'Free' Advertising in the USA

21 April 2005

Online gambling operators seem to have two choices when deciding how to advertise their sites in the United States: They can either go about promoting their business with blatant disregard for the Department of Justice or they can pitch free-play sites.

"This is a viable way to create awareness. It gives the operators an entry way into the American market, and for a lot of operators that market is the key to their survival and is the market that is driving online poker right now."
- Lawrence Walters
Weston, Garrou & DeWitt

Some operators have continued to advertise their real-money sites via the few media outlets willing to run the ads in the face of DOJ pressure, while others are developing free-play promotional strategies. The latter approach at the moment seems to present more opportunities.

The ongoing grand jury investigation into the advertising practices of the industry has forced operators to adapt, and the operators have responded by promoting the likes of PokerStars.net, PartyPoker.net, 888.info, and GoldenPalce.net on major TV networks like NBC and ABC as well as on numerous cable channels. One particularly popular approach of late is the "poker school" site, which offers tips for winning and a venue for playing without risking any money.

Often a means of enabling players to get comfortable with a service without risking money, free-play sites are nothing new to the industry. Their significance as a vital promotional tool, however, is.

Perhaps most important is that media outlets are much more inclined amid the DOJ's crackdown to accept ads for free-play sites than for their real-money companion sites.

Lawrence Walters, a lawyer with the firm Weston, Garrou & DeWitt, says pitching the free-play sites is an ideal way to build brand strength without violating any laws.

"This is a viable way to create awareness," Walters said. "It gives the operators an entry way into the American market, and for a lot of operators that market is the key to their survival and is the market that is driving online poker right now."

Walters, who has helped I-gaming clients conceptualize free-play campaigns, said the free-play ads are protected under First Amendment speech.

"There has to be a clear division on the free-play site from the real-money site," he said. "There can be no banners or links to the pay site. But if those restrictions are met, then it has a level of protection that doesn't exist for the real-money site. It is almost like a public service they are providing with the site, teaching people how to play the game for free."

Attorney Martin Owens with the Law Offices of Martin Owens in California recalls that when Nevada first started licensing casinos, there was a great deal of advertising restrictions put on them in neighboring states.

"The ads wouldn't be about the casino, but it would be about the entertainment they offered, the great views and the restaurants and shops," Owens explained. "You had to be pretty far gone not to figure out that the place also offered casino gaming."

The same connection, he said, can be made with the online poker ads. A consumer who remembers PokerStars.net, for example, will probably be able to find his way to the PokerStars.com, where he can play for real money.

One thing that remains constant, regardless of whether the sites are promoting real-money or free-play games, is that few operators are interested in discussing their U.S. advertising strategies in a public forum. None of the real-money advertisers contacted by IGN for this article wished to comment. Neither did operators pitching free-play games and the media outlets who carry the ads.

It's difficult to quantify the effectiveness of the ads without their input, but Walters guesses the advertisers are seeing positive results.

"They continue to do them, and some have increased their spending for marketing the free-play sites," Walters said. "It really comes down to building that brand awareness and trying to create some loyalty right from the start with their user base."

Nobody knows where Kevin Smith came from. He simply showed up one day and started writing articles for IGN. We liked him, so we decided to keep him. We think you'll like him too. Kevin can be reached at kevin@igamingnews.com.