“At Caesars sportsbook, we take responsible gaming and our editorial clients’ functions incredibly seriously,” said Jeffery Hendricks, Caesars Entertainment SVP of Regulatory and Compliance, in an address to Ohio regulators.” That’s not just the responsibility of our legal and regulatory team, but all of our team members and all of our licensees, and accordingly, we’re sorry for the issue that was identified here.”
Continued crackdown
Caesars’ Ohio fine comes as states are increasingly cracking down on the use of marketing terms that imply bets have no “risk.”
“Free” bet or “risk-free” bet have been common marketing terms for sportsbooks since the Supreme Court struck down the federal wagering ban in May 2018. Nearly all sportsbooks offer these bets for new customers, which give bettors funds back if their initial wager doesn’t win.
DraftKings, FanDuel and BetMGM, the US market share leaders, have all offered $1,000 (or more) in such offers to new bettors. Caesars continues offering $1,250 in such bets in certain states and offered as much as $3,000 in New York shortly after mobile sports betting began there last January.
These bets, regulators say, are not “free.” A losing bet is almost always refunded in sportsbook credit, not cash. Should a bettor lose those funds, they will not have a chance to recoup their initial deposit without having to deposit more money into the sportsbook.
Though less common in regulated US sportsbooks, many offshore books that offer “risk-free bets” for new players also have “rollover” requirements that mandate bettors wager many times their initial deposit before they have a chance to withdraw their funds.Regulators in the latest wave of states to go live with mobile sports betting, including Maryland (November 2022 launch) and Ohio (January 2023) are explicitly prohibiting terms that imply no risk for bets. Massachusetts, which in March is poised to be the next state with legal mobile sports betting, has also banned such terms in marketing. Regulators there have grilled sportsbook applicants about their marking practices in other states.
This has led many sportsbooks to pivot away from the terminology that seemed ubiquitous in the first few years of legal sports betting outside Nevada. New player promotions in the more than 20 states with regulated mobile sports betting are now increasingly marketed as “second-chance” bets or other terms that don’t imply they are without “risk.”
Other books facing fines
BetMGM and DraftKings are facing $150,000 fines as well for their marketing practice in Ohio after regulators said the operators (or their affiliate marketing partners) also failed to properly present problem gambling resources in their ads.Before Ohio’s sports betting launch, Penn Entertainment’s Barstool Sportsbook drew regulators’ ire for an event at the University of Toledo that permitted attendees under 21 years old, the legal sports betting age in Ohio. Massachusetts regulators also criticized allowing underage patrons at an event that promoted a sportsbook during Barstool’s licensing hearing in the state, leading Penn officials to promise they would ID all attendees at any future such events.
Overall, the OCCC is pursuing more than $1m in fines against Ohio sportsbooks, according to the Colombus ABC affiliate. The commission was “deeply disappointed” with these compliance issues that have occurred less than three weeks since sports betting began, the station reported.
Sixteen mobile sportsbooks are now live in Ohio and more than 700 sports betting kiosks have opened across the state, OCCC Executive Director Matthew Schuler said during Wednesday’s meeting. Despite the compliance concerns, Schuler told commissioners that Ohio sports betting overall is off to a “smooth launch.”