Ethics CasesSport

Cases · NCAA · 2020–2023

Sportsbooks on Campus: University Betting Partnerships and Their Unwinding

After the Supreme Court cleared the way for legal sports betting in 2018, several US universities signed marketing deals with sportsbooks. Michigan State and LSU partnered with Caesars; Colorado and Maryland with PointsBet; and Denver with Superbook. LSU promoted betting in mass emails to students, including some too young to gamble legally, and Colorado's deal paid a referral bonus for each new bettor who used the university's promo code. After criticism from faculty, students, addiction experts and lawmakers, the American Gaming Association banned new college partnerships in March 2023. By mid-2023, the major deals were ending. The case asks whether universities can ethically sell access to their students and fans to an industry that carries addiction risks.

By Tanner Simkins, editor

Timeline

  1. The University of Colorado Boulder signs a deal with PointsBet that includes a referral bonus for each sign-up using the university's promo code.
  2. LSU signs a multi-year, seven-figure deal making Caesars Sportsbook its exclusive gaming partner.
  3. Michigan State announces Caesars Sportsbook as its official sports betting and iGaming partner.
  4. Colorado ends its referral bonuses but keeps the wider deal.
  5. Sen. Richard Blumenthal writes to 66 colleges asking about sportsbook partnerships and underage gambling.
  6. The American Gaming Association updates its marketing code to ban college partnerships that promote sports betting.
  7. The NCAA publishes a survey finding that 67% of students living on campus bet on sports.
  8. Michigan State, Maryland, Colorado and LSU say they are ending their deals.
  9. Louisiana's Act 105, banning public colleges from sports betting marketing partnerships, takes effect.

The ethical issues

  • Duty of care to students, many of whom are under the legal betting age.
  • Conflicts of interest when universities profit from student gambling.
  • Whether responsible-gaming education funded by sportsbooks is credible.
  • Industry self-regulation versus legislation.
  • Universities' brand and mission.

Stakeholders

StakeholderInterests & obligations
StudentsProtection from gambling harm, especially those under 21.
Universities and athletic departmentsRevenue for varsity programs, and their reputations.
Faculty criticsStudent welfare and the university's educational mission.
SportsbooksReaching young, engaged fans and alumni.
Media-rights intermediariesNew sponsorship revenue for college properties.
Lawmakers and regulatorsProtecting young people and setting advertising standards.
Problem-gambling advocatesReducing addiction among young sports fans.

The case

When legal sports betting spread across US states, sportsbooks looked for ways to reach young, engaged fans. College athletics offered stadiums full of them, plus alumni networks and student mailing lists. Between 2020 and 2022, at least five universities signed deals that promoted sports betting: Michigan State and LSU with Caesars, the University of Colorado Boulder and the University of Maryland with PointsBet, and the University of Denver with Superbook.[2] By mid-2023, most had ended.[3]

Background

Michigan State announced its “multi-year partnership” with Caesars Sportsbook on January 13, 2022. Caesars became the official and exclusive sports betting and iGaming partner of MSU Athletics.[1] The assets included broadcast and digital content, TV-visible signage at basketball, football and hockey, naming rights for a new premium seating area in Spartan Stadium and an outdoor tailgating area, and promotional offers for Spartan fans on mobile betting, iGaming and poker.[1] Caesars also committed annual funds for student-athlete responsible gaming education, student scholarships and internships.[1] Michigan State’s athletic director said the deal would “provide significant resources to support the growing needs of each of our varsity programs.”[1] The deal was arranged by the university’s third-party multimedia rights holder, Playfly Sports.[1]

LSU’s deal, struck in 2021 and described by the university as “a multi-year, seven-figure deal,” was the first of its kind for a Southeastern Conference school.[3] Caesars Sportsbook received signage throughout Tiger Stadium and in the venues of LSU’s 20 other varsity programs, naming rights to a 1,500-seat club area in the stadium, and an exclusive spot on LSU’s sports app.[3]

Colorado’s 2020 deal with PointsBet included a $30 referral bonus each time someone signed up with the university’s promo code and placed a bet.[2]

Promoting betting to students

The most criticized practice was direct promotion to students. LSU sent mass emails to students, including some too young to bet legally, encouraging them to “place your first bet (and earn your first bonus).”[2][3] The legal betting age in Louisiana is 21.[3] Students and professors objected, citing concerns about addiction, underage gambling and students losing money needed for their education.[3] One LSU mass communications professor wrote that he was “still sickened by how quickly the people who run LSU were to embrace sports betting, heedless of the potential damage to students and athletes.”[3]

In May 2023, the NCAA released a survey of 3,527 people aged 18 to 22, commissioned by its new president, Charlie Baker. It found that 58% had engaged in at least one sports betting activity, and that 67% of students living on campus were bettors. Of college students who bet, 41% had bet on their own school’s teams and 35% had used a student bookmaker. Sixty-three percent of on-campus students recalled seeing betting ads, and 58% of them said they were more likely to bet after seeing them. Sixteen percent of respondents had engaged in at least one risky gambling behavior, and 6% said they had lost more than $500 on sports betting in a single day. Rates were nearly the same where betting was legal and where it was not.[6]

The rules and governance

No federal law addressed sportsbook partnerships with universities. Governance came from three directions.

Industry self-regulation. On March 28, 2023, the American Gaming Association (AGA), the trade body for the casino and sports betting industry, adopted what it called the most significant changes to its Responsible Marketing Code since the code was created in 2019.[4] The code is voluntary: it binds AGA members, and anyone can flag perceived violations to a compliance review board.[4] It banned sportsbooks from partnering with colleges to promote sports wagering, barred payments to college athletes for name, image and likeness deals, ended the terms “free” and “risk-free” in promotions, required people in betting ads to be at least 21, and limited ads to media whose audience was expected to be at least 73.6% over 21.[2] The college ban had two exceptions: marketing to alumni networks, and content focused on responsible gaming or problem gambling awareness.[4] Existing campaigns could continue until July 1.[2][4] The AGA’s CEO acknowledged the update addressed things “that the industry has taken some jabs on.”[2] The head of the National Council on Problem Gambling welcomed it, noting that “many sports fans are underage.”[2]

State legislation. New York adopted rules prohibiting ads sent to people under 21; Ohio fined sportsbooks over promotional language and fined one company for mailing ads to people under 21; and New Jersey had a pending bill to prohibit partnerships with public colleges.[2] In Louisiana, a bill to prohibit colleges from advertising agreements with gaming entities passed the state House in May 2023.[3] It became Act 105 of 2023, effective June 6. The law bars any public college or university from a partnership that “promotes, markets, or advertises sports wagering activity” with an entity licensed by the state’s gaming or racing regulators, with the same alumni and responsible-gaming exception as the AGA code. It does not impair contracts already in effect.[7]

Congressional pressure. On March 27, 2023, during the NCAA basketball tournaments, Senator Richard Blumenthal of Connecticut wrote to 66 colleges. Universities, he wrote, “have a duty first and foremost to protect student health,” and students’ age and stress make them especially vulnerable to gambling addiction. Citing press reports, he said the Michigan State deal contained only $25,000 to educate athletes on gambling and nothing for problem gambling among students. He asked each school for its contract terms, correspondence, expected profit, whether it received a share of betting on its own games, the share of its students under the legal gambling age, and what it spent on addiction services, with answers due by April 27. He asked schools without such deals to commit never to sign one.[5] A US representative introduced a bill to prohibit online and digital sports betting advertising.[2]

Aftermath

Colorado had ended its referral bonuses in January 2023, while keeping the wider deal.[2] After the AGA code, Colorado and Maryland said they were ending their PointsBet deals.[3] Michigan State announced in May 2023 that its Caesars contract would end early, after faculty petitioned against it.[3] LSU confirmed that its deal was being cancelled and removed the Caesars Sportsbook signs. The marketing company involved said the talks to end it began when the Louisiana bill was filed and the AGA updated its code.[3] The LSU professor said officials were “being forced to do the right thing … not of their own accord but because of external circumstances.”[3]

The core dilemma

Athletic departments face real financial pressure, and sportsbook deals offered significant revenue and, in some cases, funds for education and scholarships. But universities exist to educate and care for students, many of whom are under 21 and in a group with elevated gambling risks. Can a university ethically sell access to its students and fans to a sportsbook?

Competing values

  • Revenue vs. duty of care: funding varsity programs against protecting students.
  • Autonomy vs. paternalism: adult students’ choices against protecting the young and vulnerable.
  • Institutional brand vs. mission: a commercial partner’s goals against the university’s educational purpose.
  • Self-regulation vs. legislation: a voluntary code against binding law.

Strongest arguments

For the partnerships (as signed): sports betting is legal for adults in these states, and sponsorship is a common revenue source for athletics. Some deals funded responsible-gaming education and scholarships. Students over 21 can make their own choices.

Against the partnerships: universities hold a special position of trust with students. Promotions reached students under 21, and referral bonuses gave universities a direct financial stake in students’ betting. Survey data suggested ads increase students’ betting.

A middle position: permit limited stadium signage aimed at adults, but prohibit direct marketing to students, referral payments and NIL betting deals, as the AGA code and several states did.

Applying the frameworks

Utilitarianism

A utilitarian lens weighs athletic revenue, scholarships and education funds against the costs of addiction, underage gambling and financial harm to students. The NCAA survey on ads and student betting is relevant evidence.

Care ethics

A care lens focuses on the relationship between universities and their students, especially young and vulnerable ones. It asks whether a university that emails betting promotions to minors is caring for them.

Virtue ethics

A virtue lens asks what kind of institution a university becomes by partnering with sportsbooks. It also asks whether ending the deals only under external pressure shows prudence or a lack of integrity.

Justice

A justice lens asks who bears the costs and who receives the benefits. Revenue flowed to athletic departments, while the risks fell on students, including those who could not legally bet.

Walk it through: the Simple Decision Model

  1. Spot the issue. You are an athletic director offered a sportsbook deal. Stakeholders include students, athletes, faculty, fans, donors and lawmakers. Less visible are students with gambling problems. The relevant codes are state law, the AGA code and university policy.
  2. Gather facts. Which assets would be sold: signage, emails, app placement, referral codes? Who would the marketing reach? What do surveys say about students and betting? Beware optimism bias about education funds offsetting harm.
  3. Test options. (a) Sign the deal as offered. (b) Sign a narrow deal limited to adult-facing signage, with no student marketing or referral payments. (c) Decline sportsbook partnerships.
  4. Check codes and law. Check state advertising rules, the AGA code, NCAA policy and the university’s own mission and policies.
  5. Decide and document. Record why the chosen option fits the university’s duty of care.
  6. Communicate and follow up. Be transparent with students and faculty. Monitor student gambling and revisit the decision.

What’s settled and what’s contested

  • Settled: the existence and terms described for the Michigan State and LSU deals; LSU’s emails reaching students under 21; the March 2023 AGA code; the ending of the major deals in 2023.
  • Contested: whether any sportsbook partnership is compatible with a university’s mission; whether industry self-regulation is enough; how much advertising drives student gambling harm.

Why this case matters

The rise and fall of university sportsbook deals shows how quickly commercial opportunity can outrun institutional ethics, and how outside pressure can force a correction. It is a case study in duty of care, conflicts of interest and the limits of self-regulation.

Key terms

Duty of care
The responsibility of coaches, organizations and institutions to protect the health, safety and well-being of those in their charge. It is not a license for total control.
Conflict of interest
A situation where a person’s private interest could improperly influence a decision they make in an official role.
Commercialization
The process of turning sport into a product and a business enterprise, with profit pressures that can compete with principle.
Brand as ethical promise
A brand is more than a logo: it is a promise to stakeholders about values and conduct, and it is broken when actions contradict it.
Stakeholders
Everyone with something at stake in a decision: athletes, coaches, parents, officials, fans, employees, sponsors, media, communities and regulators, including the less visible ones.
Institutional accountability
Structures that make a sport organization explain its decisions and face consequences: clear authority, transparency, appeals, independent oversight and enforcement.

Definitions from the Ethics Cases glossary.

Discussion questions

  1. Colorado's original deal paid the university a referral bonus for each new bettor who used its promo code. How does that change the ethics compared with stadium signage?
  2. Michigan State's deal funded responsible-gaming education and scholarships. Does that offset the risks of promoting betting to students?
  3. The deals ended mainly after an industry code and proposed state laws, not university initiative. What does that say about institutional accountability?
  4. Should universities treat sportsbook sponsorships like alcohol or tobacco sponsorships? Why or why not?

Sources

  1. Caesars Sportsbook named Official Sports Betting & iGaming Partner of Michigan State Athletics — Michigan State University Athletics
  2. U.S. gambling group bans marketing partnerships with colleges — Fortune (Associated Press)
  3. LSU ends Caesars pact amid criticism of school's marketing practices — WBRZ (LSU Manship School News Service)
  4. New updates to AGA Responsible Marketing Code for Sports Wagering prohibit 'risk free,' enhance college-aged protections — American Gaming Association
  5. Letter to colleges and universities on sports betting partnerships (March 27, 2023) — Office of Sen. Richard Blumenthal
  6. NCAA releases sports wagering survey data — NCAA
  7. Résumé Digest, Act 105 (SB 191), 2023 Regular Session — Louisiana State Legislature