Ohio Plans to Fine BetMGM, Caesars and DraftKings Over Advertising Violations
The Ohio Casino Control Commission has announced plans to fine BetMGM, Caesars Sportsbook and DraftKings for breaching the state’s advertising rules. State law requires all sports betting operators to include a message about responsible gambling and details of a helpline in all marketing. They must also avoid referring to “free bets” or “risk-free” bets, which must be called “bonus bets” or “second chance bets” instead. The commission accused all three operators or their affiliate marketers of violating those rules.
“The sports gaming industry has received multiple reminders of the rules and standards for advertising and promotions, yet continues to disregard Ohio law,” said Matthew Schuler, the commission’s executive director. “These repeated violations leave the Commission no choice but to pursue administrative action to bring operators into compliance. The commission takes responsible gambling seriously – and expects the industry to value the same.”
The three operators – BetMGM, American Wagering Inc. (Caesars) and Crown Ohio (DraftKings) – are all facing $150,000 fines. They all have the right to a hearing and due process, while the six-man commission will need to vote on administrative action. Yet it shows that Ohio regulators are determined to take a hard line on any operators that fall short of the strict advertising standards they have set.
Operators Struggle to Adjust Marketing Materials
The Buckeye State’s legal sports wagering industry only began on New Year’s Day, but the commission has already issued several notices of violation. It has already two penalties against DraftKings, which also faces a $350,000 fine for sending ads to Ohioans under the age of 21 back in November, when it was promoting its pre-registration bonus. Penn Entertainment, the operator of Barstool Sportsbook, will also receive a $250,000 fine for promoting a pre-registration bonus code during a live broadcast of the Barstool Sports college football show on the University of Toledo’s campus.
Ohio has significantly stricter regulations than other states, and operators appear to be struggling to adjust their nationwide marketing materials to reflect those rules. One key demand is the need to “clearly and conspicuously contain a message designed to prevent problem gambling as well as a helpline number to help access resources.” That is unnecessary in other states.
Sportsbooks in Ohio also cannot mention the term “free bets,” which is commonly used in other states. For example, DraftKings has often provided new customers with a “Bet $5, Get $200” welcome bonus, whereby they get $200 in free bets for placing a $5 qualifying wager. In Ohio, that must be referred to as $200 in bonus bets or bonus credits.
The term “risk-free bets” also cannot be used in Ohio. It is now rarely seen on a nationwide basis, as these bets are not technically risk-free. If you lose, you get the money back in site credit, and you need to satisfy a 1x playthrough requirement before withdrawing. Operators now refer to them as no sweat first bets, second chance bets or first bet insurance deals. However, some sportsbooks – or their affiliates – appear to have used the term “risk-free” in the early stages of Ohio’s legal sports betting industry, incurring the commission’s wrath.
Ohio Governor Says Sportsbooks Have “Crossed the Line”
Ohio Governor Mike DeWine, who signed the state’s legal sports betting bill a year ago, has also lashed out at the sportsbooks. “The companies that are doing the massive advertising need to be aware that they are being looked at very closely by the governor and the Casino Control Commission in regard to statements that they are making,” he said. “We believe that, on at least several occasions, they have already crossed the line. My message to them is this will not be tolerated in the state of Ohio.
“One company directly was targeting a large number of young people. That’s a line. That’s a pretty clear line that they cannot cross. I think they also need to be very careful, candidly, in regard to the claim of free money and free gaming. I think when you look at the fine print, you try to figure out what it really means, it doesn’t mean certainly what is implied by the TV advertising.”
The commission laid out its regulations on acceptable promotions and advertising back in June 2022, giving the industry six months to prepare. Schuler told Columbus-based TV station WSYX that he is disappointed by the teething problems. “The commission shares the governor’s concerns regarding the conduct of sports gaming operators when it comes to advertising and promotions,” he said. “The industry has been aware of the commission’s rules and state law in these areas for months, and has already taken action against Penn Sports Interactive and DraftKings for violations of these provisions ahead of the launch of sports gaming.
“The fact the commission needed to issue explicit guidance on advertising to operators twice in the week prior to launch [on Dec. 23 and Dec. 29] is disappointing. While our goal is compliance, the commission remains vigilant in monitoring sports gaming ads and promotions and will not hesitate to take administrative action for repeated violations.”
Legal Sports Betting Proves Popular in Ohio
Despite the fines, operators are off to a strong start in Ohio – the seventh largest state in the country. Sixteen online sportsbooks went live on Jan. 1, and GeoComply – the industry’s geolocation services provider – revealed that there were 11.3 million transactions in the state on the first two days of trading. It made Ohio the busiest state in the country, ahead of New York and Pennsylvania.
The most geolocation transactions initially occurred in the Cincinnati area, with Bengals fans driving the early traffic. “We are thrilled to welcome another state into the regulated online sports betting sector,” said Lindsay Slader, GeoComply’s senior vice president of Compliance. “As expected, residents of the Buckeye State enthusiastically greeted the market at the moment the calendar changed over to 2023. Today, about 44% of the American population can bet online with legal and responsible operators. The launch of regulated online sports betting in Ohio will better protect its citizens, with an increased commitment to responsible gambling and new funding for critical state programs.”