Taking a Gamble: University of Colorado’s Advertising Deal with PointsBet and What it Means for Compliance with NCAA’s Wagering Prohibition
By: Rachel Young* Posted: 11/06/2020
This past September, the University of Colorado (“CU”) signed an advertising deal with sports bookmaker PointsBet. The deal, believed to be the first of its kind, is high-profile and groundbreaking for multiple reasons: first, Colorado and many other states only legalized sports betting in the last year, so this is the first deal with a bookmaker outside of Nevada. Second, the NCAA opposes sports gambling and it is one of the first betting deals in NCAA Division I athletics. Third, despite the NCAA’s prohibition on “any sports wagering activity that involves intercollegiate, amateur or professional athletics,” the NCAA approved CU’s deal with PointsBet. This raises a few important legal questions; now that the door to collegiate sports gambling has been opened, will schools across the United States be able to follow CU’s lead? Additionally, how will the NCAA enforce its prohibition on gambling as deals similar to CU’s arise?
History of Sports Betting
Until May of 2018, sports betting was outlawed at the federal and state level by the Professional and Amateur Sports Protection Act (“PASPA”). With the exception of Nevada, Oregon, Delaware, and Montana, states the PASPA “grandfathered in” because they operated legal sports betting systems prior to the enactment of the law, no state was allowed to legalize sports gambling. The goal of the PASPA was “(1) to restrict any further growth of state-sponsored sports betting; (2) to maintain the integrity of sports; and (3) to protect the youth of America from the dangers of gambling and vice.” However, several states were unhappy with this prohibition on sports betting as states realized the revenues they could create from taxing legal gambling. Most notably, New Jersey sought on several occasions to legalize sports betting in its state, and it succeeded in 2018 in Murphy v. National Collegiate Athletic Association. In Murphy, the Supreme Court found that the PASPA was unconstitutional because it violated the anticommandeering doctrine by generally prohibiting any state from legalizing gambling.
Recent History: Colorado’s legalization of Sports Betting
By invalidating PASPA, the Supreme Court kicked the issue of online sports gambling back to State governments and opened the floodgates for legalized gambling for the first time in decades. Since then, sports betting has been legalized in twenty-three states, and many more have legislation under way.
University of Colorado’s New Deal
The status of CU’s deal with PointsBet as the first agreement of its kind with a gambling company outside of Nevada is made more exciting by the revenue it will generate. The deal is set to provide CU with $1.625 million dollars in exchange for posting PointsBet advertisements at the school’s sporting events, in addition to a $25,000 “hospitality bank” per year from which PointsBet can redeem tickets for sporting events and VIP experiences and a collaboration on recruiting opportunities that includes “$75,000 per year to go ‘directly to supporting the development of student athletes and PointsBet recruitment.’” The deal is also structured so that CU is exempt from taxes on the sponsorships, because PointsBet’s advertisements are limited to “neutral statements about the product.”
Will schools across the United States follow suit?
PointsBet’s deal with the University of Colorado is similar to the deals sports betting sites have struck with professional sports leagues, as well as with schools in Nevada, where betting has always been legal. However, since it is the first Division I deal of its nature, the recent news begs the question of whether other NCAA programs will roll the dice as well. The expansion of legal sports betting is fundamental to the ability of teams to do so because it is addressed on a state-by-state basis. That said, the number of states legalizing sports betting is growing, meaning these deals could crop up more frequently. The revenues coming in from the deal are certainly attractive enough to create interest among other schools, especially given low-revenue seasons as a result of the coronavirus. However, there are also elements of fairness across divisions when some teams can collect additional revenue from sports betting deals and others remain unable to do so based on their state’s laws.
Ultimately, advertisement deals with online gambling companies is not in itself prohibited under NCAA guidelines. However, the NCAA opposes gambling on any NCAA league games and events, on the grounds that it “undermines the integrity of sports contests… [and] demeans the competition and competitors alike. . . .” The prohibition on gambling without also prohibiting the advertisements of gambling companies has put the NCAA in a difficult position in light of CU’s new deal. In fact, in response to the PASPA’s invalidation, the NCAA began lobbying Congress to establish a baseline for state sports betting markets in an effort to limit student athlete exposure to betting and to maintain standards of information sharing, but the bill they were pushing for stalled due to partisan negotiations.
Importantly, the bill the NCAA was advocating for was aimed at providing federal regulation to the sports betting market, not one opposing sports betting for collegiate programs altogether. This, along with increased efforts to educate student-athletes and athletic staff regarding sensitivity of information sharing and the addictiveness of sports betting, along with the massive market and potential billions of dollars in revenue streams the sports gambling industry can offer, indicates the NCAA’s possible begrudging acceptance of sports betting as a permanent fixture in the world of college sports .
Potential future issues
Even without a legal battle from the NCAA, the participation of collegiate athletic programs in sports betting raises unique concerns. A big conflict between the NCAA and players is revenue from use of player’s name, image, and likeness (NIL) which have been used historically by the NCAA and could cause further tension between the NCAA and its players in deals such as this one. The use of players’ NIL is also likely to cause a debate around data, as will team’s logos and names, because with the resurfacing of NIL issues in relation to displays on sportsbooks’ websites, players will claim a proprietary interest in the data.
Another potential issue is the information-sharing associated with college betting, because information and statistics are reported differently at the NCAA level than in professional leagues. This gives rise to the potential for not only the traditional risks associated with sports betting of point-shaving or fixing games, but also leaking inside information.  All of these issues are tangential to the more immediate question of what the NCAA’s formal next steps will be and how many other universities will follow CU’s lead in forming a deal with a similar gambling company in their own states as sports betting becomes legal across the country. It appears that college sports could very quickly establish a new form of revenue and open wider opportunities for sports betting to fans.
*Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2022, Villanova University Charles Widger School of Law.
 See Sam McQuillan, Colorado Athletic Department Nets $1.6 Million from Sportsbook, Bloomberg L. (Oct. 2, 2020), https://www.bloomberglaw.com/product/blaw/document/X82UNQFG000000?criteria_id=47a415fcb809b043bb7a57e50fb95cad&searchGuid=19ee2797-dbcd-4af4-bff3-497679e9e1f4&search32=0nRa0aQNMT9CUqn--sVxoA%3D%3Dx8zX81wnb1x71fWy5EUEV_GDS2pho25dD46QKLFSEl2qOc8qEDzANfIgEblLtk6DOAiNWIKLIWNly-kkC2qYP_39PFMZwQjbYVVC4dXabQGAkBKZ_BTt7T7qAor60h1NmSLoLn6mzXb9B7vaWTA8QA%3D%3D (announcing deal as “first financial disclosure of partnership between a University and PointsBet”, and “the first college sports deal with a gambling company outside of Nevada”). PointsBet’s US headquarters recently opened in Denver, Colorado. See id. (noting PointsBet’s global headquarters are in Australia).
 See Ross Dellenger, Inside Colorado’s Unprecedented $1.625M+ Deal with Gambling Outlet, Sports Illustrated (Oct. 3, 2020), https://www.si.com/college/2020/10/03/inside-colorado-pointsbet-deal#:~:text=Sports%20gambling%20company%20PointsBet%20is,customer%20it%20sends%20to%20PointsBet (noting legal contrast between Coloradan’s decision to legalize sports betting in November of 2019 and NCAA’s policy against wagering).
 See Nick Bromberg, Colorado Becomes First School to Sign Partnership with Sports Betting Company, Yahoo! Sports (Sept. 8, 2020), https://sports.yahoo.com/colorado-becomes-first-school-to-sign-ad-deal-with-gambling-company-201902657.html (reporting CU’s statement that it was first Division I program to sign such a deal); see also Ross Dellenger, supra note 2 (referring to CU’s deal with PointsBet as first “high-profile sports gambling deal in major college athletics”).
 NCAA, 2020-2021 NCAA Division I Manual 44 (NCAA 2020) (“The following individuals shall not knowingly participate in sports wagering activities or provide information to individuals involved in or associated with any type of sports wagering activities concerning intercollegiate, amateur or professional athletics competition: (a) Staff members of an institution's athletics department; (b) Nonathletics department staff members who have responsibilities within or over the athletics …; (c) Staff members of a conference office; and (d) Student-athletes.”); see also McQuillan, supra note 1 (reporting NCAA’s approval of CU’s deal).
 For a discussion of other states that have legalized sports betting since Murphy was invalidated, see infra note 14 and accompanying text.
 See Brett Smiley, Recruiting Season: Just How Big A Deal is the University of Colorado-PointsBet Spoortsbook Pact?, SportsHAndle (Sept. 9, 2020), https://sportshandle.com/pointsbet-colorado-ncaa-sports-betting/ (noting while NCAA has yet to release any statement regarding CU’s deal with PointsBet, NCAA’s historically anti-wagering stance is in conflict with potential revenue from advertising for sportsbooks, because of amount of money for schools to “turn their noses up at”).
 28 U.S.C.A. §3701 (West 2018), invalidated by Murphy v. National Collegiate Athletic Association, 138 S. Ct. 1461 (2018) (“It shall be unlawful for (1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or (2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity, a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.”).
 See Kaitlyn Kallert, Comment: High Stakes: Throwing a Hail Mary to Congress for a Federal Ban on Sports Betting In College Athletics, 28 J. L. & Pol’y 276, 284-5 (2019) (providing historical overview of sports gambling in United States); see also Eric Meer, The Professional and Amateur Sports Protection Act (APSA): A Bad Bet for the States, 2 U. Nev. Las Vegas Gaming L. J. 281, 288 (2011) (noting PASPA only partially exempted Oregon, Delaware, and Montana).
 Kallert, supra note 8 (reviewing goals of PASPA before assessing dangers of sports betting and recommending expansion of PASPA to all gambling on amateur sports).
 See Hunter Haines, Passing the Ball: The United States Supreme Court Strikes Down PASPA and Throws Sports Gambling Back to State Legislatures, 78 Md. L. Rev. 604, 626 (2019) (analyzing whether revenue generated from sports gambling outweighs potential integrity risks of allowing gambling).
 138 S. Ct. 1461 (2018).
 Id. at 1470 (“[T]here is simply no way to understand the provision prohibiting state authorization as anything other than a direct command to the States. And that is exactly what the anticommandeering rule does not allow.”). The anticommandeering doctrine prohibits Congress from regulating state governments, and functions to protect state governments from interference by Congress. See Kasia Parecki, Murphy v. NCAA: Anticommandeering Doctrine – A Win for State Autonomy and Federalism, 97 Denver L. Rev. F. 61, 64 (2019) (assessing anticommandeering doctrine’s protections afforded to state governments).
 See Murphy, 138 S. Ct. at 1484-5 (“Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”).
 See Ryan Rodenberg, United States of Sports Betting: An Updated Map of Where Every State Stands, ESPN (June 9, 2020), https://www.espn.com/chalk/story/_/id/19740480/the-united-states-sports-betting-where-all-50-states-stand-legalization (listing states that have legalized sports betting, broken down by states where sports betting is legal and active and states where sports betting is legal but has not launched yet); see also Pete Blackburn & Shanna McCarriston, Wanna Bet? Here’s Where All 50 States Stand on the Legalization of Sports Gambling, CBS Sports (Aug. 18, 2020), https://www.cbssports.com/general/news/wanna-bet-heres-where-all-50-states-stand-on-the-legalization-of-sports-gambling/ (surveying each state’s current or prospective legislation to legalize sports betting since Supreme Court’s ruling in Murphy).
 See McQuillan, supra note 1 (comparing CU’s deal to smaller deal made by University of Nevada with London-based bookmaker, William Hill in 2017).
 Dellenger, supra note 2 (reporting on CU’s contractobtained through public records request).
 Sam McQuillan, Universities Begin to Tap Into Lucrative Sports Betting Craze, Bloomberg Law (Oct. 6, 2020), https://www.bloomberglaw.com/product/blaw/document/X111P96K000000?criteria_id=47a415fcb809b043bb7a57e50fb95cad&searchGuid=19ee2797-dbcd-4af4-bff3-497679e9e1f4&search32=0nRa0aQNMT9CUqn--sVxoA%3D%3Dx8zX81wnb1x71fWy5EUEV_GDS2pho25dD46QKLFSEl2qOc8qEDzANfIgEblLtk6DOAiNWIKLIWNly-kkC2qYP_39PFMZwQjbYVVC4dXabQGAkBKZ_BTt7T7qAor60h1NmSLoLn6mzXb9B7vaWTA8QA%3D%3D (explaining while universities must pay taxes on “regularly carried on business unrelated to their core mission,” CU’s deal with PointsBet is likely qualified sponsorship agreement which is tax-exempt).
 See, e.g., Reuters, Major League Baseball and Fanduel Strike Sports Betting Deal, CNBC Sports (Aug. 15, 2019), https://www.cnbc.com/2019/08/15/major-league-baseball-and-fanduel-strike-sports-betting-deal.html (noting professional sports leagues have begun partnering with sportsbook operators since states began legalizing sports betting). Fanduel has similar deals with the National Basketball Association (NBA) and the National Hockey League (NHL), as well as with individual teams within professional leagues. Id. (Fanduel has partnered with Brooklyn Nets in NBA and with New Jersey Devils in NHL). For a discussion of Nevada schools with a similar deal to CU’s prior to PASPA’s invalidation, see supra note 15 and accompanying text.
 See Brett Schrotenboer, Colorado Buffaloes Agree to Sponsorship Deal with Sports Gambling Company, USA Today (Sept. 8, 2020), https://www.usatoday.com/story/sports/college/2020/09/08/colorado-buffaloes-make-deal-sports-gambling-company-pointsbet/5752388002/ (assessing boundaries between gambling and college sports have been blurred by athletic programs’ need for more revenue).
 See supra note 13 and accompanying text.
 See Blackburn & McCarriston, supra note 14 (tracking either legalization or proposed legislation to legalize in forty-five of fifty states).
 See McQuillan, supra note 17 (explaining CU gets revenue for every new PointsBet customers linked to one of CU’s displays provides revenue beyond initial $1.625 million deal). McQuillan also notes the timeliness of the deal in light of the “financial bleeding” CU athletics are experiencing due to the coronavirus pandemic. See id. College football, for example, could lose $4 billion dollars in 2020 alone if the 2020 football season is cancelled. See March Schlabach & Paula Lavigne, Financial Toll of Coronavirus Could Cost College Football at Least $4 Billion, ESPN (May 21 , 2020), https://www.espn.com/college-sports/story/_/id/29198526/college-football-return-key-athletic-departments-deal-financial-wreckage-due-coronavirus-pandemic (explaining revenue from athletic programs, particularly football, is in some cases enough to make universities self-sustaining, but that system relies on each season of football in order for revenues to cover expenses).
 See Schotenboer, supra note 19 (recognizing other schools are hurting equally as much as CU due to lost revenue from coronavirus pandemic).
 See Dellenger, supra note 2 (“There is no prohibition on universities entering gambling agreements.”).
 Sports Wagering, NCAA, http://www.ncaa.org/enforcement/sports-wagering (last visited Oct. 15, 2020) (warning of impacts of sports betting on well-being and discouraging participation in sports betting).
 See Dellenger, supra note 2 (noting NCAA has ability to prohibit athletes form endorsing advertisements “that conflict with NCAA legislation”).
 See Brian Burnsed, Doubling Down, NCAA Champion Magazine (2019), http://www.ncaa.org/static/champion/doubling-down/ (discussing NCAA’s lobbied-for legislation as one of many reactive actions in efforts to stay on top of rapidly growing sports betting industry). Other actions the NCAA took to respond to the legalization of sports betting include establishment of an ad-hoc sports wagering committee and efforts to educate students, coaches, and athletic staff on sensitivity of information in sports gambling. See id. (explaining ad hoc committee’s role to “evaluat[e] whether relevant NCAA rules need to change, how best to educate athletics departments and student-athletes about compliance and problem gambling, and how to ensure integrity of competitions as the market expands.”).
 See David Purdum, NCAA Pushing For Federal Sport Betting Legislation, ESPN (Sept. 10, 2019), https://www.espn.com/chalk/story/_/id/27586235/ncaa-pushing-federal-sport-betting-legislation (“We are absolutely supportive of federal regulation,’ NCAA vice president of hearing operations Naima Stevensen Starks, a point person on sports betting, told ESPN. ‘It’s fairly daunting to think that every state would have a different set of regulations. Having some minimum standards, we are very supportive of and have been an active proponent of.”); see also Dustin Gouker, NCAA Head: Sports Betting is ‘Going to Threaten the Integrity of College Sports in Many Ways’, Legal Sports Rep. (Jan. 25, 2019), https://www.legalsportsreport.com/28038/ncaa-says-sports-betting-will-threaten-integrity/ (highlighting NCAA proposed legislation is focused on federal regulation of sports betting, rather than outright ban on sports gambling).
 For further discussion of NCAA actions to prepare for sports betting in college sports settings, see supra note 27 and accompanying text.
 See McQuillan, supra note 1 (“College sports’ first major foray into the sports betting world could lead to far-reaching tax and intellectual property concerns.”).
 See Dellenger, supra note 2 (recognizing NCAA could prohibit athletes from endorsing gambling companies because NCAA currently controls any use of player’s name, image or likeness).
 See McQuillan, supra note 17 (noting players have already sued NCAA for its monopoly of player image and likeness, and likely to spill over into any gains universities and NCAA would earn from sharing that data with sportsmakers).
 See Dennis Dodd, Standardized Injury Reports Face Hurdles as College Football Adapts to New Sports Gambling Laws, CBS Sports (Feb. 22, 2019), https://www.cbssports.com/college-football/news/standardized-injury-reports-face-hurdles-as-college-football-adapts-to-new-sports-gambling-laws/ (discussing need for reporting similar to that in professional leagues, such as injury reports, to prevent bribes for information sharing). The idea of sharing information such as injury reports comes with additional obstacles at the collegiate level, because of HIPPA privacy requirements – an obstacle which must be solved somehow in order to prevent susceptibility to bribery. See id. (“Ole Miss AD Ross Bjork said his coach, Matt Luke, mad it a habit from the beginning of his tenure to give a Monday injury update. ‘When the gaming piece came into play, we said ‘Hey, let’s keep that going,’ Bjork said. ‘You eliminate people going behind the scenes to get info. Be transparent about it….”).
 See Stephenie Wingyuen Yeung, Universities and Sports Betting: Privacy, Data, and Integrity Issues Involving Student Athletes, JD Supra (May 30, 2019), https://www.jdsupra.com/legalnews/universities-and-sports-betting-privacy-41294/ (recognizing “[a] side effect of legal sports betting is that bettors will look for ways to gain an advantage in their wagers[, w]hether it is outright coordinated game fixing or inadvertent sharing of inside information….”).
 See Dellenger, supra note 2 (highlighting conflict that still exists between legalized sports betting at individual state levels and NCAA’s stance against sports betting generally, despite NCAA’s approval of CU’s deal).
 See Bromberg, supra note 3 (recognizing “college athletic administrators may not be as united against the idea of sports betting and sports betting promotion as.. it seem[ed]” in light of CU’s revenue increase as direct result of its deal with PointsBet).