Sports betting companies face penalties for breaking Ohio law in ads
Some companies that started offering legal sports betting at the stroke of midnight on New Year’s Day are already getting off to a rough start, and could be on the hook for hundreds of thousands of dollars in fines.
The Ohio Casino Control Commission said the parent companies for Caesars, DraftKings and Bet MGM will receive notifications that they broke Ohio law in their ads and promotions in a couple of ways. The state agency said all three of those operators advertised “free” or “risk-free” promotions or bonuses, but said gamblers were required to incur a loss or risk their own money to get those. And the commission also said the three companies failed to conspicuously show messages preventing or managing problem gambling, something that is required in advertising.
The commission said it will be seeking a $150,000 fine from each company, as well as other action to make sure their staffs are trained in all state laws regarding sports gaming advertising and promotions in the future.
This isn't the first time a sports betting company has been accused of violating Ohio law in terms of their operations. Even before sports betting was allowed to operate in Ohio, the state had already taken action against Penn Sports Interactive and DraftKings for violations.
In December, the commission told Penn Sports Interactive it could face a $250,000 fine plus other sanctions because its Barstool Sports held a November event on or near the University of Toledo campus. Targeting advertising to a college campus is generally not allowed under Ohio's sports betting law. And just last week, notice went to Draft Kings that they could face a possible $350,000 fine for mailing more than 2,500 direct mail advertisements to Ohioans under 21 -- the age at which gambling becomes legal in the state.
The commission's Jessica Franks said the sports betting companies in Ohio should know the rules for operation in Ohio by now.
"Our rules and standards for advertising have been in place for months and the industry has been reminded numerous times about the need for them to follow our rules. The fact that we needed to issue explicit guidance to them twice in the week before the launch of sports gaming in Ohio is really disappointing," Franks said.
As sports betting in Ohio takes off, companies offering the service want to create a loyal customer base. Franks said in states that allow sports gambling, there is usually a rush by companies to create market share.
"But that doesn't excuse violations we are seeing where you know ads that we are seeing don't contain the appropriate responsible gaming messages. We take responsible gaming very seriously here and we expect the industry to do the same," Franks said.
All of the companies that receive notice of violation from the commission will have the right to an administrative hearing and decisions will be made at a public meeting in the future.
But state leaders are watching the actions these companies are taking. In recent days, Gov. Mike DeWine has put the companies offering sports gambling in Ohio on notice.
"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," DeWine said.
DeWine said he was also concerned about operators targeting Ohioans under 21, who can’t legally gamble.
The Casino Control Commission notified DraftKings that the 2500 ads it sent to people under 21 in November could result in a $350,000 fine. DraftKings is entitled to a hearing on the allegations.