage, nor permit under-21s to gamble and will maintain appropriate age verification systems and procedures, including:
- providing a notice on your website that users under 21 are prohibited from participating in gambling
- warning potential end users that underage gambling is an offense
- requiring end users to affirm that they are of legal age
- regularly reviewing your age verification systems
- ensuring that relevant staff are properly trained in the use of age verification systems
Promoted websites must also include a call to action for responsible gambling and display the 1-800-GAMBLER phone number.
Last week, Apple introduced tough new requirements for gambling apps which take effect in September. The changes will force some operators to rewrite their iOS code entirely to keep their apps in the App Store.
A number of gambling apps will almost certainly exit the store — at least for a few months — while the task is in progress. Android alternatives are available, of course, but far more customers use iPhones than Android devices.
This is not an isolated problem either.
For years, operators have struggled with banks declining credit and debit card transactions. Issues date back to 2006, when passage of the Unlawful Internet Gaming Enforcement Act made it a federal crime to process transactions tied to illegal gambling. State-regulated online gambling didn’t exist at the time, so a full ban on associated transactions was the simplest solution for banks.
Having re-profiled their systems, financial institutions are very slowly making the changes necessary to serve legal operators. Evidence from the recent launch of online gambling in Pennsylvania, however, shows that it’s still a work in progress.
Marketing for online gambling operators remains difficult despite being fully legal in a handful of jurisdictions. Even YouTube, which Google owns, recently removed hundreds of videos advertising links to legitimate online poker sites.
There’s no doubt that Google is aware of the advertising investment that comes with the expansion of legal sports betting in the US. And it’s fairly obvious that the policy change is designed to capture some of that revenue.
Google generates over 80% of its revenue from Ads and related services, and the sudden explosion of legalization creates an opportunity that is too big to miss.
The beta is only live in New Jersey for now, but Google will likely expand permission into other states with legal online gambling. And it will almost certainly include verticals other than lottery and sports betting.
If that all comes to fruition, online poker might just get the boost it so badly needs.