Ohio regulators intend to fine major US sportsbooks for promotions violations
Several leading US sportsbooks could be fined more than six figures each as Ohio regulators look to crack down on unapproved marketing practices.
BetMGM, Caesars and DraftKings, or their affiliate marketers, ran sports betting ads that violated Ohio law and regulations by not having a problem gambling message, according to a statement from the Ohio Casino Control Commission. Ohio law requires all sportsbooks to “clearly and conspicuously contain a message designed to prevent problem gambling” as well as an accompanying helpline number.
These actions could lead to a $150,000 fine for each operator.
“The sports gaming industry has received multiple reminders of the rules and standards for advertising and promotions, yet continues to disregard Ohio law. These repeated violations leave the Commission no choice but to pursue administrative action to bring operators into compliance,” said OCCC Executive Director Matthew Schuler in a statement. “The Commission takes responsible gambling seriously – and expects the industry to value the same.”
Ohio continues nationwide crackdown
Ohio’s push to regulate sports betting promotional material continues a growing trend among new sports betting markets.
State regulators are more closely monitoring not just marketing requirements, such as including problem gambling hotlines, but the language used. The OCCC specifically called out the aforementioned operators for using the term “free bets” in their promotions.
Most major sportsbooks have used terms like “free bet” or “risk-free bet” in the first wave of states with legal sports betting, but this practice seems increasingly less likely to continue. The most recent states with legal sports betting – Maryland (which went live late last year), Ohio and Massachusetts (set to launch mobile wagering in March) – have all restricted these messages.
“Risk free” bets are typically options for first-time customers that allow them to receive the same amount of funds back if their bet losses. For example, if a bettor wagers $100 on a losing wager, they’ll receive $100 back in credit with that sportsbook.
OCCC Executive Director Matthew Schuler: “The Commission takes responsible gambling seriously – and expects the industry to value the same.”
Many larger operators will allow up to $1,000 in these bet types. Caesars offered up to $3,000 in New York during its first few weeks of legal sports betting in January 2022.
Regulators in multiple states have said these bets are not “risk free,” as bettors don’t receive their money back in cash, but instead have to wager that money again with the sportsbook. Should a bettor lose their initial “free” bet and then subsequent wagers with the resulting sportsbook funds, they will not receive any further compensation.
In recent regulatory hearings, Massachusetts gaming officials have directly told sportsbooks they cannot use terms like “risk free” in their promotional materials. At least a half-dozen states are set to consider sports betting legalization bills in 2023, and regulatory moves like these in other states could influence regulators there when or if wagering is legalized.
Though regulations vary by state, sportsbooks tend not to violate requirements in any of their live markets even if it’s permitted in another. Going forward, this could mean further limiting the use of “free” or “risk free” in marketing materials in any legal betting market, even though that practice had been widespread in the first few years with legal sports betting outside Nevada.
Ohio off to quick start
The regulatory crackdowns come as Ohio’s legal sports betting market is off to a record-setting start.
Geolocation tracking firm GeoComply reported more than 11m transactions among legal Ohio sportsbooks in the state’s first 48 hours with legal sports betting. This was more transactions during that period than in New York, the nation’s largest sports betting market by handle, which has nearly double Ohio’s population.
The state’s first monthly sports betting financial report, which would give a clearer picture of the size of the market as well as operator market share, could be published as early as February.
Ohio now has 16 live mobile sportsbooks, tied with Iowa for the third-most in the country, trailing only Colorado and New Jersey. The 16 legal betting options are the most of any of the more than 20 states with legal sports betting have had in their first month with regulated wagering.
Along with DraftKings, BetMGM and Caesars, Ohio bettors also can wager with FanDuel, the US leader by gross gaming revenue market share. This quartet has more than 80% of the US market share by handle, a figure they may rival again in Ohio despite the proliferation of betting options.